Standard Life Shares

bertsilver

I have been left 162 shares in Standard Life and there is 2 options to deal with them.

1st is to reinvest dividends (DRIP)
2nd is to receive dividends as a cash payment.

Which is my best option?

Keep_pedalling

If you plan to hold on to them then option 1, if not then option 3 sell them.

AnotherJoe

bertsilver wrote: »

I have been left 162 shares in Standard Life and there is 2 options to deal with them.

1st is to reinvest dividends (DRIP)
2nd is to receive dividends as a cash payment.

Which is my best option?

Your best option is to sell them, unless you just happened to be thinking of buying 162 shares in Standard Life and so this was a happy* coincidence

*as happy as it could be given the circumstances.

bertsilver

AnotherJoe wrote: »

Your best option is to sell them, unless you just happened to be thinking of buying 162 shares in Standard Life and so this was a happy* coincidence

*as happy as it could be given the circumstances.

Thing is they were worth £700 pounds when I first inherited them, they are now worth just under £600, I don't need the money so really no need to sell.

dunstonh

bertsilver wrote: »

Thing is they were worth £700 pounds when I first inherited them, they are now worth just under £600, I don't need the money so really no need to sell.

And in the future they may be worth £800 or whatever. Investment values zig zag. Indeed, they could end up at zero. Such is the risk with single company shares.

bowlhead99

bertsilver wrote: »

Thing is they were worth £700 pounds when I first inherited them, they are now worth just under £600, I don't need the money so really no need to sell.

Really no need to keep them either, given you have no particular reason for wanting to hold an investment in this one business over and above the shares of thousands of other businesses or investment funds around the world.

Other than the sentimentality that someone you know who's now dead used to be their customer. Sentimentality is no reason to invest in a business.

My father used to have shares in Bradford and Bingley. He didn't buy them because he had evaluated all the banking and financial businesses around the world and decided that those particular shares would be best to hold as an investment - he wasn't at all a financial markets expert - and even if he was, selecting one company out of hundreds to be the best business to invest in, is an improbably difficult task. Rather, he held them because he got them free and had "really no reason to sell".

Still, I convinced him to sell and put his money in a broadly-invested investment fund within an ISA. The fund continues to do well- it has hundreds of underlying holdings and should continue to grow over time. Whereas Bradford and Bingley went bust and the shares are worth £0.

On your actual question though, if you're not going to go for the option 3 of selling them I would take the cash payment option.

a) You get some cash periodically rather than building up an investment that you don't really care about having - so that's no bad thing. And

b) instead of having some dividends (potentially taxable) happen in the background and be reinvested without you really noticing it happening but then perhaps needing to go and dig out paperwork later, you can have all dividend transactions go through your bank account, which is convenient for noticing what's happening in relation to an investment that you're not really going to be watching like a hawk.

AnotherJoe

bertsilver wrote: »

Thing is they were worth £700 pounds when I first inherited them, they are now worth just under £600, I don't need the money so really no need to sell.

If you had £600 would you buy SL shares with it?

If the answer is "no" then you should sell and invest the money somewhere that you would invest £600. Maybe a pension top up,(bump it up to £750 or even more if you are a high rate taxpayer) maybe pay a bit off the mortgage, whatever. Sticking with something just because you have it, especially if you'd not normally buy it, makes no sense.

Had you been left an ugly mantelpiece clock that was worth £700 as an antique and now is worth £600 would you feel inclined to keep it? If its worth £500 in a years time, will you still hang on because it was worth £700 once??

bertsilver

bowlhead99 wrote: »

Really no need to keep them either, given you have no particular reason for wanting to hold an investment in this one business over and above the shares of thousands of other businesses or investment funds around the world.

Other than the sentimentality that someone you know who's now dead used to be their customer. Sentimentality is no reason to invest in a business.

My father used to have shares in Bradford and Bingley. He didn't buy them because he had evaluated all the banking and financial businesses around the world and decided that those particular shares would be best to hold as an investment - he wasn't at all a financial markets expert - and even if he was, selecting one company out of hundreds to be the best business to invest in, is an improbably difficult task. Rather, he held them because he got them free and had "really no reason to sell".

Still, I convinced him to sell and put his money in a broadly-invested investment fund within an ISA. The fund continues to do well- it has hundreds of underlying holdings and should continue to grow over time. Whereas Bradford and Bingley went bust and the shares are worth £0.

On your actual question though, if you're not going to go for the option 3 of selling them I would take the cash payment option.

a) You get some cash periodically rather than building up an investment that you don't really care about having - so that's no bad thing. And

b) instead of having some dividends (potentially taxable) happen in the background and be reinvested without you really noticing it happening but then perhaps needing to go and dig out paperwork later, you can have all dividend transactions go through your bank account, which is convenient for noticing what's happening in relation to an investment that you're not really going to be watching like a hawk.

Thanks, that's just the advice I was looking for.

Wizard_of_Id

Just look on it as 'money for nothing' and not the historical value of the shares, they are only worth what you sell them for, unless you want to keep them for a long time, that's is what I would do.

digannio

Keep them and take the dividend. Big, stable company that has come up with investor bonuses in the past, one to hold or buy according to analysts, healthy 6% yield, no ongoing charge to hold the shares, many British pension companies invest in it.... what could possibly go wrong for its huge army of small investors:D