I'm about to inherit a single stock with a worth of just over 7 figures....

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harrington
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I'm about to inherit a single stock with a worth of just over 7 figures....

Post by harrington » Thu Jul 19, 2018 12:27 pm

It is an energy stock that my Dad has held as an employee and through retirement and reinvested the dividends. It generates about $35,000 per year in dividends. My brother has no interest in hanging on to his share so I will probably buy him out. Part of me wants to continue holding it to pass on to the next generation and part of me says to sell it and buy an index fund for more diversification. Thoughts?

TIAX
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by TIAX » Thu Jul 19, 2018 12:29 pm

Do you otherwise own this stock? If not, why not? What is the point of buying your brother out. You can just purchase more of the stock.

Yes, this is a terrible idea.

j0nnyg1984
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by j0nnyg1984 » Thu Jul 19, 2018 12:29 pm

You'll have to take care to manage the tax hit, but yes, I would definitely get out of it and into something like VTSAX.

Why would you "buy your brother out?" Let him manage his half as he wishes.

PVW
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by PVW » Thu Jul 19, 2018 12:31 pm

Your brother sounds like a boglehead. Why do you have an emotional attachment to these stocks?

bubbadog
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by bubbadog » Thu Jul 19, 2018 12:33 pm

I would not be comfortable with that much money in a single stock. I would just convert it to my simple 3 fund portfolio at the desired percentages.

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cheese_breath
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by cheese_breath » Thu Jul 19, 2018 12:34 pm

Listen to the part that wants to diversify. I don't know what stock you're referring to, but I know a lot of to big to fail companies have gone belly up. Don't take the chance this might eventually be one.
The surest way to know the future is when it becomes the past.

livesoft
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by livesoft » Thu Jul 19, 2018 12:34 pm

Forget about sentimentality. That's a trap. Your asset allocation right now should not be what your dad's asset allocation was. It is even possible that he felt trapped in the position because of taxes. And investing is different from years ago. Products are different. Index funds that are passively-managed and low expense ratio are now available that were not available decades ago.

I have told my kids to not be sentimental about any investments they inherit from me. They should feel free to sell any and all of them and buy the investments that match their needs and asset allocation plan.

So let this thread be a lesson to all of those reading who have large positions that they expect their heirs to inherit. They should tell their future heirs now not to attach any sentimental value to anything and tell them that selling is the first order of business before any capital gains/losses get tacked on.

And besides: You can pass on your index funds to the next generation. That's what will happen in my family.
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Pajamas
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Pajamas » Thu Jul 19, 2018 12:35 pm

harrington wrote:
Thu Jul 19, 2018 12:27 pm
Part of me wants to continue holding it to pass on to the next generation and part of me says to sell it and buy an index fund for more diversification.
Unless you hold enough of the stock to actually control the corporation it doesn't make any sense to want to pass it on to the next generation. Wealth yes, an individual holding, no. Money is fungible. Don't get attached to anything much less a particular investment.

Dottie57
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Dottie57 » Thu Jul 19, 2018 12:36 pm

A single stock is risky. Do not be sentimental with stocks. I would sell and put into 3 fund portfolio.

Sorry about Dad. And happy for you that he left you such a nice inheritance.

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bottlecap
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by bottlecap » Thu Jul 19, 2018 12:38 pm

My wife’s father, his siblings, and a few other relatives inherited more than $50,000 a piece of stock in a company from a relative that worked there for 35 years. All told it was nearly $800,000.00.

Everyone but his spendthrift sister held onto the stock. One brother bought her out. She almost certainly spent the money.

That stock was Enron.

Holding onto the stock poses a terrible risk for you.

JT

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simplesimon
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by simplesimon » Thu Jul 19, 2018 12:39 pm

I wonder how many people faced this predicament with GE stock 2-3 years ago and what they ended up doing...

alex_686
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by alex_686 » Thu Jul 19, 2018 12:41 pm

One word: Enron

Why do you want to hold a single concentrated position? There are arguments for it, but those arguments center around on why you think that the stock is currently undervalued, that it has a low costs basis that needs some fancy handling, etc. Not for emotional reasons. I am with those who would urge you to dump the stock and reinvest into your optimal AA.

GAAP
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by GAAP » Thu Jul 19, 2018 12:43 pm

You want to be sentimental and earn about 3.5% nominal, when a balanced portfolio would probably earn around 3-4% real?

You prefer the extreme exposure to one stock in a volatile industry? Just a reminder, Enron was in that industry...

You don't think you will ever want a more balanced portfolio and are willing to give up a one-time opportunity to do so at minimal tax cost?

Just some immediate thoughts that came to mind -- I'm sure I could come up with more reasons without much difficulty.

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Jack FFR1846 » Thu Jul 19, 2018 12:44 pm

The basis is the fair market value on the date of the death. If it hasn't gone up at all since then, your tax is zero.

Sell it all right now. Once sold, ask what to do with the money. You'll get various answers, but I guarantee you, nobody is going to tell you to buy the stock it's in right now.

