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The Gift of Individual Stocks

The past decade has seen explosive growth in index mutual funds and exchange-traded funds—and for good reason. These baskets of securities are accessible and versatile, offering the potential for diversified exposure to nearly every corner of the market and often at a fraction of the cost of other investment vehicles.

Does that mean that buying specific equities may soon become a thing of the past? I don’t believe so. For millions of investors, there’s nothing like the thrill of researching and investing in the stocks of individual companies, and the techniques and tools for doing so (like those available at schwab.com/research) keep getting better.

Owning and following individual stocks is also a great way to improve your investing acumen, especially when you’re just starting out.

That’s why I encourage parents and grandparents to gift individual equities to their children and grandchildren. It’s a great way to introduce a young person to the market and—if they’re anything like my family—foster a lifelong passion for investing.

Charles R. Schwab

Founder & Chairman

Quiz: This Is Your Brain on Money
Preferred Securities: Fixed vs. Variable Rate Coupons

Important Disclosures

There are trading costs, associated with each buy and sell transaction for stocks. Frequent trading increases these costs.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers are obtained from what are considered reliable sources. However, their accuracy, completeness and reliability cannot be guaranteed.

Investing involves risk including loss of principal.

Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

(0518-8DYZ)

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