Transcripts

"Money File"- Taking "Stock" in Gift Giving

SUZANNE PRATT: In the "Money File" tonight, the pros and cons of giving stocks as a gift. Here's Harriet Johnson Brackey, personal finance columnist at the "South Florida Sun Sentinel."

HARRIET JOHNSON BRACKEY, PERSONAL FINANCE REPORTER, SO. FLORIDA SUN- SENTINEL: It's that time of year, when people think about making a gift of securities. But some are wondering whether this is still smart, given the market's decline. No, it's not a sure thing. But if you're an investor, then you are doing your best to pick companies that you believe will survive these hard times. You believe that markets are the place where your money will eventually grow. So a gift of stock makes sense, in good markets as well as the mess were facing now. Still too worried to do that? Here's another option. Inflation- adjusted Treasury bonds just got a little more interesting. They pay a mixture of rates, one that is fixed for the 30-year life of the bond and an inflation kicker, which the Treasury sets twice a year. Up until last month, that fixed rate was zero, nothing, so your money only kept pace with rising prices. But in November, the Treasury upped the fixed rate to 0.7 percent. That's small, but I'll take it to stay a tiny step ahead of inflation. And the combined total return of the new bonds for the next six months is 5.64 percent. That's not bad. I-bonds have something else going for them: they're super safe. The money you invested will be there when you need it. So go ahead, make a gift of some securities. I see that as a vote of confidence in our system. I'm Harriet Johnson Brackey.