U.S. Shares - Sell or Keep??

Sea_Shell

Voyager2002 wrote: »

Cliche answer, but even someone who has good reason to have holdings this size in an individual company is highly unlikely to have a good reason to keep these shares. The fact that someone once worked for a company is not a good reason to choose that company's shares as opposed to any other(s).

I agree. DH only paid about $9000 for them 15 years ago, in a discounted share-save scheme. We've just never 'needed' the money and they've just sat there growing, and getting a dividend.

bowlhead99

Voyager2002 wrote: »

Cliche answer, but even someone who has good reason to have holdings this size in an individual company is highly unlikely to have a good reason to keep these shares. The fact that someone once worked for a company is not a good reason to choose that company's shares as opposed to any other(s).

Agreed, there are literally tens of thousands of companies around the planet and while it is high risk to put $27k into just one of them, that risk doesn't necessarily translate to higher rewards - because there is presumably no reason for that company to do extra better than the average of all the other companies on the planet, assuming it has been fairly valued by the market.

Basically, people correlate more risk with more reward. But that doesn't mean by investing in something risky (a single US company which happens to be your employer / former employer) you will deserve more reward. It means you should demand more reward, but doesn't mean there's any particular reason you'll get it!

Sell and replace the investment with a more diversified investment fund - whether 'adventurous' or not - would be my advice. Choice of fund is up to you as there are thousands to choose from and you haven't really said what you already hold. If you already hold a 'balanced' fund you could add to it but if it's not aggressively risky enough for you, you could either upgrade the whole lot to one mildly adventurous fund, or keep the balanced fund and add a more adventurous fund on the side using the proceeds from the share sale.

Sea_Shell

Well, we pressed the button to SELL all shares yesterday!!!! We waited to get this quarter dividend added, which is worth about £75, whch more than ofsets the fee for selling with GBP Bank Transfer which is approx. £30. Realised gain approx $9500 so about £7000, so well inside the Capital Gains allowance.

They've said it should take approx 5 working days for the money to show in our UK account, so although the sale price is agreed in $, we are now at the mercy of exchange rates, for the actual transfer.

We'll then be putting the money (once it clears) straight into a Global Fund ISA....which all looks to be "high" at the moment due to recent good performance. Lets hope it's onwards and upwards, and we're not investing at the top of the market!!!!

AnotherJoe

I think the next thing to look at is your "balanced" fund with Fidelity, 30% over the last 5 years is very poor compared to what the markets have done.

Now there's a trade off for risk so perhaps that is a fair trade off for that fund, eg its not a bad fund per se, but given what youve said about willing to take risk and longer term investment, maybe you should move into a more "adventurous" fund.

Sea_Shell

Well, the money arrived safe and well in our UK Account yesterday, and the exchange rate applied actually worked in our favour a bit, so got about £80 more than we were expecting.

The realised gain ended up being nearer £10,500, so still well within DH's CGT allowance for the year.

So this has been duly invested in our ISAs, into a Global fund.

We not looking to take that many risks with our investments, just want a steady return, so that's why we decided to sell these single company US shares...as that could have ended in tears!!

Looking at the overall figures, we only need to return approx. 3% above our own "real life" inflation to cover our outgoings and "break even", which is the long term plan. Surely that should be do-able??!!

Voyager2002

Sea_Shell wrote: »

Well, the money arrived safe and well in our UK Account yesterday, and the exchange rate applied actually worked in our favour a bit, so got about £80 more than we were expecting.

The realised gain ended up being nearer £10,500, so still well within DH's CGT allowance for the year.

So this has been duly invested in our ISAs, into a Global fund.

We not looking to take that many risks with our investments, just want a steady return, so that's why we decided to sell these single company US shares...as that could have ended in tears!!

Looking at the overall figures, we only need to return approx. 3% above our own "real life" inflation to cover our outgoings and "break even", which is the long term plan. Surely that should be do-able??!!

A sensible resolution... presumably you had reasons not to put the money into a pension scheme for the additional tax advantages.

Growth in real terms of 3% pa has historically been a realistic goal.

Sea_Shell

Already maxing out pension contributions. So got that covered, thanks.