Street Wise: Give the gift of financial security

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It is the most wonderful time of the year ... although not for the unemployed, or those whose home is in foreclosure, or those without adequate health insurance. In addition, it is with a saddened heart that we recognize the anniversary of the Newtown, Conn., tragedy.

Nonetheless, even a miniscule increase in gun regulation remains an anathema to a vocal minority. Reminds you of the attitude the banking industry has towards the Dodd-Frank Act and the newly implemented Volker Rule prohibiting proprietary trading.

Yet, Congress has finally taken on a bit of the persona of a reformed Scrooge by passing a budget, such as it is. And the Federal Reserve provided the clarity Wall Street was looking for. However, this is the holiday season and as critical as those issues are to our country's future, they are of a macro nature. On a more micro level is your personal investment strategy.

To the uninitiated Wall Street remains either a mystery or a forbidden fruit. Don't spill your eggnog but Wall Street is now, and always will be, an essential ingredient to your financial security. Additionally, there is no "good time," or "bad time," to invest. It is the methodology with which you allocate your investment resources and the quality of what you invest in that determines your level of success.

With a bit of work, anyone can successfully establish and maintain a profitable portfolio. And you can do it without the myriad of newsletters, books, charts and the seemingly endless series of free meal seminars that are so often hawked. To say you cannot is an excuse, not a reason.

But there is another side to investing. As you sit back, eggnog in hand, take a moment to ask yourself this question ... have you have ever helped a child, teenager or maybe even an adult learn some investment fundamentals? It is never too early or too late to introduce someone to the benefits of investing.

I mention this idea every year not because of the avalanche of email I receive requesting that I do, but because the discipline of investing will of necessity play a key role in determining a person's future financial security and well-being.

For example, you cannot do better for a young child than with a gift of a few shares of stock. I used to recommend Disney but Disney no longer sends out actual shares. However, a website such as offers share certificates for over 200 companies.

Whether the company you select is the most sanguine investment is irrelevant. What is important is that you obtain a framed stock certificate and hang it in a place where the recipient can view it regularly. For those family members who crave a more exciting life, there are companies such as Apple, Microsoft, Adobe and Intel that will likely raise their level of investment interest.

If video games are more to the liking of your investing guru, then companies such as Electronic Arts, Take-Two, and Activision Blizzard are candidates. Some companies in the entertainment arena have not done well but your kids probably know that better than you. They are also likely to be informed as to what the future bodes for certain companies, such as Facebook and Twitter. Finally, an enterprising teenager might even uncover a lesser known name that is ready to outperform its brethren.

So how do you go about setting up an account for your soon-to-be Wall Street prodigy? Start with a deep discount brokerage account that can be viewed on demand via the Internet. You want to maintain the degree of supervision and restriction on both trading and funds withdrawal that you deem necessary.

Ideally, you want to instill the idea of investing as opposed to trading. Yet, if your budding analyst can make a case for moving out of one stock and into another, go along with the idea. Learning should always take precedence.

Finally, let your young investor go it alone. Try out your ideas on your portfolio. The more a young person can learn about investing and investment research, the greater the likelihood that they will be able to establish a sound financial footing in their adult life.

Lauren Rudd is a financial writer and columnist. You can write to him at

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