Disney Stock for Dummies...

[kristenrice]

Help me out...

I know *nothing* about buying/trading stock so keep it simple. We have savings accounts for our children (currently 10 and 8) which we will turn over to them when they are 18. I would like to take between $500 and $1K from each account and use it to buy some Disney stock. I am not looking for a "diversified portfolio" (I want to keep it simple) since the bulk of their savings is in a money market account. I'm no financial wizard, but it seems as though Disney is a fairly profitable company with a relatively stable future.

So, what would be the easiest, cheapest way to go about this? Would I have to buy the stock in my name because they are minors? Is Disney a stock that pays dividends? (I'm not sure what exactly that means, but DH inherited shares of a stock and we received dividend checks on occasion) I am not looking for any advice on how best to invest their money. I am just interested in how to invest a small portion in Disney.

 

[dpswift]

We just bought DS 11 some shares in Disney. We bought through our broker(not the cheapest option). He seemed to think that it was a good investment.

He also suggested Harley. The Harley suggestion may have been because we had just sold off the rest of DS 22's shares for college .

You might want to try one of the online discount brokers.

 

[meetooo]

scottrade.com it only takes $500 minimum deposit. The website will help you from there. very easy to do.

 

[supersnoop]

You can buy stock directly through Disney.
http://thewaltdisneycompany.com/content/shareholder-faqs
http://shareholder.broadridge.com/disneyinvestor

 

[Minnie-Mickey]

We have bought both through a broker and online thru computershare. They no longer sell through that site but sell through the site the previous poster listed. I like buying online. It is cheaper than going through a broker. It is typically an automatic investment ie every month they take a $ amount every month all year every year til you tell them to stop. Typically there is a min. amount. Disney was $50 a month when we started years ago. Each kid has one based on there interests. They take it directly out of your bank so you must be comfortable with this or you will need to go through a broker. The stock price has gone up and down over the years nothing too large either way. When the price went too high they had a split. A few times if I remember correctly. I tend to only look occasionally as I set it up for a set it and forget it type of account. Not truly forget it but occasional monitor. Well worth looking into.

 

[searlproudbottom]

I would set up accounts with one of the majors, I have chosen Charles Schawb.
You should set these accounts under the Uniform Gifts to minors act.

Here is a link to wiki to describe.

http://en.wikipedia.org/wiki/Uniform_Gifts_to_Minors_Act

I had set up accounts for my two daughters when they were born and had purchased Disney Stock. I had requested the certificates but now I am having second thoughts as I think it will be more expensive for the girls to cash in when it's time for collage.

 

[eliza61]

Help me out...

I know *nothing* about buying/trading stock so keep it simple. We have savings accounts for our children (currently 10 and 8) which we will turn over to them when they are 18. I would like to take between $500 and $1K from each account and use it to buy some Disney stock. I am not looking for a "diversified portfolio" (I want to keep it simple) since the bulk of their savings is in a money market account. I'm no financial wizard, but it seems as though Disney is a fairly profitable company with a relatively stable future.

So, what would be the easiest, cheapest way to go about this? Would I have to buy the stock in my name because they are minors? Is Disney a stock that pays dividends? (I'm not sure what exactly that means, but DH inherited shares of a stock and we received dividend checks on occasion) I am not looking for any advice on how best to invest their money. I am just interested in how to invest a small portion in Disney.

A dividend is a part of a company's profit that it "divies" up amongst it's share holders.

Some companies pay dividends, some do not. Apple investors are always screaming at Apple to loosen it's massive purse strings and pay dividends. Some companies like to keep their profits, they save it helps pay for innovation.

A company can decide how and when it wants to pay those dividends. Disney does pay a dividend but I think it's once a year. Others may pay quarterly.

Now just because a company does pay dividends may not mean you automatically get a check. some folks elect to have their dividends buy more stock.

Personally since your kids are still very young, I would set up an account that purchases stock consistently over a period of time. For example, you have 500 dollars right now I think Disney is about 75 bucks a share so you could buy maybe 5 shares depending on fees. but what happens next month if Disney stocks go down? (not that you should watch every month the price of your stock, that would drive you crazy). but effectively you've brought it at a high price.

I set up a savings account for my sons where every month on the 15th it purchases 100 bucks worth of 3 or 4 stocks (you can do it for mutual funds also). So some months they get more shares because the prices were lower, some months they may get less because the share price is high. The advantage to this is 1) it's a little less painful then needing thousands of dollars to invest and 2) for me it was a little easier getting into the routine of automatically saving. 3. some brokerage companies give you a discount on trading fees if you have an automatic account with them. remember some of your 1000 bucks is going to get eaten up on fees.


hope that gives you some thing to think about.

 

[polineedyan]

I just signed up with Fidelity (dotcom) last month. I dont like going thru a broker, because the fees are high and they are so heavy on diversification that its impossible sometimes to choose your own stock.lol.
Anyway, there was no minimum deposit. Its $7.99 a trade plus commission. Its better to buy multiple shares at once to save that. When paying $7.99 every time you buy, if you buy a single share at a time, it takes awhile to recoup that loss. Meaning, you are at a loss at the time of purchase. Thats all i've learned.lol.
Good luck. And the Harley Davidson is a good tip, too.Never thought of them.

 

[tvguy]

Would I have to buy the stock in my name because they are minors? .

Check with your state laws. Most states observe the Uniform Gift to Minors law, which puts both your name, and the minors name on the stock. It is a way for a minor to own something that normally they would not be allowed to own. Any income (dividends) or capital gains if the stock is sold, would be taxed at the minor's tax rate, and the minor's social security number is the one on the stock.

http://en.wikipedia.org/wiki/Uniform_Gifts_to_Minors_Act

 

[wiigirl]

scottrade.com it only takes $500 minimum deposit. The website will help you from there. very easy to do.

 

[KS_Disney_Dad]

Reinvesting dividends is an option and some companies offer dividend Reinvestment Plans (DRIP) that automatically put your dividend funds back into more stock. Be careful though...just because you don't receive a check for the dividends doesn't mean it isn't income. It is and can be taxable.

 

[Tink-n-Belle]

Disney stock is 75.42 right now. You can buy 6.6 shares for $500.

It wil cost you between $16-$20 to buy and sell those shares. Fidelity, e-trade, scotttrade all charge $7.99 -9.99 a trade.

The stock has to go up 2.42 to break even on the trading cost. Or around 2% apprx.

A dividend is income the company pays stockholders so in order for your shares to grow you must reinvest the dividend. The reinvested dividend buys more shares ( without cost or trading fees)

Individual stocks go up and down so please know that at the end of 10 years your stock could be worth $100, or $2000 depending how it performs. Only invest money you can afford to Lose.

The stock market has traded sideways for about 12 years, but 2013 was a very good year.......no one knows what will happen in the future.......I hope it keeps going up.......so we can all make some money on our investments.

If you want to own Disney research it first and then monitor your stock price often. Don't just buy and forget about it. It would be fun for the kids to look it up at the end of the week to see how its performing. Also, you can't panic if it goes down $4-$5 in a week....that happens......like when john Carter bombed at the box office (disney specific) or Greece gets downgraded (market specific). Just realize that yes the money market rate is horrible but you don't lose principal. With stock investing you can lose principal.

A mutual fund that invest in Disney might be a better choice.
Good luck

 

[Tink-n-Belle]

Disney stock was down $2.12 today Jan 13 or almost 3%.

What that means is if you don't own it you can buy it at a 3% discount to Fridays close.

If you bought your shares you'd be down 3% plus the trading cost of 2% to total 5%. The MM rate of .2 isn't looking so bad.

Just be careful trading stocks can be very rewarding but it can take your money faster than you realize. Over the long term you should do good but it's a risk and I would hate for you to lose hard earned money.

 

[kristenrice]

Just be careful trading stocks can be very rewarding but it can take your money faster than you realize. Over the long term you should do good but it's a risk and I would hate for you to lose hard earned money.

This (the bolded portion) was my thinking. The kids each have over $15K in their accounts and they are only 10 and 8 so I'd be looking for at least 8 years of investment. I was thinking that starting with just 10-20 shares for each of them would be a decent amount while still keeping a majority of their money in their money market accounts. They each get $75 in their account every two weeks. I would prefer to keep that going into their money market accounts instead of buying additional stock. Does that make sense? I'd like to buy a "lump sum" and not reinvest the dividends or add additional shares.

Thank you to everyone who has responded. You have all given me a lot to think about.

 

[eliza61]

This (the bolded portion) was my thinking. The kids each have over $15K in their accounts and they are only 10 and 8 so I'd be looking for at least 8 years of investment. I was thinking that starting with just 10-20 shares for each of them would be a decent amount while still keeping a majority of their money in their money market accounts. They each get $75 in their account every two weeks. I would prefer to keep that going into their money market accounts instead of buying additional stock. Does that make sense? I'd like to buy a "lump sum" and not reinvest the dividends or add additional shares.

Thank you to everyone who has responded. You have all given me a lot to think about.

Just be careful Kristen, that you are getting the most bag for your buck. Money market accounts are usually fdic covered but depending on where you are at the interest rate is usually just a bit better than a savings account.

This is the dilemma that many older adults (such as moi, lol) face. You want some thing safe but the cost of tuition is rising on average 5-6% above inflation. So at my bank TD bank a money market account with 15K in it is getting an APY of only 0.20% Yes that's 0.20%

Don't get me wrong, I totally understand the nervousness, like I said I'm thinking about retirement so I'm sorta in the same boat. How can I save safely, unfortunately with inflation eating up so much of any gains, I'm almost forced in investing in the market.


Hey have you looked into putting the money into a 529 account. for example I had one with T. Rowe price (we're using it now) and on average when we started it 12 years ago it's returned about 6%. Just another option

 

[crisi]

Can I ask why Disney? There are thousands of stocks to pick from. Disney is a good first stock for a Disney fan, and is a part of my portfolio currently - but I'm in hold mode on it - certainly not buy. Disney makes a lot of money, but because everyone knows that, that is built into their stock price. Their dividends are OK, but below where I'd buy them for dividends.


Buying stock is EASY. Knowing how to evaluate a stock, how to make a buy decision - and probably most importantly, knowing when to make a sell decision, understanding why you've taken a particular holding - that is hard.

With a single stock, you are at the mercy of a bad year - or several bad years - right when your kids would like to have that money. You get an early 80s Disney when they are turning 18 and you would have been better off buying Beanie Babies. You are putting a lot of trust into the board of a single company. That isn't bad if $1000 is play money for you and the kids to learn about the market and how companies work - if $1000 is a lot of money to you - buy an index fund.

 

[supersnoop]

Never put money in a stock that you can't afford to lose.

I bought Disney stock for my daughter at $17.12. I've cashed some out to maintain a balance between stocks, bonds, and money market. I agree with the previous poster that I wouldn't buy more Disney right now, but that's more of an emotional decision because I'm nervous at the current price. But then, I though $30 was too high for Tesla and was waiting for it to get back down to $23 before I bought in. Missed out on that one.