Be gentle, Stock Market is all new to me so I have questions:

[FirstLight]

I never had anything like disposable income, so playing the stock market was the last thing on my mind.

But my Dad, he was a saver...

So here we are, my sister and I splitting the stocks up after his passing. She was the main executor, so she handled it well and we both got in to see the broker last week. (so, yes, I plan on asking him questions too and not taking advice from strangers on the internet etc)

Now I am trying to "research" what I'm looking at and I honestly go blank like a deer in floodlights when I see all the numbers and graphs, LoL

The four specific stocks we hold are not doing well from what I can surmise. They have been consistently up and down - but more down - over the last year. (should I be looking at long haul numbers?)

BUT - looking at the general Dow, S&P numbers, everythnig looks like it is going up?

What's the economy *REALLY* doing these days? Will we continue to gain ground as we head into next year? Is it better for me to maybe 'diversify' and sell my crummy stocks for something flashy?
Better to get out now while the gettin is good and take my money and run?

I've always been kind of fatalistic, and seriously since COVID I think things are more likely to crash sooner than later. (And that means EVERYTHING, govt, money, society, zombies, etc)
SO my tendency is to think short term comfort and safety than long haul like retirement (Hell Im 53 and not looking at aging well either.)

SO ya, these are the disjointed thoughts of someone who has spent a lifetime AVOIDING looking at the Economy, etc... so if someone has a link to stocks for dummies...?

[spooky3]

1. A financial expert once told me that if I wasn't going to spend

Lots of time researching stocks etc., to put money in an S& P index fund, which invests in a wide variety of stocks, to mimic the performance of larger companies in general. So, you could sell and move the money there. However you should first get tax advice.

[elleng]

3. HEY, spooky3!

[spooky3]

4. Hi elleng!

[FirstLight]

5. yes, our broker-dude is on it...already saved us a bunch of taxes!

I like the idea of doing a S&P, was thinking I'd seel off the worst performers and try to get the rest rolled into something productive.

[3Hotdogs]

12. s & P index does that for you at the end of each year. Poor performers are dumped and replaced.

[elleng]

2. I'm 'spreading the pain,'

invested in S&P's broad Index Fund. (and I don't watch it.) Good luck.

https://www.ssga.com/us/en/intermediary/etfs/capabilities/spdr-core-equity-etfs/spy-sp-500?

[mahatmakanejeeves]

6. Buy an index fund.

Why?

Bad news: you're not the smartest person in the room. Sorry. If it's any consolation, neither am I. I've lost a LOT of money due to my inability to see my abundant limitations.

In the long run, you will not be able to beat the market. The rationale of an index fund is "if you can't beat 'em, join 'em." Vanguard has several big ones, and its management fees are minuscule. There are many others.

Full disclosure: I have money with Vanguard. This is not a solicitation to sell securities. I'm just a shlub on the internet, who may or may not have a clue.

Index fund

An index fund (also index tracker) is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that it can replicate the performance ( "track" ) of a specified basket of underlying investments. While index providers often emphasize that they are for-profit organizations, index providers have the ability to act as "reluctant regulators" when determining which companies are suitable for an index. Those rules may include tracking prominent indexes like the S&P 500 or the Dow Jones Industrial Average or implementation rules, such as tax-management, tracking error minimization, large block trading or patient/flexible trading strategies that allow for greater tracking error but lower market impact costs. Index funds may also have rules that screen for social and sustainable criteria.

An index fund's rules of construction clearly identify the type of companies suitable for the fund. The most commonly known index fund in the United States, the S&P 500 Index Fund, is based on the rules established by S&P Dow Jones Indices for their S&P 500 Index. Equity index funds would include groups of stocks with similar characteristics such as the size, value, profitability and/or geographic location of the companies. A group of stocks may include companies from the United States, Non-US Developed, emerging markets or frontier market countries. Additional index funds within these geographic markets may include indexes of companies that include rules based on company characteristics or factors, such as companies that are small, mid-sized, large, small value, large value, small growth, large growth, the level of gross profitability or investment capital, real estate, or indexes based on commodities and fixed-income. Companies are purchased and held within the index fund when they meet the specific index rules or parameters and are sold when they move outside of those rules or parameters. Think of an index fund as an investment utilizing rules-based investing. Some index providers announce changes of the companies in their index before the change date whilst other index providers do not make such announcements.

The main advantage of index funds for investors is they don't require much time to manage as the investors don't have to spend time analyzing various stocks or stock portfolios. Most investors also find it difficult to beat the performance of the S&P 500 Index. Some legal scholars have previously suggested a value maximization and agency-costs theory for understanding index funds stewardship.

