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TheStreet Open House

Stocking-Stuffer Stocks for the Holidays

BOSTON ( TheStreet) -- Thinking of purchasing an Apple (AAPL) iPod as a holiday gift for a family member? How about a gift subscription to Netflix (NFLX) or Sirius XM (SIRI)? A Disney (DIS) DVD, perhaps?

Forget about buying items that could instantly depreciate in value. Investment managers say it may be more valuable to give an actual ownership stake in the company. Quite literally, a stock investment can be the gift that keeps on giving.

While the purchase of stock will certainly save you the headache of navigating busy mall traffic in December, gifting shares of stock can also teach children and young adults an important lesson in investing.

"Stocks, especially when you frame the certificate, can be great learning tools for children," says Joline Godfrey, chief executive of Independent Means and author of Raising Financially Fit Kids. "It's vital that kids see the share of stock as something living, so talk about the company, find stories about the company leaders or founders, ask kids to rate the products, and help them chart the stock price on the walls of their bedrooms -- with butcher paper, of course!"

The stock market has yet to reel in the retail investor after the late 2008 implosion, which may dissuade some gift buyers from going this route. Godfrey says that after every bust, there are calls to take financial education seriously. And though there is incremental change, financial illiteracy is rampant, she says.

"Financial education is a competitive advantage among 21st-century kids," Godfrey says. "Families need to think about how to prepare kids for a world in which making a job, not taking a job, is the new norm. This next gen will need to be able to create their own personal safety nets, so basic financial skills -- saving, budgeting and tracking money -- will be imperative."

The importance of learning about investing at a young age isn't lost on fund managers.

"We had a competition when I was in sixth grade," Michael Cuggino, portfolio manager with the Permanent Portfolio Family of Funds, recalls. "We were learning about economics and we all had to pick three stocks out of The Wall Street Journal. Unfortunately, the winner wasn't me, but it fostered a lot of interest in stocks and how markets work."

Cuggino says that lesson turned him on to investments at an early age. His first stock ownership came in college, when he purchased 10 shares of AT&T (T). "I still have the stock certificate, even though it's dated and it's not worth anything. The $250 I spent is more worth the remembrance," he says.

Cuggino and several other fund managers have scanned their portfolios to come up with stock picks that gift buyers can use as replacements for traditional holiday gifts. Read on to see which stocks they think could be gift-wrapped and placed under the tree this holiday.

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