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How do you give the gift of gambling company stock?
Q. My wife and I enjoy visiting the casinos in Biloxi and playing the slots. I thought it would be a great surprise present for our anniversary to buy her some shares in some of the casinos we particularly like. The Palace Resort, Imperial Palace, Boomtown and Casino Magic are our favorites. Is it possible to purchase one or two shares of stock in them? How would I go about doing it?
A. Have you been reading Peter Lynch? The legendary money manager is a big believer in buying stock in familiar companies. Entertainment venues you enjoy visiting certainly could be a source for investment ideas.
But unless you plan to buy additional shares later, you should look at the purchase of one or two shares as more of a novelty than an investment. Stock certificates, particularly old ones, are popular as works of art and can be very attractive matted and framed.
The first step to buying stock in a backyard company is to find out who owns it. If the company is nearby, you can ask someone who works there. If it's a bit further away, as it is in this case, the Internet and the reference section of the public library are good places to start your search for corporate information.
By looking them up online, I found that Penn National Gaming Inc. (ticker symbol PENN) owns Boomtown Biloxi, while Pinnacle Entertainment Inc. (PNK) owns Casino Magic Biloxi. I found no ownership information online for the Palace Resort and the Imperial Palace, so I called each of them and was told they are privately owned.
If you were thinking of these shares as a potential investment, your next step would be to check out the companies. That involves collecting information about sales and profit trends, studying charts of stock prices and finding out what others have been saying about them, their competitors and the casino industry as a whole. In addition to the Internet and the library, you can get information from brokerage firms and from the companies themselves. After that, you have to apply your own judgment. If your research convinces you a company has good prospects for the future, you are ready to buy.
In most cases, buying stock requires opening a brokerage account. In addition to paying the current trading price of the stock, you will be charged a commission and probably will have to pay a fee to get a stock certificate issued, if that's what you have in mind. Some online brokerage firms, such as ShareBuilder specialize in small-stock purchases.
Alternatives to using brokers include buying shares directly in companies that have a direct purchase plan (you can find a list at www.wall-street.com) or buying through a company such as One Share of Stock Inc., which sells stock certificates specifically for gift presentations. Not every stock is available through these alternative sources.
By the way, if you enjoy gambling, be sure to set a wagering limit for yourself before you leave home. That way you can have your fun without putting a serious dent in your net worth.
Q. I will be 59 1/2 next March and plan to start withdrawing a small amount of money each month from one of my retirement accounts. I have IRAs, an annuity and a 401(k) savings plan. My question is: Which one should I withdraw from that would be most advantageous for me concerning taxes?
A. If any of your sources include after-tax contributions, withdraw from one of them first because your withdrawals will be partly tax-free. For example, if you made nondeductible contributions to your IRA, that would be a likely source. Many annuities are purchased after-tax, but if you bought yours through a retirement plan at work, it's probably all pretax money.
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-- Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731
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