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Your supermarket checkout lane just got a little more dangerous to your wealth…
The Wall Street Journal reports you’ll soon see “stock cards” hanging between the tabloids and the candy racks.
They come in $25, $50, and $100 increments and look just like gift cards… but they’re fractional shares of companies’ stocks.
Stockpile, Inc.—creator of the cards—earns $4.95 from every card you buy. The cardholder can convert the dollar amount on the card into fractional shares of stock whenever he or she chooses.
The first cards to hit stores include 20 high-profile companies… including Coca-Cola (NYSE: KO), Apple (Nasdaq: AAPL), and electric carmaker Tesla (Nasdaq: TSLA).
Stockpile.com sports hundreds of stocks, index funds, and exchange-traded funds (ETFs).
Stockpile’s new cards look like they came straight out of a Monopoly box. But you’re using real cash to buy these shares, not Monopoly money… and that’s the danger.
Regular Daily readers know one of PBRG’s fundamental investment principles is:
Never invest in something you don’t understand.
The average grocery shopper has never looked at Twitter’s balance sheet… or read Tesla’s latest 10-K annual report. He has no idea which businesses are sound or which shares sport good values.
All he hears are “cool” sound bites about Tesla cars driving themselves… or Facebook providing Internet to Africa via satellites. He’ll use these as the basis for some bad equity purchases…
Bottom line: Investing in stocks isn’t as simple as throwing some Snickers bars into your cart at checkout. If you want to give someone the gift of stocks, consider offering them the gift of education instead.
We share proven investment wisdom and our unique insights in these pages (and on the PBRG website) for free, every single day. When you find value in these lessons, please share them with others. And the next time you feel the impulse to buy that $25 Tesla stock card… pass.