Where should I put my shares, and why?

Where should I put my shares, and why?

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Eamonnn

Original Poster:

23 posts

60 months

Sunday 19th May 2019
quotequote all
Over the years I’ve been gifted free shares as well as contributing to a SIP, buying partnership shares, receiving matching shares and earning dividend shares too (VOD.LN).

Redundancy is looming and I’ll be given all of my shares with no tax or NI liabilities. At the current SP I’d estimate value of around £15k.

Where could/should I put them?

I have no other shares nor do I have any tax efficient products/accounts.

I’d like to keep the shares for a few years and will either sell once the SP reaches a point I’m happy with or when the funds are needed for a home-enhancing project. I’m acutely aware I have all my eggs in one basket.

Is there any benefit is using a S&S ISA given I’m unlikely to breach the CGT threshold unless the SP sees a significant change? I was thinking I should just use something like HL’s Fund & Share Account (transaction fees of £12, no annual fees).

Any advice gratefully received.

Eamonnn

GliderRider

2,068 posts

80 months

Sunday 19th May 2019
quotequote all
Eamonnn said:
Over the years I’ve been gifted free shares as well as contributing to a SIP, buying partnership shares, receiving matching shares and earning dividend shares too (VOD.LN).

Redundancy is looming and I’ll be given all of my shares with no tax or NI liabilities. At the current SP I’d estimate value of around £15k.

Where could/should I put them?

I have no other shares nor do I have any tax efficient products/accounts.

I’d like to keep the shares for a few years and will either sell once the SP reaches a point I’m happy with or when the funds are needed for a home-enhancing project. I’m acutely aware I have all my eggs in one basket.

Is there any benefit is using a S&S ISA given I’m unlikely to breach the CGT threshold unless the SP sees a significant change? I was thinking I should just use something like HL’s Fund & Share Account (transaction fees of £12, no annual fees).

Any advice gratefully received
Eamonnn
Eamonnn, you don't say whether all these shares are in Vodaphone, or just the dividend shares. Vodaphone's preformance, from what I can see, has been pretty dire recently:


Image from Hargreaves Lansdown, of Vodaphone PLC at 10:30am 19/5/2019

Unless you know something about Vodaphone that the rest of us don't, you may want to consider selling some, just so, as you say, you don't have all your eggs in one basket. Maybe consider moving the money into a global investment trust, so the risk is well spread.

I cannot see any benefit having shares outside an ISA if you have unused ISA allowance available.


Edited by GliderRider on Sunday 19th May 10:40

Mr Pointy

11,147 posts

158 months

Sunday 19th May 2019
quotequote all
For what it's worth I recently moved a number of assorted shares into HL & they were very efficient to deal with. Mine were in certificated form & they were nominally allocated to my account the day after they arrived at HL. While you can get cheaper dealing costs from places such as X-O or iWeb if you aren't gong to be trading regularly the cost may not be a big issue. I looked at Halifax as well & they seemed ok:

http://www.x-o.co.uk/#
https://www.iweb-sharedealing.co.uk/share-dealing-...
https://www.halifax.co.uk/sharedealing/

anonymous-user

53 months

Sunday 19th May 2019
quotequote all
I'd sell all the shares and buy a low cost global equity index fund in an ISA on as cheap a platform as possible.

If you want "security" you'd need to do something different. However, there's a real risk you'd be watching your money shrink with returns lagging behind inflation.

Eamonnn

Original Poster:

23 posts

60 months

Sunday 19th May 2019
quotequote all
All shares are Vodafone.

GliderRider said:
I cannot see any benefit having shares outside an ISA if you have unused ISA allowance available.
The benefits I see are no annual fee.

What are the benefits of an ISA if I’m not going to exceed the CGT threshold (assuming I retain a 100% portfolio in the one, poor-performing stock)?

JulianPH

9,912 posts

113 months

Sunday 19th May 2019
quotequote all
Eamonnn said:
The benefits I see are no annual fee.

What are the benefits of an ISA if I’m not going to exceed the CGT threshold (assuming I retain a 100% portfolio in the one, poor-performing stock)?
No income tax on the dividends for a start, but then if this is within your annual dividend allowance scrap what I just said!

The real benefit is securing your ISA allowance every year for when you do reach the time when tax becomes an issue (which of course you would hope to achieve).

If you don't use it you loose it.

Ask anyone whose investments have grown into substantial sums over the year if they regret using their ISA allowances!

