Royal Dutch Shell shares.

anotherbob

In a recent Guardian interview Mark Carney warned that
"Companies and industries that are not moving towards zero-carbon emissions will be punished by investors and go bankrupt..."
The only shares I own are Royal Dutch Shell B Ordinary which were inherited from parents. I get about £800 p.a. dividends from them but I'm wondering if I should consider a change. I have no investment experience and would appreciate any advice. Needless to say I would not want to significantly reduce the income I'm getting from the shares.

george4064

Without knowing what other investments you hold, it appears as though you only hold Royal Dutch Shell B Shares.

The main issue is that you literally have all your eggs in one basket and therefore no diversification.

So first thing you need to do is to diversify, this would mean selling your RDS shares and re-investing in a globally diversified vehicle, such as a fund or investment trust.

Secondly, you should really look at your financial objectives to ascertain whether you actually need income from your investments. Whilst you might enjoy receiving the RDS dividends, do you actually need income from your investments? If yes, then look for a globally diversified income portfolio. If no, then cast your net wider with globally diversified funds/trusts that invest in companies regardless of their yield.

On a side-note which ties in with what your financial objectives are, but you might want to consider other asset classes in your portfolio (other than equities). Things such as bonds, infrastructure, property etc etc...

bowlhead99

You are getting a relatively high level of income compared to the market value of the shares because that's the nature of the company - people are not (e.g.) valuing Shell at 20x its annual profits because there are various risks and uncertainties and it's a global giant, not a high growth company.

As such, if you change for a different investment with a different profile you will likely get a lower level of income.

But really if you only hold this investment because you got it for free, and you didn't actively pick it to form part of a balanced portfolio that you know and understand - I would just sell it, get the £10-12k or whatever it's worth, and use the proceeds to buy a more balanced investment fund product, giving you instant exposure to a much broader set of shares.

With or without Carney's comments, it's clear that choosing to hold shares in just one single company out of the literally tens thousands of public companies on the planet, is a pretty risky way of taking £800 a year out of your investment.

itwasntme001

bowlhead99 wrote: »

With or without Carney's comments, it's clear that choosing to hold shares in just one single company out of the literally tens thousands of public companies on the planet, is a pretty risky way of taking £800 a year out of your investment.

But didn't you invest in WPCT - pretty risky way to make capital gains is it not?

Thrugelmir

anotherbob wrote: »

"Companies and industries that are not moving towards zero-carbon emissions will be punished by investors and go bankrupt..."

At the macro level this impacts almost every company listed in some way. In how they go about their everyday business in producing /generating their revenue, products and services. The focus on the oil majors is little more than the tip of the iceberg. Beneath the water many companies face seismic challenges in order to survive.

itwasntme001

OP - did your parents give you a reason or strategy as to why they held the shares? There may be a very good reason to continue holding e.g. maybe one of your parents worked in energy or an asset manager so is clued up about investments.


If i were holding Shell shares today i would probably hold as there's so much negativity on the sector and also global growth concerns feeding into lower oil prices, that it may pay to hold on for now and wait for a more opportunistic time to sell. That is of course if you do not need the money.

anotherbob

Thank you for your response.
I don't need the income from the shares, it usually goes into a Nationwide savings account into which I also pay a regular monthly amount from my (and my wife's) pension income. I use this to help my children, and their children, with occasional crises.
My concern over the RDS shares was twofold; first that they might imminently lose value, and second that my wife and I would like to minimize our contribution to the climate crisis. If we could do this by selling RDS and buying into something less "oily" that would be good, provided we would not be any worse off as a result. Cake & Eat it?

itwasntme001

Thrugelmir wrote: »

At the macro level this impacts almost every company listed in some way. In how they go about their everyday business in producing /generating their revenue, products and services. The focus on the oil majors is little more than the tip of the iceberg. Beneath the water many companies face seismic challenges in order to survive.

I would not believe what Carney says - he seems to come out with all sorts of rubbish.

itwasntme001

anotherbob wrote: »

Thank you for your response.
I don't need the income from the shares, it usually goes into a Nationwide savings account into which I also pay a regular monthly amount from my (and my wife's) pension income. I use this to help my children, and their children, with occasional crises.
My concern over the RDS shares was twofold; first that they might imminently lose value, and second that my wife and I would like to minimize our contribution to the climate crisis. If we could do this by selling RDS and buying into something less "oily" that would be good, provided we would not be any worse off as a result. Cake & Eat it?

There is no climate crisis. In your position then i would just sell and buy a diversified fund. Do not buy single shares given your concerns. Note that even well diversified funds can lose value at any time and they can lose quite a lot in a short time frame. But you shouldn't care if you hold for a long time.

xylophone

I should have thought you could do better than NW for your savings?

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

Thrugelmir

itwasntme001 wrote: »

I would not believe what Carney says - he seems to come out with all sorts of rubbish.

It's representative of a more general view. Oil has far more uses than many seem to realise. Tomorrow's survivors will need to embrace the new industrial revolution. Consumers and businessess voting with their wallets can soon put a company out of business. Companies need constant revenue to survive. No revenue. No cash generation.