Put a Stock in Someone's Stocking

It's that time of year again. Time to scour the malls hoping to find the perfect gift for everyone on your list. Some shoppers -- the ones who dutifully stood in line in the cold outside Best Buy (NYSE: BBY  ) and Staples (Nasdaq: SPLS  ) on the day after Thanksgiving, assuring themselves of the best specials of the season -- may well be finished with their purchasing for the year. (And if you are, you have my jealous congratulations.) However, for the rest of us mere mortals, buying great gifts can take a lot of determination and more than a little luck.

Here's an idea for a gift with a decidedly financial angle to it: Buy stock. Just imagine the oohs and ahhs around the tree as everyone opens their envelopes to find a brand-new crisp paper stock certificate inside. Prepare yourself for the heartfelt exclamations of thanks you'll get from your entire family. "Oh honey, you shouldn't have," your significant other may say. "I've always wanted one of these!"

Back to reality
Then again, you probably shouldn't get your hopes up. You can't expect receiving a share of Tiffany (NYSE: TIF  ) stock to match the thrill of getting a little blue box from the jeweler. Nor is expecting your kids to value shares of Sony (NYSE: SNE  ) as much as a new PlayStation 3 very realistic. Still, raising your kids with an awareness of financial issues is far from a bad thing. And who knows -- maybe one of your children will grow up to be the greatest investor of the next generation.

But that's not your primary goal. You're just looking for a nice gift for someone. Since quality is more important than quantity, you'd be happy with a single share of some well-known company, packaged nicely to play up not only its intrinsic economic value but also its artistic features.

Stock stores
You can buy single shares through companies such as OneShare and Frame A Stock, which give you access to dozens of different stocks. In addition to selling you the certificate itself, these companies offer to frame your stock certificate for you, as well as let you add an engraved message along with your gift. These companies also offer additional features, including clubs for teenagers and younger children that offer age-appropriate gifts and other materials.

Depending on what options you choose, you may end up paying more than you'd expect for your single share of stock. On top of the price of the share itself, you'll pay a one-time transfer fee of between $35 and $40, as well costs for the frame of as much as $40. If your focus is on giving someone a fun gift rather than an investment, however, these services may be exactly what you want.

Direct stock plans
A number of companies offer investors the opportunity to purchase shares directly without using a broker or other intermediary. By completing the proper paperwork and sending money directly to the company, investors can obtain company shares either with a one-time purchase or on an ongoing basis.

In most cases, you have the option of receiving a stock certificate or simply having your shares held in electronic form. Transfer agents, who are responsible for keeping track of who owns how many shares of a company, often charge fees to issue stock certificates, so check directly with the company's program rules to determine whether you want to obtain a certificate.

There are a few advantages of using a direct stock plan over simply buying a single share. First, if you wish to make additional purchases, a direct stock plan usually allows you to do so without incurring additional expenses in setting up a brand-new account. Second, if you buy stock in a company that pays dividends, many direct stock plans will reinvest your dividends to buy additional fractional shares. That keeps you from having to deal with cashing a dividend check for 25 cents every quarter.

Help to start investing
Of course, if you really want to help your kids or other family members to start investing, you'll want more than just shares of stock in a few different companies. You'll also want to show them some of the basics of investing in a way they can understand. That's where some of The Motley Fool's books can come in handy.

One such book, The Motley Fool Investment Guide for Teens, is tailor-made to help kids of all ages understand investing and the role it can play in their lives. The book doesn't limit itself to the esoteric mechanics of investments, but rather takes a more holistic approach toward personal finance and the decisions that people have to make in managing their finances. You'll also find Foolish books that focus on a range of other topics, including paying for education, handling money with your significant other, and starting an investment club.

For the right person, a gift of a company's shares can help open the door to a lifetime of interest in stocks and investing that's worth far more than its closing price on any given day. At the very least, it will give your loved ones the chance to hang a pretty picture on the wall. And if you're concerned that your gift won't be appreciated, you can always go ahead and buy that Tiffany necklace or Sony PlayStation 3, too.

Related articles:

All of The Motley Fool's products come with the Fool's 30-day guarantee. Feel free to try out any newsletter, book, or special report; if you don't like what you've sampled, just send it back for a full refund.

Best Buy is aMotley Fool Stock Advisorrecommendation. See what other companies Tom and David Gardner have recommended in their market-beating newsletter service with a 30-day free trial.

Fool contributor Dan Caplinger has made some serious gift mistakes in the past, and you can expect to see him out at the malls on Dec. 24 again this year. He doesn't own shares of any of the companies mentioned in this article. You don't have to walk the malls to find the Fool's disclosure policy.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 511918, ~/Articles/ArticleHandler.aspx, 4/18/2014 10:55:30 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement