Ask Matt: Can I give stock as a gift?

Q: Can I give stock as a gift? 

A: The holidays are a time for spending for many. Rather than buying yet another gift card, there are ways to make it more of a time of investing.

Most major brokerages will help you give stock as a gift. If you’re giving stock to a child, you’ll most likely need to set it up as a custodial account. After creating the account, you can then purchase an investment using the dollars you want to spend. Buying shares of a company that makes products the child likes - for example Walt Disney (DIS) or Hasbro (HAS) - is one way to go. Remember buying individual stocks will incur a commission. You might also buy an exchange traded fund or mutual fund, which owns these popular stocks long with many others. Many of these can be bought at no commission. That way more of your money goes to the gift, not the brokerage, and you can teach the value of diversification. You can buy a few of the items made by companies in the portfolio and put those under the tree. There are other options. Some services will frame and mail a paper certificate, but the fees are high. You might also consider funding the child’s education account or even setting one up if they haven’t already.

Paste BN markets reporter Matt Krantz answers a different reader question twice a week. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.