Help.........dummy needs advise on US stock market

[jaideeguy]

I recently inherited some stocks from my dear departed Pop and they just sit and mostly go down even when the DJ is at it's peaks and I have had nothing but bad luck in my choices of stocks so far.

The portfolio was divided between 2 other siblings so my share is 1/3rd smaller than it started. Pop used to invest wildly and nostalgically but very diversified during the times when no one could go wrong with stocks. Now it's a different story and it seems time to sell off some while the market and the $ is strong and I feel that I need some professional advise...........if there are any pros here that deal with the American stock market.

Any advise appreciated..........and IF I do manage to cash out on some stocks, then what do with the proceeds???

[jcgodber]

At first I was going to offer some sage advice ---- BUY LOW SELL HIGH

BUT being serious

I would suggest sell all and sit on the cash deposited back in your home country

[Dave Phuket Sisaket]

Love seeing fellow deadheads in Thailand..

Sell them all now. Open a discount brokerage account online. Wait for a crash, check for the one year trailing earnings on the S&P 500 to have fallen to around 8-12, then buy ticker symbol SPY. It is a diversified exchange traded fund of funds replicating the S&P500. Next bull market you will feel like a genius. When to sell after that will be the tricky part....

[barry1312]

Guess really it depends on what the stocks are, do they provide a dividend, do you need the cash right now?

The Dollar will likely strengthen considerably as quantative easing is taken off so would expect a better exchange rate than of the recent past from next year onwards

You need to do due diligence on the stocks you have to see what there performance is likely to be in the upcoming months, register with Financial Times, they give comprehensive information

I certainly would not put money in a bank at current low interest rates there are a lot better opportunities than that out there, even a stock market tracker would of given over 20% so far this year

[infinity11]

Yes, we could be wrong but it appears this year and about now is the time to sell!!!

Last post impressed me.

The trick is having the balls to buy low.

[infinity11]

If you really want to catch the very TOP, you have to follow it very closely, the trading amount AND VOLUME and maybe even institutional sellers.

Large drops on higher volume over a number of days are suppose to be good indications.

Followed by up days on lower volume.

But you should listen and research the pros!

which i am far from

[bitcoinbob]

what stocks do you have in your portfolio ? , the Dow just close above 16,000 all time highs if the stocks you have are not making new highs, with the indexes then you have to see what sectors you are in.

[jaideeguy]

Thanks for the replies so far. It seems that the general consensus is to sell ASAP and that is my gut feeling too.

But my home currency is US$ and I don't have much faith in that hanging in there for much longer.

All the holdings are with a reputable broker [Fidelity] and their [cash] money market pays next to nothing in interest, but is secure.

Assume that the THB is not too secure now and I have way too much invested here already.

I'm past my mid 60's and can live out my life, but would like to leave something for my Thai family.

What about gold [physical or futures or mining]??

And no resources here in LOS for US financial planning??

[Thaikidave]

Dear jaideeguy,

Listening to the advice of online posters or even the "professionals" is likely to loose you a larger portion of your money. You can't time the market. That being said here's my advice, which is vastly superior to most. Either use Wealthfront (https://www.wealthfront.com/), or Vanguard LifeStrategy funds (https://investor.vanguard.com/home/). Wealthfront is an online investment management company that will manage your money for free up to $10,000 and for 0.25% over $10,000. They pick a strategy that fits your needs. Vanguard life strategy funds are almost as cheap but you have to figure out your needs on your own. Most investment advisers are outright scams, the others are people who think they can do more than they can and charge you for their "service". By the way. It's the end of the year so if you are selling you can split the sales, before the end of the year and after, to reduce the tax burden. Good Luck.

Sincerely

David

[infinity11]

be scared when everyone is greedy and greedy when everyone is scared

w buffet

[infinity11]

every boom is followed by a bust and vice verse

(coming soon?)

[brit1984]

doesnt make a lot of sense to hold a portfolio of individual stocks picked by someone else without any insight / understanding of the reasons why those stocks have been picked

given your story i would have thought investing in property (that you can see and enjoy today and leave to your heirs thereafter) would be the best fit for your circumstances

[Ulic]

Thanks for the replies so far. It seems that the general consensus is to sell ASAP and that is my gut feeling too.

But my home currency is US$ and I don't have much faith in that hanging in there for much longer.

All the holdings are with a reputable broker [Fidelity] and their [cash] money market pays next to nothing in interest, but is secure.

Assume that the THB is not too secure now and I have way too much invested here already.

