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Old 01-20-2014, 07:50 PM
 
3,491 posts, read 6,347,451 times
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Hello everybody, my very elderly grandfather gave me 6500 bucks worth of oil company stock and now its 13 or 14 grand.That was a number of years ago. I am thinking about selling while the gettings still good in a few years after he passes because the petroleum industry is very subject to booms and busts.I would put the proceeds in a mutual fund that would be safer. What do yall think I should do?I'm from Texas and I plan on working in the oil business and possibly start a company of my own in the future.
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Old 01-20-2014, 08:29 PM
 
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I have no idea what stock you own or whether 13K is much money to you, but if it's the only stock you own you'd be best to sell it and diversify your investments. A mutual fund could be a good fit. But you should look into establishing a Roth IRA so that you can grow your investment tax free.

Why wait to start your investment strategy though? Talk it over with your grandfather if you feel you need his permission to do something with the stock he gave you. He will likely see the wisdom in having an investment strategy as opposed to holding just one company's stock.
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Old 01-20-2014, 08:39 PM
 
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Its Chevron jack.I will establish a roth when I start working.I live with my parents and Idk if my dad will let me sell.
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Old 01-20-2014, 10:46 PM
 
Location: US Empire, Pac NW
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If you're that young, then I would say yes, sell it and put it into a ETF or low-fee mutual fund that covers the broader market. Meanwhile, read read read and learn the solid decades-long investing (NOT trading) strategies. You get rich slowly in this world unless you make it big by luck and/or investing in your own business.

By "your dad not letting you sell" does it mean it's in a trust? If so that means you might hae to meet certain requirements before you can access the stock. ANy idea what those are?

Good luck!
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Old 01-20-2014, 11:10 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
28,764 posts, read 47,934,228 times
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Rule of thumb is that you never want more than 10% of your assets in one stock (unless it's your company that you know and manage the risk)

As possible...Diversify and add 'stop-loss' to individual stocks with volatility exposure. (be sure to know the range that it normally 'recovers'.) Make sure you do this according to your parent's TAX situation !!! as soon as you are 18 you can transfer the acct from 'Minor' to personal, and your taxes will be at YOUR rate, rather than your parents (which could hurt their finances if you sell an appreciated gain).

See if your grandfather or parents can employ you in their businesses. I started my kids in ROTHs at age 12. It is a great place to keep your assets from Fafsa. (College financial aid gate keeper).

One kid managed ROTH with 'stock trading' (and is today a 'trader' as a career)

One did 'mutual finds', he is managing non-profits. They were about even at age 18 when they graduated from college. (Free college instead of High School). Since then... the one that actively manages is far ahead... but only due to extreme amounts of research and time and risk.

Get some training... Brinker (KSFO, Sunday afternoon is good training) Motley Fool Website (fool's school) is helpful. Many books, IBD, BUT... consider keeping the 'lion's share' in ETF index, where you can trade freely and grow as available options come up.

For investments... systematically put 20 - 30% of your income into investments every paycheck. 'Dollar cost Averaging'

Read "The Wealthy Barber", pretty good book and a very quick read that explains investing and how to win in the long term.
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Old 01-21-2014, 08:40 AM
 
3,491 posts, read 6,347,451 times
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Quote:
Originally Posted by eskercurve View Post
If you're that young, then I would say yes, sell it and put it into a ETF or low-fee mutual fund that covers the broader market. Meanwhile, read read read and learn the solid decades-long investing (NOT trading) strategies. You get rich slowly in this world unless you make it big by luck and/or investing in your own business.

By "your dad not letting you sell" does it mean it's in a trust? If so that means you might hae to meet certain requirements before you can access the stock. ANy idea what those are?

Good luck!
No he has just might not let me sell.In other words, he may forbid it.
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Old 01-21-2014, 09:00 AM
 
16,379 posts, read 20,476,697 times
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Quote:
Originally Posted by Westerntraveler View Post
No he has just might not let me sell.In other words, he may forbid it.
Once you are old enough and free to make your own choices...another option is to sell some shares and still keep ownership by keeping some shares. I assume you are currently under 18.
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Old 01-21-2014, 09:00 AM
 
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I would read 13 steps by the Motley Fool before starting, it is the best quick and easy guide one can read...less than an hour to get the basics. Plus it's free and easily accessible anywhere.

It depends on the company. If it has a big earning potential, and it is not a lot of money to you, then I would keep it and play it out. It is a very risky strategy, and I would not suggest it to others.

If it is a larger company where the increase will be slower, it's a good amount of money in your portfolio, and you have a lot of time...I would diversify. Be sure to take it on as a personal account, as your taxes will be lower, as a gift from your parents that can be tax free to them up to $14,000. Invest in a good diversifed index and start adding to it, and speculated (with individual stocks) with extra play money you get by saving.

Every industry has a cycle, where they go up and down based on what is in vogue. Lots of people try and time the market to sell at the peak...and almost everyone fails. If it is a good solid company it will outlast market downturns and recover. If you don't know...sell and diversify risk.
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Old 01-21-2014, 10:47 AM
 
Location: TX
795 posts, read 1,308,840 times
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The oil industry is not boom-and-bust when it comes to diversified supermajors like Chevron. In fact the overall energy industry Chevron typifies is surprisingly defensive.

Chevron's finances, management and prospects are excellent. Considering the tax consequences of selling such appreciated stock, and Chevron's potential and ironclad safety, I personally would not sell it just for the sake of diversifying.
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Old 01-21-2014, 01:12 PM
 
7,116 posts, read 8,354,451 times
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Generally speaking the future for the majors (like XOM and CVX) is probably pretty good.

There is a lot to say about 'diversifying, but you sound like you are young, have little to no assets and being too concerned with diversity a $13,000 portfolio is a but premature. On top of that, if you sell you are likely to have capital gains consequences.

Note that your investments are concentrated. Sell a little bit (like one quarter to one third) if you wish to play in another investment. This keeps your respect for Granddad and Dad alive, but it gives you a little wiggle room. If Granddad worked for CVX, you might simply respect him and hold onto the shares and diversify with future investments.

Either way, you aren't going to destroy your financial futures over $13,000. Most of all, be thankful and respectful that your family thought of you and generously gifted you with this investment.
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