I won't use the word Enron because I never owned it. I will use the word Polaroid because it was the cure to buying single stocks for me.
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mpnret
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by mpnret » Thu Jul 19, 2018 12:51 pm

Sell it and diversify. If you just inherited it you should get a step in cost basis and not have to worry about the tax hit. If that's the case now is the time.

MiddleOfTheRoad
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by MiddleOfTheRoad » Thu Jul 19, 2018 12:53 pm

Yes. Now is the perfect time to sell and diversify. No cap gain tax because of the step up!

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Grt2bOutdoors » Thu Jul 19, 2018 12:55 pm

harrington wrote:
Thu Jul 19, 2018 12:27 pm
It is an energy stock that my Dad has held as an employee and through retirement and reinvested the dividends. It generates about $35,000 per year in dividends. My brother has no interest in hanging on to his share so I will probably buy him out. Part of me wants to continue holding it to pass on to the next generation and part of me says to sell it and buy an index fund for more diversification. Thoughts?
Keep $10K of it in stock, sell everything else. $10K is well within the realm of investing. Sell everything else and diversify.
Do you need the income? If you do, you can allocate your portfolio in such a manner that it too generates $35K but does so with thousands of different securities, instead of just 1. Think about it. How did your dad feel about 2016, February? That was the low in energy sector. What was it worth then?>=
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

ramsfan
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by ramsfan » Thu Jul 19, 2018 12:59 pm

I would recommend selling all of it and diversifying.

However, I do understand the emotional part of wanting to keep it in the family to hand down. It creates a story that can be passed down, learn from, etc...

One idea would be to sell 90% of your holding, and retain 10% long term. To pass down. Just a thought.

PhilosophyAndrew
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by PhilosophyAndrew » Thu Jul 19, 2018 1:00 pm

OP, the side of you that wants to pass on the stock to the next generation is foresaking the benefits of diversification for understandable but imprudent emotional reasons.

Now is the time to sell to take advantage of your stepped-up cost basis. Do you have a Bogleheads investment plan? If not, I would re-invest the sales proceeds once you have developed such a plan.

Andy.

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siamond
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by siamond » Thu Jul 19, 2018 1:09 pm

ramsfan wrote:
Thu Jul 19, 2018 12:59 pm
I would recommend selling all of it and diversifying.

However, I do understand the emotional part of wanting to keep it in the family to hand down. It creates a story that can be passed down, learn from, etc...

One idea would be to sell 90% of your holding, and retain 10% long term. To pass down. Just a thought.
Exactly my thinking. Being rational is very important, but... sentimentality makes life better. There is room for some balance here, like this 90/10 idea.

livesoft
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by livesoft » Thu Jul 19, 2018 1:14 pm

That 10% for the next generation just dooms the next generation to the same mistake.
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by KyleAAA » Thu Jul 19, 2018 1:16 pm

I like the idea of selling 90-95% and holding on to the rest. But the reality of the situation is that the probability of the company surviving into the next generation isn't particularly high, even if it has survived for the last 100 years. Keep that in mind.

aristotelian
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by aristotelian » Thu Jul 19, 2018 1:24 pm

What do you mean "buy him out"? What difference does it make if you buy the stocks from him or a broker on the open market?

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by chevca » Thu Jul 19, 2018 1:27 pm

simplesimon wrote:
Thu Jul 19, 2018 12:39 pm
I wonder how many people faced this predicament with GE stock 2-3 years ago and what they ended up doing...
This was exactly my thought when I read the OP. Folks with everything in GE probably thought they had a forever stock that paid dividends too. Nothing is forever...

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by stimulacra » Thu Jul 19, 2018 1:31 pm

Sound's like you are sentimental about your dad's nest-egg… I think to be a good steward of your dad's legacy, and that's what his inheritance is… I would consider diversifying either in a 3-fund portfolio or a conservative life strategy fund (since your previous posts suggest you are retired and hold some of those funds already).

I think by diversifying, you should be able to preserve and easily grow your father's legacy for future generations and provide a solid foundation for intergenerational wealth.

I would let your brother do what he wants with his half. If these are shares of a publicly traded company, his shares or any other shares you can buy on the open market are indistinguishable. I wouldn't get sentimental about preserving the lot.

Chaconne
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Chaconne » Thu Jul 19, 2018 1:32 pm

Regarding passing on the stock itself to your heirs, perhaps you could instead consider the wealth it represents as your father's legacy. THAT is worth passing on to the next generation, and doing so would honor your father. I believe others here are correct in saying that the wealth will be better enhanced and preserved through diversification.