I'm past my mid 60's and can live out my life, but would like to leave something for my Thai family.

What about gold [physical or futures or mining]??

And no resources here in LOS for US financial planning??

I do like the advice that has been offered. One more piece, things take longer than people predict but when they do they

happen faster than thought possible. I do think the US stock market will move up 15-20% higher before another correction.

While I think the US dollar is in for a rough ride I think that day is quite some time off. Many countries work hard to keep

there countries currencies strength vs the USD in a favourable range for trading but don't want it too low as imports like

oil and industrial machinery get to expensive. Picking the top or the bottom of a market is a bit of a mugs game. When you think it

is overvalued based on what you have read and it makes sense to you and your experience sell or buy. Try to invest in

companies that you understand. There products, there management etc.. Unless the there is inflation I am not a fan of gold.

Even though the US/ Japan/ are printing money like drunken sailors I don't see the inflation yet.

Best of luck

[qdinthailand]

Sell all would maybe good advice, especially since you don't know why pops bought them in the first place.

Put the money into a low cost stock index fund, like the large cap S&P 500 if you want to be in stocks. Then you don't care what stocks do individually; you're just trying to match what the large cap stocks are doing as a whole. (they go up, they go down.)

[thrilled]

Get yourself A good financial advisor.My portfolio doubled from 2005. If it hadn't been for my advisor I probably would be down from the bear market of 08. Ya might want to think about dividend paying stocks that give ya A dividend.

[jsflynn603]

Difficult to answer, but not for any of the reasons I see above.

The problem is the SIFI's (Systemically Important Financial Institutions). These are Bank America, NY Bank Mellon and similar mammoth institutions. They represent the "1%."

It makes no matter if one says they control the politicians because the West's economic situation is largely like the old idea of the tail wagging the dog.

So how does this matter?

The SIFI's (or SIBI -- insert banking instead of financial) are like adolescent kids on steroids. They play with money. Seem a ludicrous statement? Read this:

(from Wikipedia: "The total notional amount of all the outstanding positions at the end of June 2004 stood at $220 trillion. (source: BIS: [3]). By the end of 2007 this figure had risen to $596 trillion and in 2009 it stood at $615 trillion," Let's up that to a current one quadrillion. The SIFI's play in this sandbox.

In 2008 one single SIFI faltered and fell--and the US stepped in and bailed them, and everyone else out, a trillion here...a trillion there...

The questions now is: What if such a scenario happens again? And please consider that notional values of derivatives are at an all time high.

The answer might be another bail out. But this will not occur. What will occur in such a scenario is a bail-in. Search on Cyprus and bail-in. To sum up Cyprus in case you don't know: Simple take 30-50% of every dollar in every account in every bank and return bank stock (which nobody wanted). This is what happened.

Look at Poland recently. Poland seized much of all retirement funds and put all the money into Poland bonds. Of course this effectively lowered Poland's debt ratio so now Poland can borrow more. A safe scenario--I think not.

Think a bail-in might not be coming to your neighborhood (if and when necessary)? See: http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf (read actual page 49, I think .pdf page 59).

So how does this affect you?

Well, if you sell and put cash in the bank and a fiscal burp happens dominoes fall.

> If small FDIC comes into play and pays up to those in banks that fail. Oh--oops, FDIC's funds can only cover 1/2 of 1% of banks--if more fail then off to scenario "x." (bail-in?)

"Oh," you say: "but my money is held in stocks". True, and some advise to open a discount brokerage account. How very strange. In 1980 a brokerage firm charged ~$35 for a sell or buy order, whereas IB (Interactive Brokers) charge about $2. That 'ol $35 should be $70 which means to buy or sell at IB today is only 3% of what it used to be. Doesn't that seem strange?

Ask 100 people who own stocks the question: "Who owns your stock." All will say: "That's silly--I do." And 100 people will be wrong.

>95% of all stock today is held in street name. You hand over your $5,240 to brokerage x today and think you now own 10 shares of APPL. But you Don't. You now own a promise that the brokerage will sell some of their pile of goods and pay you what APPL is on the day that you sell. A promise! You own zero stock. (Grandpa in this case may have been wise enough to hold his stock registered in his name--but I doubt it--it's difficult do do because the brokerages want that money to play with in -- you guessed it -- the derivatives arena. (By the way the 5% is held in owner registered stock by--yup--the 1%--they know better.

> "Ah," you say: "But SPIC will insure me against brokerage failure!" True. But only true if SPIC's 1/2 of 1% funds do not run out and in any financial "burp" of any size (remember the quadrillion sized monster will likely make big burps) will deplete SPIC's funds in a flash.

