Inherited Shares

vincea

Hi,

Im after some advise... I stand to inherit £8991 worth of shares next month as part of a will trust.
I want to use this money as a deposit for my first house, which I will be looking to purchase late 2014, early 2015. I am unsure whether to stick with the shares for another year (things cant get any worse surely!?) or whether to sell the shares now and get lousy interest in a cash ISA.
They are
Henderson Euro FOC, 875 holding @ 783p a share
Foreign and Colonial Investment trust ordinary 25p, holding 578, @ 370.3 a share.

Obviously I am nervous about losing all the money but over a period of 12 months I would hope to receive more interest than an ISA.

Any help is appreciated!!

gadgetmind

vincea wrote: »

things cant get any worse surely!?

I've read your post a couple of times and really don't understand this part.

Perhaps you can explain?

vincea

sorry, I mean the economy as a whole. I would like to think that as a country we are looking slightly better than we were a year ago...
Which in turn will hopefully be reflected in my share price?
Complete novice so if my statement is stupid please correct me!

quotememiserable

The stock market is at a 5 year high right now, the footsie is close to the highest its ever been. I would suggest selling and putting it in an interest bearing account to lock in the value.

Buzby

Before you could realise any value you would need to speak to the Registrar and have the certicates reissued in your name - there would be a cost and you would need proof or authority to transfer to avoid a battle to realise the value.

There would also be dealing costs to pay when disposing of them, unless the company offered a buyack scheme.

gadgetmind

vincea wrote: »

sorry, I mean the economy as a whole. I would like to think that as a country we are looking slightly better than we were a year ago...
Which in turn will hopefully be reflected in my share price?

Equities (shares) have been in a strong bull (upwards) trend since 2009 and if anything the consensus view is that things are getting a bit giddy.

Your timescale now is such that anything more than a small equity exposure would be very dangerous and totally unnecessary. If you were going to be holding for ten to twenty years, the recommendations would be different, but it isn't, so you're best selling and just putting up with low interest rates.

If shares prices go up 10-20%, you'll perhaps feel you didn't do the right thing, but what if you held and they dropped 25% or even 50%? How would that upset your plans and for how long?

vincea

Wow! Thankyou all for your help, so really when I inherit (first week of June) my best bet is to sell.
I'll get them transferred into my name, I have the contact details of the lawyer who can do this for me... I will get him to provide me with a cost for selling the shares and also I'm going to contact my bank for a cost for them to sell them on my behalf. Any other advise that you could give is appreciated!

doughnutmachine

vincea wrote: »

sorry, I mean the economy as a whole. I would like to think that as a country we are looking slightly better than we were a year ago...
Which in turn will hopefully be reflected in my share price?
Complete novice so if my statement is stupid please correct me!

tbh the stock market is a funny old thing. sometimes bad economic news is good for shares.... bad news means more Quantitive Easing which means higher share prices

Masomnia

Ask yourself if you'd buy them. If not, probably best get rid.

bowlhead99

vincea wrote: »

I am unsure whether to stick with the shares for another year (things cant get any worse surely!?).....

....Henderson Euro FOC, 875 holding @ 783p a share

Glad to see everyone has already put you right. For context, I bought that Henderson European trust last year, August. If you go back to last June, the price was ~500p.

The price has gone up 57% since last June. If you think it could not get any worse, think again. I'm not selling at the moment (the underlying assets held by the trust are currently worth a good bit more than the 783p and I have a broad portfolio of investments in my pension). But if it fell back to 500p you'd lose 36% from Friday's value.

You probably don't want to keep your entire windfall in two funds like these unless you already had a broad portfolio with these two funds being the exact two funds you needed to make your portfolio perfectly balanced to your views on the world markets.

You should sell asap once they are yours, or even ask the executor if he/she can sell them before the June date to reduce risk. The will might contain terms that say the shares are to be inherited by you. However if you release them from this obligation in writing perhaps they would agree to preserve the value of the estate by selling and distribute the proceeds to you as cash. Otherwise you could gain or lose 10%+ in any one of the weeks until June, which is clearly a risk.

I guess if the will was executed years ago and next month is just when they get released from trust, it's perhaps too late to change, but consider asking the trustee.

quotememiserable

vincea wrote: »

I'll get them transferred into my name, I have the contact details of the lawyer who can do this for me... I will get him to provide me with a cost for selling the shares and also I'm going to contact my bank for a cost for them to sell them on my behalf. Any other advise that you could give is appreciated!

I'd go online to TDdirect and open an account, then you can sell them at £12.50 per trade. Or at least that gives you a benchmark to compare the price you get from anyone else.