Everything You Need To Know
, parent of the ESPN Network, plays to those passions.
Anyone who had received shares of those stocks five years ago has more than tripled her money, making stocks one Christmas or Chanukah gift that can keep giving well after the holiday season is past.
It true that giving shares of a single stock violates all principles of diversification. But c it a heck of a lot more engaging for a child or young adult than some shares of, say, the Vanguard Target Retirement 2060 mutual fund VANGUARD TARGET RETIREMT 2060 FD
And maybe, just maybe, introducing a youngster or young millennial to the world of investing via some shares in a company they know like the scale toward stocks when they eventually start investing in a 401(k) or Roth IRA. Millennials have been slow to embrace stocks. That understand given the fact they and their portfolios had to live through the financial crisis. But it also will make it harder for them to reach their long term savings goals.
Your first gift giving task is to choose one of these three ways to gift the stock:
1) Make A One Time Gift, Stock Certificate Included. The certificate may be a real deal stock certificate or a replica. For example, in 2013 Disney, with its fab animated stock certificate featuring Walt, Mickey Mouse, and Donald, stopped issuing the real deal, choosing instead to register owners only electronically. But you can still get a collectible version of the stock certificate:
There a steep price to pay for being able to hand over a physical gift. On top of the share price, you will pay a $69 transfer fee, and anywhere from $2.95 to $48.95 for a frame. A customized engraved plaque will run another $6.
2) Transfer Stock You Own. You can have stock you own transferred to another account. Contact your brokerage and ask for a stock transfer form. For recipients under the age of 18 the transfer must be made into a custodial account with an adult (usually a parent) listed as the custodian.
3) Deal Directly with the Company Whose Stock You Want to Gift. Some companies, including Harley Davidson,
Mattel, and Nike, offer direct stock purchase plans, and you can have dividends automatically reinvested in more shares. FirstShare, an online site that offers dividend reinvestment programs (DRIPs) has a list of companies offering direct investment. Fees vary at each company. For example, Harley Davidson HARLEY DAVIDSON
will let you get started with just a one share purchase. In addition to the share price itself, there a $5 purchase fee plus another 10 cents for each share.
Once you decided how to give the shares, you want to pick a company that both taps into the recipient interests and has at least some potential to grow over time. Because the major indexes are at or near all time highs right now, screaming deep discount values are hard to come by these days. But the following gift friendly stocks all offer value compared to the 1,500 stocks that Morningstar closely analyzes, which on average currently sell for 4% more than the estimated value.
recently traded around $150 a share, a slight discount to Morningstar $157 fair value estimate. (And if your gift goes to someone with a car, Berkshire Hathaway shareholders are also eligible for an 8% discount on GEICO insurance. GEICO is a wholly owned subsidiary of Berkshire Hathaway.)
You know Microsoft MICROSOFT CORP.
for its Windows and Office software. If you got a gaming fan in the family they know Microsoft for its wildly popular Xbox console. In the most recent quarter, Microsoft sold 2.4 million more Xbox units. The stock recently traded right around fair value. Apple APPLE INC.
requires a little bit more faith, as the current stock price is at a 14% premium to Morningstar fair value estimate. That not nose bleed territory, but whoo boy, the time to buy Apple was last Christmas or Chanukah, when the stock price was nearly 40% lower and the price/earnings ratio was below 14. Today it a more expensive 17.4. Unless you have a crazed Android devotee,
Google ALPHABET INC.