Std Life Shares V Mortgage

donstermonster · 4 October 2006 at 9:33AM

I am currently trying to pay off my mortgage as quickly as poss.(and succeeing!!!)

I have a dilemma - I have 641 Std Life shares worth approx £1700 that i got "for free"

I have a mortgage fixed @ 4.89% that i can overpay whenever i like very easily (debit card) with no penalties

Should i keep hold of my std life shares for a year and get an additional 32 shares for free (part of the original flotation offer, keep your shares for a year and get 1 in 20 additional shares free of charge) and hope they will increase from their current £2.70 ish each (bear in mind they were £2.30 each when floated)

OR

Should i sell them now and forego the additional 5% free shares and reduce my mortgage by an additional £1700?

I know there is no hard and fast way to go but would welcome your thought as to what you would do!

Cheers

DM

ReportInvestor · 4 October 2006 at 9:45AM

I would't say we know the answer, but we are collectively trying to find it out together on

This MSE thread on Standard Life shares

And it beats the Motley Fool coverage out of site

.

You will also get a dividend in May 2007, as well as the 5% shares in July.

The news last week about the first half results was a bit of a blow and you need to take into account that the price may be depressed after the bonus share issue. Obviously you will not be the only person thinking along these lines and there is bound to be selling pressure on the shares in July 2007. So it's not just a simple sum of adding the 5% bonus + the dividend and comparing it to mortgage interest you might save by cashing in now.

In the end, it probably comes down to what you think of the company's prospects, as the analysts will have had another set of results (the 2006 full year) to get their teeth into by July 2007.

suitusir · 4 October 2006 at 1:56PM

Hi,

I have kept my standard life shares, plus the extra I bought on allocation, the reasons are simple they are a great takeover target, the FSA are reducing the cash reserves limits which was one of the factors that made them demutalize.

The profits will start to increase.

Its your decision on which way they going to go, if you want to hold out for dividend and 5% shares then get an interest free credit card for 9 months take out £1700 ish and pay back monthly, knowing that in 9 months you getting 5% plus dividend plus maybe a takeover.

At end of nine months just sell shares(hopefully at a large profit) etc pay back whats left on credit card and keep the extra a bonus.

Just an idea,

Keep smiling

Kevin

ReportInvestor · 4 October 2006 at 2:09PM

I did the same as you, Kevin, and still keep large holding, having sold the majority.

So fingers crossed

.

suitusir wrote:

the FSA are reducing the cash reserves limits

I assume you meant "did increase" ?

Std Life Shares V Mortgage

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