I need some help on stocks..........

[Twist_U_Up]

My mother in-law passed away a few weeks ago leaving her estate to my wife and I. She worked at GE for 35 years then retired, taking her severance package when they sold to Lockheed. During this time she amassed according to her ,ALOT of shares,I havent seen how much yet , lets just say she was very well off.

Now I was wondering, what the hell I should do? I have no knowledge of stocks.I have never dealt with them. I se the numbers in the paper and its all Greek to me.

I know that if the economy crashs we will probably lose them , right ?

I will discuss this with our lawyer at a later date but I dont want to walk in there un informed either.

Some pointers for a clueless person on what I should expect or what I should do ???

[wakemeupwhenitsover]

1. There are books availabe at the library.

I wouldn't know where to start.

Also, you could cross post this in the finance/investment forum if you haven't alredy cross posted it elsewhere.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topics&forum=327

good luck & I'm sorry about the passing of your MIL.

best.

[Twist_U_Up]

10. Thanks

She was sick for quite awhile, cancer is so ugly.

I was looking for a forumn like that thanks again.

[Warpy]

2. This is why people hire financial advisors/brokers

and they can be very helpful, although there are some sharp dealers out there who eat up a lot of an estate in fees.

I'm in the same boat you are, but luckily, I seem to have inherited my dad's financial advisor, too.

My advice is the same that I'm giving myself (and taking, too): buy a copy of "Investing for Dummies" to get the vocabulary and the bare bones down. Don't make any quick decisions, just let everything stay the way it is until you're up to speed on it, and keep your eyes open and check the portfolio total every month against what the stocks actually did that month.

I'll wish us both good luck.

[DavidMS]

6. For what its worth

http://www.amazon.com/gp/product/0262100703/ref=ase_thinglininc/002-8897294-2944040?s=books&v=glance&n=283155&tagActionCode=thinglininc

This book is about finding qualified financial professionals.

My only advice is to deversify and find somone you are comfortable with.

[Twist_U_Up]

11. These are the opinions I was hoping for

Good luck to you as well.

[Boojatta]

31. What is prudent about doing nothing?

Don't make any quick decisions, just let everything stay the way it is until you're up to speed on it, and keep your eyes open and check the portfolio total every month against what the stocks actually did that month.

I could see holding stock that currently has a depressed price if the company has good prospects in the near future. Other than that, what would prevent you from selling all the stocks and buying investment-grade bonds?

What is the purpose of checking the stock prices every month? If a stock goes down then do you buy more because you expect it to go back up or do you sell because you expect it to keep going down?

If you keep your money in bonds, then you will be able to sell some bonds and buy stocks when you have a plan.

[Botany]

3. diversify!

do not try to pick individual stocks .... buy the whole market.
Index Funds very safe long term $
International Funds (@ least 25% of your total value should be in these)
Small Cap Funds chances for big upside but downside too
T Bills & Bonds (only about 12% of your total) hedge against market drops
Keep some of the money in your MIL's stocks (10% or less)
Real Estate Funds show promise too.


Get a good adviser ..... interview 3 or more first.

Sorry about your MIL

[Zynx]

7. I would qualify this.

People who are well versed in the market can beat it with individual stocks by big margins relatively consistently. However, those are people like me who live and breathe the stock market. For the average person, they should almost never buy anything other than various types of index funds and search out the lowest fees possible.

[Botany]

9. Big ups for people like you!

But for people like me who don't want to or can't think about stocks
on an individual level ...... I like buying the whole shooting match and
playing the odds in the long run.

BTW except if you are DeLay or Frist and have day traders working in their offices
..... I bet you that they beat the market by a long way.
I wonder when this scam is going to come out? We could be talking about billions.

[Twist_U_Up]

12. LOL whoa LOL I'm in way over my head

I see a qualified advisor is defenitely in order.

[Botany]

15. No you aren't

Some great advice in this thread ..... and not mine too.
#5, #8, and the Wisconsin Guy are all spot on.

Remember diversify, read, do not be pressured, and index funds have always made money in the
long run. BTW % of money in various areas of your portfolio should be age and need based.

Also if anybody says this is guaranteed to make money ..... run.

[wain]

28. Outstanding reply

Short, to the point and an uncomplicated, balanced approach.

