A Gift Idea For College Grads: Stock

Having trouble deciding on a gift for that recent college grad of yours? The best gift of all might be stocks.

The stock market can be intimidating to many young people who sometimes find it difficult to know where to begin. The gift of stock will open the world of investing and give a college grad more time in the market to make money.

Benzinga spoke with Dan Stein, CFP, a branch manager at a Charles Schwab Corporation SCHW location in Bethesda, Maryland, about investing for young people. 

“Investing is a way for young people to participate in the growth of the country and economy and build towards future financial goals like retirement, buying a house or simply creating wealth,” he said.

The Argument For Investing: Graduating from college is a great opportunity to start investing, with the power of compound interest being one of the primary reasons.

Starting at that age, an individual has the advantage of a long time horizon and will be able to reap higher returns: compounding makes a lifelong difference.

Eighty-nine percent of Americans believe a lack of financial literacy leads to social issues, according to a Charles Schwab 2020 Financial Literacy Survey.

A gift of stock can introduce the recent college graduate to critical financial knowledge.

Not Sure Where To Start? First, find the right broker for your beginner investor and get them set up with the proper brokerage account for their individual needs and goals.

Many young individuals have been investing and trading through mobile apps such as Robinhood. For recent college graduate getting started in investing, it might also make sense to use a well-respected brokerage platform such as Fidelity Investments or Charles Schwab, both of which offer commission-free equity trades for stocks and ETFs — though some restrictions do apply — in addition to great educational tools to help a beginner develop crucial financial literacy skills.

“At Schwab, our clients appreciate that we have some of the lowest-cost products in the industry, powerful trading platforms to help them navigate the market, and extensive research, tools, education and expert insights to help them make confident investment decisions," Stein told Benzinga. 

The company's Schwab Stock Slices tool is "designed to help younger investors get started in investing in stocks," he said. 

"Investors can own any of America's leading companies from the S&P 500 for as little as $5 each, even if the shares cost more." 

Appeal To Their Interests: A wide array of stocks and funds can pique a young individual’s excitement.

Is your college graduate socially conscious? Then consider the gift of a Socially Responsible Mutual Fund.

Benzinga spoke with Justin Larson, a high net worth specialist at Fidelity Investments who recommended, “anything out there that has changed the landscape for that sector like Tesla Inc TSLA or Apple Inc AAPL” as something that might be enticing to a young individual and provide them benefits in the long run.

Whatever stock is given as a gift, it will help the young adult get their foot in the door of the investing world. They will thank you for years to come.

(Photo by Felipe Gregate on Unsplash.)