U.S. Shares - Sell or Keep??

Sea_Shell · 4 March 2018 at 2:49PM

We could use some advice, oh wise ones!!

DH has approx $27,000 worth of Shares in a US company (from a share-save scheme he was in). They have made capital gains of approx. $15,000 during the time held, and we are wondering what to do with them, going forwards.

We currently have no immediate need for the money, but were wondering whether to sell them and re-invest them in a UK S&S ISA, come April (already full this year).

Obviously shares in an individual company are VERY high risk, (they are in the Financial Sector) but the share price has pretty much doubled in value over the last 5 years, and they also pay a dividend (re-invested) worth approx. £300 per year. They are also subject to the vagaries of exchange rates.

Our current Share ISA, by comparison, has made approx. 30% gains over the last 5 years, in a "Balanced" fund. We use Fidelity platform at the moment.

We would be happy to take a fair bit of risk with this money....as it's pretty exposed at the moment anyway.

What would you guys do? Sell and re-invest in the UK, if so which "Adventurous" fund would you go for, or would you hold on to them?

There is also the "hassle factor" of selling the US shares, and charges for issue of GBP cheques or 'wire' transfer, which we haven't ascertained yet, or trying to bank a USD cheque in a UK bank!. It's via Morgan Stanley platform if anyone knows of the charges?! - But I guess we'd have to go through the hassle eventually, as we'll need the money someday, regardless!

All opinions welcomed....as we're going round in circles here!!!

:beer:

Alexland · 4 March 2018 at 2:59PM

Personally I would dispose of them now, spreading the sale across a couple of tax years if required, and invest in a well diversified global fund (there are so many good active or mostly passive options) within an ISA wrapper. Or maybe feed the money into a pension and invest if that's advantageous to your circumstances.

There are better high risk investments than owning individual shares.

Voyager2002 · 4 March 2018 at 4:52PM

Alexland wrote: »

Personally I would dispose of them now, spreading the sale across a couple of tax years if required, and invest in a well diversified global fund (there are so many good active or mostly passive options) within an ISA wrapper. Or maybe feed the money into a pension and invest if that's advantageous to your circumstances.

There are better high risk investments than owning individual shares.

Agreed. Since the OP mentioned the hassle factor of negotiating a US "check" I would explore whether the sale proceeds could be invested on the same platform. There are plenty of global ETFs and a few Investment Trusts traded on US markets, some of which might be appropriate.

Alexland · 4 March 2018 at 5:47PM

Sounds like eventually the US hassle needs to occur so I would be tempted to get it over with now while the OP is thinking about it rather than have it hang over them for years.

AnotherJoe · 4 March 2018 at 6:44PM

Can you not wire the proceeds ? I sold some us shares a few months back and wired the money direct into my bank account..
Last time I used a cheque (check?) it took about a week for it to arrive and then 6 to be cleared.

Sea_Shell · 4 March 2018 at 6:59PM

Thanks for all the replies so far...

They can do a 'wire' transfer, but their standard fee is 25 dollars, so will be higher for GBP transfer I'm sure (which they do offer). What might get the best exchange rate? Them or the bank making the calculation.

Sea_Shell · 5 March 2018 at 7:36AM

So, that's 2 votes for sell, and 0 for keep....anyone else want to offer an opinion?

Would your decisions still be to sell, if we took the more cautious approach and put the money in our existing "Balanced" ISA.

It's going to be really hard to narrow down the available funds and make a decision....but what is it Martin says....It's the right decision, you might just get a bad outcome??!!

Money_Help · 5 March 2018 at 9:12AM

Before deciding what to do with these individual shares you need to think about why you are investing? Why is money important to you? Once you know what you are saving/investing for it will give you an idea of what return you need to make and then you can decide on how much risk you need to take to achieve that return.

Voyager2002 · 5 March 2018 at 9:33AM

Money_Help wrote: »

Before deciding what to do with these individual shares you need to think about why you are investing? Why is money important to you? Once you know what you are saving/investing for it will give you an idea of what return you need to make and then you can decide on how much risk you need to take to achieve that return.

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).

Sea_Shell · 5 March 2018 at 9:36AM

Money_Help wrote: »

Before deciding what to do with these individual shares you need to think about why you are investing? Why is money important to you? Once you know what you are saving/investing for it will give you an idea of what return you need to make and then you can decide on how much risk you need to take to achieve that return.

It's a small percentage of our overall portfolio, if you include Cash, ISA's, Pensions. So we can use it for something a bit riskier, if that's what we decide. It's been nice to see them growing so much over the years, but obviously that could be wiped out in a heartbeat!! It would also make things simpler if we didn't have the US to deal with going forwards.

AnotherJoe · 5 March 2018 at 9:41AM

Sea_Shell wrote: »

Thanks for all the replies so far...

They can do a 'wire' transfer, but their standard fee is 25 dollars, so will be higher for GBP transfer I'm sure (which they do offer). What might get the best exchange rate? Them or the bank making the calculation.

I doubt it. My US broker (etrade) charges $25 for a wire transfer, end of. No extra charge for a foreign transfer I guess it's all the same to them.

Also, unless you pay more than $25 for fedex or similar you have to trust ordinary post with your $13,000 check. I sent two letters to the US in early December, one arrived a week later the other 7 weeks later. The later one had important documents in it I had to cancel and then pay to fax. Lesson learned.

As for the exchange rate, you'll get screwed whatever happens. You could try a wire transfer to a Fx service but I think I looked at it and it got too complex and I gave up.

FWIW I am gradually running down my US broker holdings selling the CGT limit each FY, just to keep it simple. I am either living off the money or buying additional investments (depends on the amount and your POV).

In your case , to answer your "what to do with the money" question, I suggest putting into a pension rather than ISA to get the tax uplift especially if you are a high rate taxpayer.

U.S. Shares - Sell or Keep??

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