And a great empathy for the questioner reflected in a reasonable risk approach for a self-proclaimed novice.

How could I not like it? It pretty much confirms my present position! Real solid results over the long haul.

[Zynx]

4. I'm a little confused.

So she had a lot of GE or Lockheed shares?

In either case, both companies are solid and wouldn't lose very much even if the company slipped into a depression. Contrary to popular belief, holding on to blue chip companies through a downturn is not a bad thing. You don't lose everything. You may take a little haircut here or there, but long term you will be just fine. GE's being around since 1892 and has produced returns well in excess of the broad market.

The best thing to do if you feel uneasy about GE or Lochkeed, symbol LMT, is to sell those shares and move them into an index fund, either a general stock market index fund like the Vanguard Total Stock Market Index Fund, or you can split it between stocks and bonds to spread your bets around a little bit and buy a long term bond fund and a stock index fund.

[Twist_U_Up]

13. All GE stocks

she took her severance package as the company was changing hands. She retired from GE not Lockheed.

[Zynx]

16. Okay. My advice remains the same.

[Twist_U_Up]

19. I already feel squimish

Me,being on the outside of the workings of stock trading and investment looking in, alls I see are current trends and rumors that if we are attacked again the markets will crash.

Will we lose everything ? Alot? or a little?

Would anyone recommend cashing in and getting out totally ?

[Zynx]

30. You will only lose a fraction and then it will come back mostly.

The most you would lose in a stock like GE is 10%. Contrary to popular opinion, you don't lose everything in a stock market crash.

Long term, stocks are a great place to be, no question about it. They outperform every other asset class.

[sendero]

37. In the long term..

.... we all die :)

Tell someone who bought in in 1999 about the long term. When do you think they will be even? Ever?

I understand what you are saying, over the REALLY long term, stocks have always performed well. How old is this guy? Does he need any money in the near term? Is there any law that says that America as a country could not go down the tubes economically and basically NEVER recover (in our lifetimes).

I agree with most of the advice here, but I would add that no reward is without risk. When buy stocks, they GENERALLY outperform other investments over the LONG TERM, but they are fraught with risk, and I particularly disagree with the idea that a company like GE could never lose more than 10%. The whole market could lose 40% and take GE with it.

All IMHO of course.

[MADem]

5. You need a financial advisor, I think

You will get a zillion opinions from all sorts of people, and likely, they will all be different. Don't take this the wrong way, but it might help if you get one of those INVESTING FOR DUMMIES (the yellow books) out of the library and read through it, just so you have a basic, general idea of the terms the bums will throw at you and not feel totally at sea.

Good luck. Take your time, do your research, and you will make the right decisions. Don't rush into anything--if you feel pressured or uncomfortable, STEP BACK.

[Twist_U_Up]

14. The one thing I dont do

is go into things totally uninformed. Thats why I'm here and I can already see I have a mountain of homework to do.

on edit:
Thanks for your input. :)

[bif]

8. Based on my own personal experience

#1 rule: Get a good broker if it's a l;ot of money.
#2: Diversify. Don't tput all the money in one sector like tech stocks. Have a balanced portfolio.
#3. Put some in stocks and put some in mutual funds. Even there you might put some in US mutual funds and some overseas such as emerging markets: Indonesia, Latin America and India.
#4: Be patient.
#5: Learn when to bail.

[Inland]

17. Here's my advice: think of what you would do with cash.

Sure, you could probably educate yourself in stocks as investment. But might take months, and you already have plenty to do.

But the first lesson is this: think about what you would have done if your MinL had left you with the cash equivalent. Would you rush out and immediately put it in GE stock?

No, you wouldn' So why would you keep the investment there now? Keeping it there is the same as investing it there, especially now when you can sell the shares and pay no capital gains tax ("stepped up basis").

Not to sound like Rummy, but you don't know what you don't know about stock investing, so your chance of bettering an immediate sale would be entirely luck. I could consider selling everything, putting it in a six month CD. Do NOT spend even a dime right now on ANYTHING. Educate yourself. And then make additional decisions.

[Twist_U_Up]

20. This option I have thought of

If I were to cash in and invest in my businees, I know I could return at least the balance I once had in a few years.

I will educate mysself first and thank you .

