Helping my family sell their oil stocks. What to buy?
"*(""Fee-only"" meaning the only money they make is the fee your folks pay directly; no kickbacks from financial products they're selling.) The answer to this is: for God's sake, leave it alone!  I commend you on wanting to help your family avoid more losses. You are right, that having most of one's retirement in one stock or sector is just silly. And again yes, if they're retired, they probably need some bonds.  But here's the thing, if they follow your advise and it doesn't work out, it will be a SERIOUS strain on your relationship. Of course you'll still be a family and they'll still love you, but emotionally, you are the reason they lost the money, and that will an elephant in between you. This is especially the case since we're talking about a lot of money here (presumably), and retirement money to boot.   You must understand the risk you're taking with your relationships. If you/they lose, at best it'll make things awkward, and you'll feel guilty about their impoverished retirement. At worst it can destroy your relationship with your folks.  What about if you win? Won't you be feted and appreciated by your folks for saving them from themselves? Yes, for a short while. Then life moves on. Everything returns to normal.  But here's the thing. You won't win. You can't. Because even if you're right here, and they win, that means both they and you will be eager for you to do it again. And at some point they'll take a hit based on your advise.    Can I be blunt here? You didn't even know that you can't avoid capital gains taxes by reinvesting stock gains. You don't know enough, and worse, you're not experienced enough. I deduce you're either a college student, or a recent grad. Which means you don't have experience investing your own money. You don't know how the market moves, you just know the theory.  You know who you are? You're me, 20 years ago. And thank God my grandparents ignored my advise. I was right about their utilities stocks back then, too. But I know from what I learned in the years afterwards, investing on my own account, that at some point I would have hurt them. And I would have had a very hard time living with that.  So, tell your folks to go visit a fee-only financial adviser to create a retirement plan.  Perhaps I'm reading into your post, but it seems like you're enthusiastic about investing; stocks, bonds, building wealth, etc. I love that. My advise -- go for it! Pull some money together, and open your own stock account. Do some trading! As much as people grouse about it, the market really is glorious. It's like playing Monopoly, but for keeps. I mean that in the best way possible. It's fun, you can build wealth doing it, and it provides a very useful social purpose.  In the spirit of that, check out these ideas (just for you, not for your folks!), based on ideas in your post:  Good luck."
Should I invest money in the pre-IPO stocks soon to be offered by the   company that I work for? Is it wise to do this? What should I be thinking about? What are the   risks? The last time I was offered pre-IPO friends and family stock, I purchased half of my allotment, and had my parents purchase the other half. Since I had a 6-month blackout period, I had to hold my portion. My parents sold their portion one day after the IPO. The price went up dramatically for about a day and a half, then dived continuously. My portion ended up being worthless. My parents made a few bucks. Good for them. Not a huge deal either way, since my cost was relatively low. If I had a chance to do it again, I'd give it all to friends or family instead of splitting it, and have them sell quickly if they realized a profit. You might be luckier than I was. The traditional role of a stockbroker is to arrange for the buying and selling of stock by finding buyers and sellers at an agreed upon price.  The broker does not purchase the stock for himself but merely arranges for the stock to be traded. A trader is one who purchases stock with the hope of selling it for a gain.  The trader will use a broker to help with the purchase and sale of a stock. I would say the most challenging fact for this assertion is that HFT firms operate with extremely limited capital bases. For a stock with say 10m shares ADV, even a very large and successful HFT strategy might use a position limit of no more than 5000 shares.  That is to say if you sum up and net the buys and sells for a stock across the day the HFT firm will never exceed 10,000 shares (2x position limits assuming it completely flipped) on a stock that trades 10,000,000 shares on a given day. The high volumes are attained through high turnover, the strategy might trade up to 500,000 shares (or 5% of the volume) attaining a 50x turnover.  But that brings me back to the original point. In the market microstructure literature market impact generally has been found to scale linearly or even sub-linearly for net volume executed.   If I alternate between thousands of 1 lot buy and sell orders, it would be very difficult for me to move the market because the market impact of every one of my buy orders roughly cancels the market impact of my almost exactly equal number of sell orders.   