Site Opens Market To Small Investors

Small investors who are just getting started are often advised to put away a small amount of money from each paycheck. The two main ways to invest at that level -- short of saving cash until there's enough for a significant stock purchase -- are mutual funds and the direct investment programs that some publicly traded companies offer.
Unfortunately, many of the most popular technology companies don't offer such programs, or they require the investor to do a good bit of paperwork.
Now the Internet has made it possible for a third party -- Bellevue, Wash.-based Netstock Direct Corp. -- to offer direct investment plans in more than 2,000 companies through its ShareBuilder.com site.
This service, which is being marketed directly to consumers as well as to other online brokers, requires no minimum investment and costs only $2 per transaction.
According to Netstock CEO Jeff Seely, the company is able to keep prices low by bundling transactions together and processing them just once a week, while other online brokers race to get their transactions through as quickly as possible.
For example, Seely said customers who sign up to buy $200 worth of Microsoft Corp. (Nasdaq:MSFT) stock once per month aren't concerned about exactly what time of day -- or what day of the week -- the shares are purchased.
And if $200 doesn't buy an even number of shares, Netstock will buy and hold the remaining fraction of a share.
Customers can sign up online and arrange for automatic transfers from paychecks or bank accounts. ShareBuilder.com handles all paperwork and keeps track of the information necessary for tax purposes.
Although ShareBuilder.com is a new service -- the Web site debuted in December -- a number of other companies are already offering it through their sites.
"ShareBuilder.com enables our users to act on the information they get on our Web site," said Sara Gilbertson, senior vice president of marketing at McLean, Va.-based Womenconnect.com Corp., a business site that targets professional women and women business owners.
Other sites that offer links to ShareBuilder.com include Seattle-based Go2Net Inc.'s (Nasdaq:GNET) Silicon Investor and New York-based TheStreet.com Inc. (Nasdaq:TSCM).