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  • FIRST POST
    • Sea Shell
    • By Sea Shell 4th Mar 18, 1:49 PM
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    Sea Shell
    U.S. Shares - Sell or Keep??
    • #1
    • 4th Mar 18, 1:49 PM
    U.S. Shares - Sell or Keep?? 4th Mar 18 at 1:49 PM
    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!!!

    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
Page 1
    • Alexland
    • By Alexland 4th Mar 18, 1:59 PM
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    Alexland
    • #2
    • 4th Mar 18, 1:59 PM
    • #2
    • 4th Mar 18, 1:59 PM
    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.
    Last edited by Alexland; 04-03-2018 at 2:02 PM.
    • Voyager2002
    • By Voyager2002 4th Mar 18, 3:52 PM
    • 12,083 Posts
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    Voyager2002
    • #3
    • 4th Mar 18, 3:52 PM
    • #3
    • 4th Mar 18, 3:52 PM
    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.
    Originally posted by Alexland
    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
    • By Alexland 4th Mar 18, 4:47 PM
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    Alexland
    • #4
    • 4th Mar 18, 4:47 PM
    • #4
    • 4th Mar 18, 4:47 PM
    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
    • By AnotherJoe 4th Mar 18, 5:44 PM
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    AnotherJoe
    • #5
    • 4th Mar 18, 5:44 PM
    • #5
    • 4th Mar 18, 5:44 PM
    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
    • By Sea Shell 4th Mar 18, 5:59 PM
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    Sea Shell
    • #6
    • 4th Mar 18, 5:59 PM
    • #6
    • 4th Mar 18, 5:59 PM
    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.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Sea Shell
    • By Sea Shell 5th Mar 18, 6:36 AM
    • 733 Posts
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    Sea Shell
    • #7
    • 5th Mar 18, 6:36 AM
    • #7
    • 5th Mar 18, 6:36 AM
    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??!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Money Help
    • By Money Help 5th Mar 18, 8:12 AM
    • 63 Posts
    • 26 Thanks
    Money Help
    • #8
    • 5th Mar 18, 8:12 AM
    • #8
    • 5th Mar 18, 8:12 AM
    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.
    I'm a Chartered Financial Planner. Trying to be helpful without giving advice.
    • Voyager2002
    • By Voyager2002 5th Mar 18, 8:33 AM
    • 12,083 Posts
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    Voyager2002
    • #9
    • 5th Mar 18, 8:33 AM
    • #9
    • 5th Mar 18, 8:33 AM
    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.
    Originally posted by Money Help
    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
    • By Sea Shell 5th Mar 18, 8:36 AM
    • 733 Posts
    • 1,021 Thanks
    Sea Shell
    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.
    Originally posted by Money Help
    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.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • AnotherJoe
    • By AnotherJoe 5th Mar 18, 8:41 AM
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    AnotherJoe
    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.
    Originally posted by Sea Shell
    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.
    Last edited by AnotherJoe; 05-03-2018 at 8:45 AM.
    • Sea Shell
    • By Sea Shell 5th Mar 18, 8:42 AM
    • 733 Posts
    • 1,021 Thanks
    Sea Shell
    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).
    Originally posted by Voyager2002
    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.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • bowlhead99
    • By bowlhead99 5th Mar 18, 8:46 AM
    • 7,843 Posts
    • 14,319 Thanks
    bowlhead99
    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).
    Originally posted by Voyager2002
    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
    • By Sea Shell 22nd May 18, 6:50 AM
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    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!!!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • AnotherJoe
    • By AnotherJoe 22nd May 18, 8:02 AM
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    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
    • By Sea Shell 26th May 18, 6:44 AM
    • 733 Posts
    • 1,021 Thanks
    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??!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Voyager2002
    • By Voyager2002 26th May 18, 8:05 AM
    • 12,083 Posts
    • 8,217 Thanks
    Voyager2002
    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??!!
    Originally posted by Sea Shell
    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
    • By Sea Shell 26th May 18, 9:06 AM
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    Sea Shell
    Already maxing out pension contributions. So got that covered, thanks.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
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