[mslawstudent]

18. I'll try and answer any questions you have.

Before I went to law school I worked as a proprietary trader and I was licensed as a broker and worked with a former broker.
1. Step-up basis at death- If her estate exceed the estate tax exemption there may be taxes owing. However, once you receive the stocks their basis is either calculated from the date of death or a distribution date.
2. Due to the step up basis you can and should liquidate the portfolio without negative tax consequences.
3. Brokers- Alot of the people I worked with were former brokers. BE VERY CAREFULL with brokers. Old joker- "What's a broker's job" to make you Broker.
Full price brokers try to sell you funds with gigantic loads. Any substantial amount of money should generally be invested in individual issues both for tax timing reasons and fees. Mutual funds are generally a bad idea except for foreign investments for accounts over I'd say about 200k. (Where they are sometimes the only choice.) The only full service brokerage I'd even think about using is Edward Jones since the agents depend on referrals and strong community ties and are less likely to overcharge you that bad.
Remember this is not rocket science. Anything you do should make sense to you. Most stuff that sounds complicated is really a vehicle for high service fees.
Depending on your level of technical expertise you can probably use an internet broker. Charles Schwab comes to mind. See if you can find a fee based financial planner who will just advise you on what to do and won't sell you anything.
4. Of course you should make sure you have a cash reserve.

I'm currently waiting to have surgery and then I'm going to set up my law practice but I have some spare time currently and I'll be glad to answer any questions. I just set up some stuff for my grandparents so I'm relatively current.

[mslawstudent]

21. more thoughts

To fully answer the question of what steps I'd recommend I'd need to know.

1. How much time do you want to invest in this in terms of research both for setup and ongoing.
2. What level of risk you are comfortable with.
3. Would real estate be appropriate for you. (I mean no leverage you collect the rent stuff.)


Oh and
1. Stay away from hedge funds in general.
2. If its a substantial amount (like 1 million plus) all the major accounting firms have extremely well regarded personal investment advising arms.
3. Remember you or any competent financial advisor can recreate almost any domestic mutual fund and have control over the sales for tax issues.

[Twist_U_Up]

26. Actually

I will take as much time as I need to feel comfortable with the situation.

I'm not comfortable with any level of risk lol unless if I where to invest it back into my business that I know will get the returns need to pay off my investments in a few years.

I will have some real estate from the Will anyhow, My Mother in law owned an apartment house also. That will be enough for me to handle for now.

Thanks and I will keep you in mind. Can I add you to my buddy list ?

[fed-up]

22. Time to learn about Socially Responsible investing-why be a war profiteer?

I found these googling socially responsible investing

http://www.socialinvest.org/

The Social Investment Forum site offers comprehensive information, contacts & resources on socially responsible investing. Just jump in! You'll find lots of resources to help you take the next step.

http://www.greenmoneyjournal.com/

GreenMoneyJournal.com
Socially Responsible Investing – Growth & Impact
By Cliff Feigenbaum and Ted Ketcham

Just before we went to press with this issue the Social Investment Forum released the "2005 Report on Socially Responsible Investing in the US," which shares the impressive news that socially responsible investing (SRI) assets in the U.S. have now reached $2.29 trillion.

The report not only outlines this exciting financial growth, but also the impact SRI is having in people's lives.

[Twist_U_Up]

24. This is the first thing that came to mind

I dont want to support anything that has to do with this war or the people associated with it.

This WILL be one of my main concerns when we decide on what to do.

Thanks for the links I will bookmark and investigate them.

[Warpy]

29. I was shocked when I looked at my right wing dad's portfolio

There were no war stocks, no tobacco stocks, no booze stocks, and no Big Pill stocks. He'd always been derisive of any sort of socially responsible stuff.

Of course, he was disgusted enough with Stupid to vote for Kerry in 2004.

[Yoda Yada]

23. Educate Yourself

...BEFORE anything else. It would be in your best interest to KNOW YOUR BASIC OPTIONS (in general) before you seek out the financial advisor. Afterall, you have to know what questions to ask him/her. Also, as mentioned,.. diversify.

Go to a website like Morningstar.com and click on the "Discuss" link in the toolbar. I AM NOT ADVOCATING discussing your situation in total.....but, just by reading, you can get a quick overview of what is out there. (The "Diehard" forum is a good one for answering basic question.)