{snip}

[IbogaProject]

13. If they were inherited them you might have options

If they were in a retirement fund then the following advice might not apply. If you inherited them directly the "cost basis" was reset to either day of death or 9 months later. If this is the case you can switch them out and maybe start with an index fund. Good luck and keep quiet about it mostly.

[lapfog_1]

7. my father in law, a very highly placed executive at a company you all have heard of

as in he was the executive Vice President and they gave him his own Gulfstream to fly him and his family wherever...

He taught me one thing about investing...

if you are investing for the long haul, invest in a basket of stocks... do not let a "financial advisor" churn your account ( day trading to make more money for THEM not you).

If you are doing your own investing, buy companies you know, do your own research on them, and when you buy, always set a stop loss amount. If the stock moves up, move up your stop loss. If you get stopped out ( i.e. the stock went down and the broker sold you shares automatically )... you have locked in the gains you have made ( or, if it never went up, you have limited your losses ). IF you are stopped out and you still LIKE the company, you can always buy back in as the stock starts to rise again.

Lets say the stock is at $100 / share now... and you buy 10 shares... set the stop loss at something like $90 or $85. If the stock goes to $120, move the stop loss to $110... and so on. Lock in the gains. Selling is always automatic.

I have done modestly well following this sage advice over the years. I'm too financially conservative to invest enough to make me wealthy but it provides a little bit of summer travel money or extra Christmas money ( or even extra Democratic Candidate contribution money! ).

He was a country club republican so I never mentioned that last bit to him... Passed away a few years ago now.

[multigraincracker]

8. I've done well with companies with

a good history of growth and dividends. Einstein once said the strongest force in the universe is compounding interest.

[Chainfire]

9. For most of us, investing in the market is like playing poker in a game

Where you bet, but don't get to deal, the rules can change without notice, you can't see the other players, they don't show you your cards, and someone else tells you whether and how much you won or lost. When it is over, you don't know who ended up with the big pot. I don't mind a good poker game, but not under those circumstances.

I have money in the market through my state retirement system, managed by pros and if I live long enough I will probably go broke.

[bucolic_frolic]

10. Stocks enable you to benefit from growth in the economy

I would say this to a broker, and see if it makes any sense to him. There are countless stories of large companies entering their growth stage and flying high for 2 or 3 decades. Name him some names: Microsoft, Apple, Google, Amazon, as well as big pharmaceuticals Moderna, building stocks Home Depot, Lowes, Nike, Best Buy, etc.

I heard of a guy who bought Apple, about 1990 or so. 600 shares, maybe $20k or thereabouts. It grew and split, grew and split. More than $1.6 million. McDonalds, 1972. $100 invested then would buy you a house or two today.

Solid companies, financially sound companies, with solid growth prospects. Not speculative, not a bet on a cancer cure or a crypto winner. Solid management.

If the broker hears all that and still wants to put you into a basket of stock and bond mutual funds, thank him and walk out the door. Diversification is fine, and growth stocks entering their super growth stage should be part of that diversification.

Give him 2 years to deliver. Doesn't have to be an ultimatum. "I'm willing to start small and hope for some good results and reassess annually". And I would not put all my eggs with one broker, or in one basket. I'd divvy it up into at least 20 different investments, probably with 2-4 brokers.

Yes, other posters are giving sound ideas too. Index funds are fine, but hold some cash in your investments so you can pounce if there's a bargain at some point.

There are tax consequences to investing, and inheriting. So consult the experts you need to.

[Think. Again.]

11. May I suggest...

...that you consider that your invested capital could have negative or positive affects on the world we share, and that profiting from causing harm in the world may not be a comfortable thing to do.

Perhaps you could take a good hard look at 'socially responsible' funds if you intend to keep your capital invested.

[FirstLight]

16. I really love this take...

My dad was all about communications, because he worked for MaBell back in the day...

SO maybe that can be my angle..I like it!

[Warpy]

14. Questions to ask

First, how long your dad held the stock, that has tax implications.

Second, how much income the portfolio is producing (the net worth doesn't tell the whole story).

Third, what's the risk allocation? Some stocks have wild swings, meaning the potential for fast money or big losses and others tend to sit there and not budge much no matter what the market is doing. You might want to change the ratio based on your age and your financial needs. Interest rates are up and most likely won''t crater again (it didn't work as advertised), so stocks aren't the only game in town, some funds in bonds, CDs and t-bills can reduce your risk if that's your goal, or you can increase your risk in the hope of increasing growth of the portfolio, if that's your goal.

Don't worry too much about the jargon right now. These questions will get you started.

[MichMan]

15. The Dow Jones average is based on 30 major stocks

That is the index that is communicated daily in the media, but again it just represents 30 stocks. You might not own any of them.

It can vary from one day to another based on just a couple of them going up or down. It is often used as a barometer of the entire stock market, but IMO the S&P 500 is a much better indicator since that is composed of 500 companies.