Stocks Make Cheap Gifts

November 26, 2008
Special Feature

You may not be willing to take a ride on the stock market roller coaster, but the current market turmoil gives you an excellent chance to buy some holiday gifts at a steep discount, especially for the youngsters on your gift list.

You may not be willing to take a ride on the stock market roller coaster, but the current market turmoil gives you an excellent chance to buy some holiday gifts at a steep discount, especially for the youngsters on your gift list. With many big-name stocks at historic lows, a gift of shares to a child or a teenager with a time horizon that might be measured in decades is almost guaranteed to turn a profit.

So, instead of tucking a hundred-dollar bill into a holiday card, consider putting that C-note into some of these blue-chip buys: Four shares of AT&T or DuPont, five shares of American Express or Microsoft, or about six shares of GE. Some riskier gifts might include 50 shares of AIG or Ford, or 25 shares of GM. Gifts that might be closer to a youngster’s interests: Five shares of Disney, two shares of Coca-Cola, or a tad less than two shares of McDonalds. (Note: Buying fractional shares is easy at Web sites like Sharebuilder.com.)

More conservative gift-givers may want to start a youngster on the road to financial well-being with a savings account or CD with a relatively high interest rate. Online banks like ING Direct usually offer better rates than brick-and-mortar banks. To check out the best rates on CDs and bank accounts, go to Bankrate.com.