There might be a higher-order mechanism at work, but I'm genuinely curious what you think it might be. How could strategies that attain such small net positions have such out-sized impact on market direction? That's because they literally could not help you. It's not that they were just unwilling to. A hedge fund manager might be able to do it, because the person who bet on Facebook would be willing to let him borrow their shares.  An IPO in explain like I'm five:  A bank helps underwrite the shares pre offering. This means they buy the shares wholesale. They buy a large majority of the company in order to offer them to the public when the stock goes public. The bank does this for profit, the company does this become it helps raise their price. The bank that underwrites the stock is legally prohibited from short selling that stock for ***at least***  30 days before the IPO. This is to prevent the bank from trying to commit fraud by selling stock out the front door and betting against it out the back.   ***  So, now let's jump forward to the day of the IPO. The bank is offering stock to everyone who wants to buy it (other banks who will cut it up and sell it to more people). In order to short the stock someone must be willing to let you borrow their shares. Only the bank that underwrote it prohibited from short selling. It's possible but hard. The underwriter has the majority of the shares for the first thirty days anyways. They're just going to release enough of them to raise volume on the ticker symbol (volume is the amount of people buying and selling). The others the underwriter sold to are unwilling to let someone borrow their stock because they want to ride the price hike and shares are in short supply. So while it's possible to short shares, it's very hard. The underwriters limit the supply of shares to prevent that from happening. The underwriters can't just let you short their own shares because they are legally prohibited from it.   Basically, you're left with the fact that the only person who has enough supply to let you short, is prohibited by law from letting you do it. I'm sure Morgan Stanley would have been happy to let their customers short Facebook (as long as you did it through them) to hedge their bets. But they can't. Sales are useless. Profit determines value.  Others made good suggestions, but make sure you don't personally guarantee anthing.  Understand your requirements to continue having the investor involved. Understand who has approval authority and decision making authority, ie are you a hired gun or the managing owner?  Finally, probability of success is low, so do your homework, bust your ass, and understand when you will wall away (ie if you aren't profitable in 3 years, or below $500k in rev, etc) In general I would recommend to stay away from any video from a successful trader, at least those that claim to share their secrets. If they were that successful, why would they want company?  What they have most likely discovered is that they can make more money through videos and seminars than they can through trading. While not a video, GetSmarterAboutMoney has a good basic section on Stock markets without being purely Canada centric (as I see from your profile you are in NY). I know that also in our city, there are continuing education courses that often go over the basics like this, if you have a college nearby they might have something. Cheapest of all would be to hit your local library.  The fundamentals don't change that quickly that you need the latest and greatest - those are much more likely to be get-poor-quick schemes. Good Luck "There are two issues. The first is that you can manage all of your family's money. The second issue arises if you now ""own"" all of your family's money. As far as entities go, it is best to keep money or assets in as many different hands as possible. Right now, if someone sued you and won, they could take away not only your money, but your parents' and brother's money, under your name. Also, there are gift, estate and inheritance tax consequences to your parents and brother handing all their money to you. You should have three or four separate ""piles"" of money, one for yourself, one for your brother and one for each of your parents, or at least both of them as a couple. If someone sued one parent, the other parent, your brother and you are protected. You can have all these piles of money under your management. That is, your parents and brother should each maintain separate brokerage accounts from yours, and then give you the authorization to trade (but not withdraw from) their accounts. This could all be at the same brokerage house, to make the reporting and other logistics relatively easy." "For ""real"" investing I would usually recommend mutual funds.  But if you are trying to teach a kid about investing, I would recommend they choose individual stocks.   That will give them a great opportunity to follow the companies they bought in the news.  It also gives you an opportunity to sit down with them periodically and discuss their companies performance, economic news, etc. and how those things play into stock prices."