1) If the investments/stocks were purchased with money that accrued during the year and khums was not taken out on that money, then at the end of the year you must determine the current value of the investments/stocks and pay khums based on it. However, if you purchased the investments/stock with money from which khums is already paid, then nothing is due on the original amount spent on it, but you must pay on the earnings (if any).
2. You can pay it from the cash you have saved up, you do not necessarily need to sell the shares