By Ben Esget
My father is extremely difficult to shop for, because he is the classic example of “What do you get the person that has everything?”
So, in 2003, I set out to get him a different type of gift. I wanted to buy him corporate stocks, but I specifically wanted the actual stock certificates so I had something to gift.
To my dismay, stock certificates are basically non-existent today.
I had decided to buy shares of Coca-Cola (KO), because it’s a long-standing American bellwether and the brand is very Christmas oriented.
Understanding my original plan would not come to fruition, I pushed forward and purchased shares in an account my mother set up. I explained the gift in a Christmas card and tied it to a bottle of Coke with Santa on it.
I recently pulled up a chart to see how my father’s gift has performed.
Since Christmas 2003, Coca Cola stock has returned about 17 percent in dividends and another 60 percent in appreciation. Even through a terrible recession, my father has almost doubled the size of his gift.
Coke has performed better than the market, but even the average company has had considerable appreciation.
This strategy can be used for almost any person. For instance, instead of buying the hunting lover a couple more duck calls, you could buy him or her shares in Cabelas (CAB). Or you could buy your favorite farmer shares in John Deer (DE). For your favorite bike lover, think Harley Davison (HOG) stock instead of more leather.
My mother loves coffee—maybe Santa will leave Starbucks (SBUX) stock under the tree or her.
I love this type of gift because:
1) It’s unique.
2) It has the potential to grow into a much greater gift.
3) It’s personalized.
4) It shows more thought and effort than an envelope stuffed with cash.
5) It’s a lot of fun for people to watch a stock that is related to their passions.
I must disclose that risk is a real factor with a gift of this sort, and for this reason I would gravitate toward large stable companies so that my gift won’t turn into a lump of coal.
But for the person that is hard to shop for, company stock can be a lot of fun and may even turn into a much bigger gift over time, just as my father’s shares of Coke.
The Christmas spirit is brought alive when I hear the jingle, “I’d like to buy the world a Coke.”
Personally, I would rather buy the world shares in Coke and let them save their calories for a piece of pie.
Ben Esget is the president of WealthMark LLC, an investment firm in Bellingham. His columns appear on BBJToday.com every other Wednesday. Esget also runs the finance blog Outsider-Trading.com, in an effort to level the playing field between Wall Street and Main Street. Contact him at 360-734-1323 or firstname.lastname@example.org.
Author’s note: The information in this column should not be construed as investment advice. Everyone’s goals and investment portfolios are unique. Please contact a financial adviser or an accountant for your particular needs.