Let's sum this up: You put money in the bank. Now the bank owns that money and owes you, the same as the bank owe the trash collector. You put money in a brokerage (unless you register the stock which can be done but is difficult) and think you own stock--but you don't you own a promise, the same as the brokerage owes to the trash collector.

One poster said: "Sell it and hold it as cash." This might be the wisest choice. If we face deflation holding a pile of paper ($100 bills) will be very wise and holding them insulates you from a bail-in. Holding a ton of mint boxes of nickels might be the best advice, after all they have true value (80% copper, 20% nickel--avoid Canadian nickels--they're magnetic now and I'll let you guess why) and let's face it--a ton of nickels (actually if you hold 100,000 this way it's 22,500 lbs or 11,25 tons) is somewhat theft resistant, not like a thousand 100 bills hidden in your mattress.

Gold--maybe, the pile will be smaller, but if we move to deflation gold could drop to $900/oz (I think it'll drop to ~$1170).

As long as QE in whatever form continues S&P 500 will rise but are we in a bubble? I think so. Read this: "By this historic measure, the market is expensive, with the ratio approximately 44% above its average (arithmetic mean) of 16.5 (16.50 to two decimal places), up from 42% last month." (See: http://www.advisorperspectives.com/dshort/updates/PE-Ratios-and-Market-Valuation.php)

So what to do? I'm not quite sure--ask me next year... Caveat: The above is simply food for thought and not meant to be advice.

[USNret]

I've been invested in the US stock market for about 8 years now, and I've enjoyed good results by subscribing to The Motley Fool stock advisor. There's an annual fee (it goes down if you subscribe for multi-year periods). They follow a buy-and-hold strategy. I.e., they don't sell just because a stock is down. As long as the company has a good cash position, strong leadership, a solid project & business plan, they will continue to hold through a stock's up & downs. I use Scottrade to place my trades, a discount broker. I am a firm believer in NOT taking advice from the company that holds you money as there is an inherent conflict of interest. In the past 4 years (recovering from the US recession) my money has tripled.

[menorah]

If you were to transfer all the relevant stocks, share options and bonds into my name I can guarantee a 350% return over the next 5 years but with no option to release investment until the end of the term.

It's a solid gold guaranteed win win offer too good to turn down, so act fast......the clock's ticking : )

[DogNo1]

The answer to your question depends on whether you want growth or income. For growth, the Vanguard funds are very good. For income, I suggest income securities (see Richard Lehmann's Income Securities Investor website.) He publishes a monthly newsletter. I don't recommend gold or silver except to hedge a small percentage of your portfolio. Physical gold and silver and their ETFs (GLD & SLV) pay no interest and their gains are taxed as ordinary income. Good luck with your money!

Edited November 25, 2013 by DogNo1

[kaldoverde]

Not a financial advisor, so take my opinion it for whatever it's worth.

If you don't need the money you can sell the stock, buy into physical silver (preferably coins as they are both a store of value and have numismatic value) and sit on it for the next few years.

Silver is likely to bottom out in the second half of December, when the fed is expected to announce tangible tappering measures so it will probably be a good time to buy. It may take several years, but eventually the US will wake up to a huge hangover from all this money printing, and when that happens safe havens will soar.

If you feel like experimenting a bit and this one is risky (I would recommend no more than 3% of your portfolio), have a go at bitcoin. It's a digital currency that is getting a lot of attention from the media and some big sillicon valley companies. I've been following it for 5 years now, bought them at $12 each, they're currently above $800. These coins fuel an entire paralel economy in both western and developing countries and their usage is growing fast, so I personally don't expect the bubble to burst until $5k per coin mark is reached.

In the end this is just an opinion. Best thing you can do is educate yourself and make your own decisions.

[diceq]

How anybody can have their money in the U.S stock market is beyond me. If it wasn't for the FED propping it up it would have collapsed already. Just a matter of time until the pyramid scheme collapses like a deck of cards.

[Ticketmaster]

Wow! TV has a lot of stock market experts. I'm duly impressed.

[jaideeguy]

Wow! TV has a lot of stock market experts. I'm duly impressed.

Good morning LOS and where ever the posts are coming from!

Yeah, and it's getting more confusing by the many differing opinions, but most seem to agree that now is the time to act on this portfolio before the next hiccup.

Strange that the most radical advise is coming from posters with low post counts..........wonder why?

I do appreciate the suggestions offered so far and will chew on them and hope that more come in.

