what to do about shares?

[flowerpower6]

with the current financial situation, i am at a loss. have inherited shares from someones estate. should i sell now or keep the shares.. in my opinion, shares fluctuate everyday anyway, and who knows what will happen to the market in a few months. advice helpful.

[dr b]

What is your time horizon for the use of this money? If you intend to keep the money invested for a long time (>5 years) then keeping it in shares is probably best (if you don't need the money for 5 years who cares what happens to the value tomorrow or the next day?). In the longer term only shares are going to provide a return that keeps up with inflation.

How large is this sum compared to the rest of your investments? Is it all invested in one company? Does this inheritance cause you to have too many eggs in one basket so to speak? (to become undiversified). If so, and you want to keep the money in the stock market, it may make sense to sel the shares and invest in a broad market index fund instead. In this economy no one firm can be considered "safe" but the entire stock market will not go to zero (or if it does we're all in for it anyway).

If you have a shorter time horizon, consider selling the shares and putting the money in something less risky - bonds, bank account, etc.

If this is a significant sum of money you should really talk to a financial advisor to discuss tax implications, etc.

[dr b]

and if it's not a significant sum of money sell the shares and throw a nice party!

[flowerpower6]

thanks for your answer dr b,,,you sound very knowledgeable.. do you know anything about law and verbal agreements etc...just wondered.

[dr b]

my expertise, such as it is, is in finance, not law.

[flowerpower6]

ok dr b, thanks anway...will have a think about the shares.

[Twenty20]

Unless you need the money from the shares right now I'd advise hanging on to them, perhaps for several years. The stock market generally is very low at the moment and, although it may go lower in the short term, it should come up again longer term. Really depends on which market sector the shares are in though.