Monday, April 13, 1998
Question: I have several shares of stock that I'd like to cash in. How do you go about doing that? This is the first time I've ever been involved in cashing them in, and I would like to know the procedure.
-- O.H. in Cincinnati.
Answer: Rosemary Haddad, senior financial consultant for Merrill Lynch in Cincinnati, says it's helpful to start by using the correct terminology. You'll be selling shares, not cashing them in. Selling implies that someone is willing to buy them at a price that can fluctuate.
The various stock markets and exchanges are the marketplaces where buyers and sellers are constantly negotiating the prices. A person generally enters this marketplace through a brokerage firm. You'll find them listed in the Yellow Pages, under the heading "Stock and Bond Brokers." You can call several to get an estimate on the commission charged to sell your shares. Most brokerages have minimum charges when just a few shares are involved.
The back of your stock certificate will need to be endorsed by the owners of the shares, exactly as their names appear on the front. Because it's sometimes tricky to find the correct place to sign, it's wise to wait until you get to the brokerage office to do this. You'll be asked to sign a W-9 because the proceeds of all stock sales must be reported to the Internal Revenue Service. After you complete the paperwork, you can tell the broker to sell. After the sale, the money will be available to you in three business days.
Another option for selling your shares might be contacting the company that issued them. Contact the company's investor relations department and ask if it has such a program. Some companies charge a small processing fee. If you sell through the company, you'll lose control of the timing of the sale and the price you receive. Most companies buy and sell at a specific time of the week or month, regardless of the market conditions. You'll get whatever the price is when it executes the transaction.
- Compiled by Perry Brothers
Readers should consider the advice from the Money Panel as general information only. Investors should seek the help of professionals on questions regarding their own portfolios because circumstances might vary.