Benbay001

5,794 posts

156 months

Sunday 19th May 2019
quotequote all
Eamonnn said:
I’d like to keep the shares for a few years and will either sell once the SP reaches a point I’m happy with or when the funds are needed for a home-enhancing project. I’m acutely aware I have all my eggs in one basket.
If someone asked whether you currently think they are under valued and why, would you be able to explain?

If you cant then its a total gamble holding them.

Eamonnn

Original Poster:

23 posts

60 months

Sunday 19th May 2019
quotequote all
Benbay001 said:
If someone asked whether you currently think they are under valued and why, would you be able to explain?

If you cant then its a total gamble holding them.
I have no defence, it’s 100% a gamble, as would selling them and buying something else (based on my current knowledge).

anonymous-user

53 months

Sunday 19th May 2019
quotequote all
Eamonnn said:
......it’s 100% a gamble, as would selling them and buying something else (based on my current knowledge).
No it wouldn't - that's the whole point. Spread your risk without losing the benefit of equity (share) returns. It's best achieved by a small investor by buying into some sort of pooled arrangement and it's called "diversification".

Have a read around on this forum, including stuff posted by Derek Chevalier (fan of global index funds) and Julian PH (you'll find a useful thread called Intelligent Money).

Here's a link to Investopedia which talks about Diversification in everyday language, https://www.investopedia.com/terms/d/diversificati...

This single sentence extract is especially relevant, "This challenge is a key reason why mutual funds are so popular with retail investors. Buying shares in a mutual fund offers an inexpensive way to diversify investments."




LeoSayer

7,299 posts

243 months

Monday 20th May 2019
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OP not surprisingly you are getting posts questioning your strategy of holding onto these shares. IMO there’s no rational reason for you to keep them.

With any company, there are myriad events that could severely diminish your £15k. The single company risk is mitigated in an investment fund described by a number of other posters.

You only have to look at the history of Yahoo, Tesco, Nokia, Barclays etc. to see how massive companies share price can take a hit and struggle to recover.

The second half of the article below is good, describing regret aversion, anchoring etc. I’ve seen this in so many people and it has cost them lots of hard earned money.

https://www.theglobeandmail.com/investing/personal...

One point made in the article is to imagine you didn’t hold the shares and instead had £15k cash sat in your bank account. Would you use than £15k to go and buy Vodafone shares? Over every other company shares on the market? If you would, then carry on.

To find out more about investment funds, here is a good place to start: https://www.hl.co.uk/funds/help-choosing-funds/wea...

Eamonnn

Original Poster:

23 posts

60 months

Monday 20th May 2019
quotequote all
Thanks to all for your comments, it's very much appreciated, and apologies for my ignorance.

Having worked for Vodafone for 99% of my adult life I've spent that entire time brain-washed, buying shares & amassing free shares, hoping that the share price would increase, loyal to my employer without considering the bigger picture. Even in the advent of redundancy that blind loyalty remains, or should I say, remained!

Of course, you're all absolutely right - what started off as being a question of how best to retain my shareholding - either in an ISA or not - should in fact have been a more objective question of how I can sell my one stock and invest in a more diverse portfolio.

I'm fortunate that I'm currently still "up" but only because of all the matching shares I've accumulated.

So thank you again for the advice, it seems my best course of action is to sell the lot and retain the cash while I carry out the necessary research to make an informed (and balanced) decision on where I should invest.

Eamonnn

samdale

2,860 posts

183 months

Wednesday 22nd May 2019
quotequote all
Eamonnn said:
Thanks to all for your comments, it's very much appreciated, and apologies for my ignorance.

Having worked for Vodafone for 99% of my adult life I've spent that entire time brain-washed, buying shares & amassing free shares, hoping that the share price would increase, loyal to my employer without considering the bigger picture. Even in the advent of redundancy that blind loyalty remains, or should I say, remained!

Of course, you're all absolutely right - what started off as being a question of how best to retain my shareholding - either in an ISA or not - should in fact have been a more objective question of how I can sell my one stock and invest in a more diverse portfolio.

I'm fortunate that I'm currently still "up" but only because of all the matching shares I've accumulated.

So thank you again for the advice, it seems my best course of action is to sell the lot and retain the cash while I carry out the necessary research to make an informed (and balanced) decision on where I should invest.

Eamonnn
I had a very similar sum from a very similar sounding company share scheme. My shares were in an oil and gas company and with the current climate the shares to me seemed quite volatile.

I read through the sticky "intelligent money" thread at the top of this forum. Various options available but I ended up opening an account with them with most of the proceeds from selling the shares. There's a wealth of information in that thread already.