[Twist_U_Up]

25. Acknowledged and Thanks for the links. nt

[applegrove]

27. I would buy into a bundle of stocks. And put some of it in gold or real

estate or foreign currency. Don't know. Sounds scary.

[sabbat hunter]

32. sit down with a reputable

financial advisor. probably will want to make sure you are diversified. never be in just one stock or industry. if you have your money balanced in various stocks and bonds.

even if the economy goes into a recession, if you are well diversified you will weather the storm.

the stocks listed in the paper are listed by NY stock exchange symbol ie jpm = jp morgan chase


look for a good book in your local library too.

but i would definately sit down with a financial advisor and plan out your future with the money.

[porkrind]

33. Only go with investments you understand.

If you don't understand stocks, get out before you take a real beating. You can always get back in after you study up.

[CabalPowered]

34. First thing: Talk to a tax attorney or accountant

I'd talk to a couple of them before deciding anything. I'd also ask them who they'd recommend for an investment advisor. Also keep in mind that some brokerage houses are better than others. Do your due diligence. I can say that I've had a very good experience with Northwestern Mutual.

[screembloodymurder]

35. Diversify.

50% gold, 50% silver.

[BillORightsMan]

36. Diversity is the key

Make sure you not load up on any one stock or sector. This is what mutual funds do, but there are so many, make sure you pick well-diversified mutual funds.

I've found that Vanguard has some of the lowest fees in the business. A bonus is that Vanguard Funds were not caught up in the recent mutual fund scandal. www.vanguard.com
Check their Precious Metals and Mining fund - ticker http://finance.yahoo.com/q?d=t&s=VGPMX">VGPMX
and their Wellington Fund ticker - http://finance.yahoo.com/q?d=t&s=VWELX">VWELX

I would stay away from real estate right now, as this bubble is about to burst (unless you want to buy some land as a hedge for when the sh*t really hits the fan!).

Right now, I would seriously consider buying Gold and Silver immediately.
Visit www.kitco.com and get yourself into this bull market immediately.
Be sure to check out their "Pool Accounts".
:patriot:

6-month Gold


6-month Silver


EDIT: My mom recently passed, too, and I shored up my positions in Gold and Silver with the first disbursements from the estate, fyi. Sorry for your loss. I think about my mom every day.

[Greyhound]

38. Keep both of your eyes and any other eyes you can borrow from those you

trust on your broker. Avoid Merril-Lynch like the plague, they are stone cold crooks that have been caught stealing, churning, pumping, you name it, red-handed over and over again.
Assume that whoever you deal with has their own agenda and will not hesitate to take your $ for themselves at every opportunity.
If there is enough available to you, hire a lawyer to watch what the brokers are doing with your $.
Diversify, diversify, diversify.

[Coyote_Bandit]

39. Get professional advice

The first thing you need to consider are tax consequences of making any changes to the existing portfolio of securities. Find a good CPA. There are many legitimate ways to reduce tax exposure and most of them require planning.

The second thing you need is good investment advice. Personally I would choose either (1) an asset manager (preferably one holding a Chartered Financial Analyst designation) or (2) an experienced and credentialed financial planner who utilizes the services of professional asset managers. Unlike brokers, the fees of asset managers are tied directly to the performance of the assets in the account. This is not to say that all brokers offer poor service - indeed, some brokers also utilize services of professional asset managers. Take your time and look carefully in selecting an investment advisor. You will find them at banks, brokerage houses, financial service firms such as A.G. Edwards and a host of independent firms. The quality of service you will receive will be largely determined by two things (1) the products an adviser can offer to you and (2) the diligence of that adviser in servicing your account. That means that the account load of the adviser is a relevant issue as is the technology he is using to monitor his accounts and their holdings. Choose carefully. If you are unahppy with the service you receive there may be fees to transfer the holdings elsewhere.

The third thing you need is good legal advice. You need to consider your own estate planning and financial needs. This is especially true if there is a large amount of money involved - or if there are children (particularly minor children) involved. An attorney CPA who specializes in tax and estate planning work can also serve the professional needs of addressing tax concerns (mentioned above) and estate planning. These guys are usually pricier than your garden variety attorney but they are usually well worth the fee.