Edited November 26, 2013 by jaideeguy

[craigt3365]

Ask 100 people what to do and you'll get 100 different suggestions. You can't time the market. Most who try don't succeed. A lot depends on your needs. If you need the money soon, say for retirement, etc. Then stocks are a very risky way to go. If you won't need it for quite some time, an index fund is a great way to go. Just put it in there and let it ride. With interest rates so low now, investors are really chasing returns. Tough times.

Picking stocks requires quite a bit of analysis to be successful. Even then, it ain't easy.

Best of luck!!

[Friendly Stranger]

You want advice, get a professionals opinion, no offense to the ppl on here, which some has been decent but a forum is no where to get advice for something like this.

Just beware of ppl trying to push certain types of instruments/groups of securities, as they get better commission on them.

It sounds like you want something that will preserve what you have with some income and a hedge against potential turmoil.

A mix of assets such as: Silver, gold, sound corp bonds, not t-bills and really short term instruments that are very liquid and of course cash. These IMHO are safe and you can change the balance once, if, the market starts to recover.

Also, at this point in time, do not get talked into a fee based program (charges based on a % of your assets).

Listen, there's a reason why some of the largest companies in the U.S have massive amounts of cash on hand and certain countries are hoarding gold, even though I think a bigger proportion s/b in silver, is underway as we speak.

But again, speak to a professional.

[diceq]

Strange that the most radical advise is coming from posters with low post counts..........wonder why?

I came here to discuss how yet again Thailand is facing another military coup. And I just happened to see this thread. I can't speak for the others though.

[wwest5829]

Thanks for the replies so far. It seems that the general consensus is to sell ASAP and that is my gut feeling too.

But my home currency is US$ and I don't have much faith in that hanging in there for much longer.

All the holdings are with a reputable broker [Fidelity] and their [cash] money market pays next to nothing in interest, but is secure.

Assume that the THB is not too secure now and I have way too much invested here already.

I'm past my mid 60's and can live out my life, but would like to leave something for my Thai family.

What about gold [physical or futures or mining]??

And no resources here in LOS for US financial planning??

I also inherited from my Father in the early 1990's. Those funds & my invested retirement finds are overwhelming fully in vested. The income spun off, and reinvested dividends, plus my Social Security allows a comfortable retirement here in Thailand. Depending on the amount involved, my best advice is to contact Fidelity, switch iffy stock holdings into mutual funds. Again, depending on gross amounts, you can either hold mutual funds or start to educate yourself on individual company stocks. Cashing out is bad advice. The tax bill will leave you poorer with nothing to show for it. I transfer funds, as needed, directly into my Bangkok Bank account (U.S. branch) as the low cost way to gain access to funds. Also in my 60's and enjoying my Thai retirement in Chiang Mai.

[Silurian]

If you want a "fairly safe" long term investment, go with index funds that follow blue chip, Dow 100 or top Nasdaq stocks. They might vary in the short term but typically go up in the long run.

I read about a financial investor that split his portfolio 50/50 into index funds and into stocks that he picked. He stated over the long run they performed pretty much the same but having to deal with much less stress with index funds.

If you are already with Fidelity, they have a number of index funds to choose from. If you want to be less risky, you might also want to look into some of their funds like a securities or bond fund that give dividends. They are usually less inclined to rapid price changes and can give 2 to 6 percent yearly dividends.

[Pinot]

Financial opinions on TV are worthless.

Open a trading account at Charles Schwab. At the same time open a bank account with them. One of the great things about Schwab is that they refund all ATM charges from anywhere in the world. You can trade online at discount rates when you want some cash, sell and take it out of the ATM.

I don't know what people are telling you here but selling and sitting in cash is a mistake. Inflation guarantees that's a losing strategy. You could bring over under $10k and put it in a Thai bank and get something like 3% interest. The $ is high now compared to the baht. More than $10k you have to report to the Uncle Sam.

Don't invest in anything you don't completely understand. Schwab has an excellent website that you can start to educate yourself. Right now I favor US stocks. Ignore bonds. I would go with large value stocks that pay dividends. There are a dozen ETFs you can buy that spread out risk by owning 100 different companies rather than just one. Schwab has many low cost ETFs and Mutual funds to choose from.

And whatever you do don't buy gold. And don't take my advice. (I always tell people that)

Edited November 26, 2013 by Pinot

[JSixpack]

http://www.marketwatch.com/lazyportfolio

http://assetbuilder.com/lazy_portfolios/

Edited November 26, 2013 by JSixpack