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by mervinj7 » Thu Jul 19, 2018 1:36 pm

I think you have a lot of good advice in this thread. All of them point to the same path; do not buy your brother's share, sell your own share, and finally reinvest according to your asset allocation.

harrington
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by harrington » Thu Jul 19, 2018 1:43 pm

I let my emotions get the best of me and I agree that selling the stock is the correct route to take......I used to tell my Parents that they were taking a huge risk holding all this stock in one company. I guess I knew the correct answer all along. Thanks for the advice.

straws46
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by straws46 » Thu Jul 19, 2018 1:52 pm

If you ever get a stepped-up basis for long held securities, take advantage and sell. If you want to keep some in memory of your dad, then keep a few shares and pass them on to the next generation sooner than later. Just my opinion.

mhalley
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by mhalley » Thu Jul 19, 2018 1:52 pm

Most everyone would say that much stock in one company is too risky. How about this idea: get a paper stock certificate, and have it made into a plaque commemorating your fathers strong work ethic and loyalty to his company and generosity to his heirs. Perhaps have one made for all of his heirs that received the stock.

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by oldzey » Thu Jul 19, 2018 1:56 pm

bottlecap wrote:
Thu Jul 19, 2018 12:38 pm
My wife’s father, his siblings, and a few other relatives inherited more than $50,000 a piece of stock in a company from a relative that worked there for 35 years. All told it was nearly $800,000.00.

Everyone but his spendthrift sister held onto the stock. One brother bought her out. She almost certainly spent the money.

That stock was Enron.

Holding onto the stock poses a terrible risk for you.

JT
+1 - great example. Hopefully, the spendthrift sister spent the money on shares of VTSAX.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

ExitStageLeft
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by ExitStageLeft » Thu Jul 19, 2018 2:00 pm

straws46 wrote:
Thu Jul 19, 2018 1:52 pm
If you ever get a stepped-up basis for long held securities, take advantage and sell. If you want to keep some in memory of your dad, then keep a few shares and pass them on to the next generation sooner than later. Just my opinion.
I like this idea. You can give up to $15k to each of your heirs with no gift tax obligation. Let each of your children get a piece of your dad's legacy.

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by BolderBoy » Thu Jul 19, 2018 2:14 pm

Jack FFR1846 wrote:
Thu Jul 19, 2018 12:44 pm
The basis is the fair market value on the date of the death. If it hasn't gone up at all since then, your tax is zero.

Sell it all right now. Once sold, ask what to do with the money. You'll get various answers, but I guarantee you, nobody is going to tell you to buy the stock it's in right now.
+1. This is the best advice that money can buy!
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Doom&Gloom » Thu Jul 19, 2018 2:22 pm

Keep 100 (or 1000) shares if you really need to keep the attachment to your dad, but make a sound business decision with the bulk of it.

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Reb Tevye
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Reb Tevye » Thu Jul 19, 2018 2:26 pm

A single stock is a fast way to get rich, or a fast way to get poor.
And a certain way to not earn the market return.

Do these appeal to you? If not, sell the stock tax efficiently and move on.

If you do have a preference to keep the stock, you need to figure out for yourself why exactly. And then you can accept the outcome of not earning the market return, however that may go. If it does better than the market, which of course it might, just don't think it's because you knew it would. You, and no one else today can know that it will.

Have you written an investment policy statement?
"So, what would have been so terrible if I had a small fortune?"

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by sport » Thu Jul 19, 2018 2:49 pm

I once read this advice:
"Don't fall in love with a stock, it won't love you back."

Cash is King
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Cash is King » Thu Jul 19, 2018 2:56 pm

harrington wrote:
Thu Jul 19, 2018 12:27 pm
It is an energy stock that my Dad has held as an employee and through retirement and reinvested the dividends. It generates about $35,000 per year in dividends. My brother has no interest in hanging on to his share so I will probably buy him out. Part of me wants to continue holding it to pass on to the next generation and part of me says to sell it and buy an index fund for more diversification. Thoughts?
OP,
Please don't get scared into selling this stock because others bring up Enron, Polaroid and GE. One size does not fit all when it comes to stocks. I think you need to do some homework to determine whether this utility stock dividend is one of the best combinations of safety and growth. If it is ,then you would be crazy to give up $35,000 annually for doing nothing. The other thing to consider is your behavior/investing personality. If you will loose sleep at night because the stock dropped 50% or the stock price is stagnant for a year ,then you should go with index funds.

aristotelian
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by aristotelian » Thu Jul 19, 2018 3:02 pm

One more question to ask yourself: if you got $1M cash today, would you buy this stock? If the answer is no, then you are likely holding the stock due to inertia and emotional attachment. Those are generally not good things to drive your investment strategy.

PhilosophyAndrew
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by PhilosophyAndrew » Thu Jul 19, 2018 3:04 pm

Cash is King wrote:
Thu Jul 19, 2018 2:56 pm
harrington wrote:
Thu Jul 19, 2018 12:27 pm
It is an energy stock that my Dad has held as an employee and through retirement and reinvested the dividends. It generates about $35,000 per year in dividends. My brother has no interest in hanging on to his share so I will probably buy him out. Part of me wants to continue holding it to pass on to the next generation and part of me says to sell it and buy an index fund for more diversification. Thoughts?
OP,
Please don't get scared into selling this stock because others bring up Enron, Polaroid and GE. One size does not fit all when it comes to stocks. I think you need to do some homework to determine whether this utility stock dividend is one of the best combinations of safety and growth. If it is ,then you would be crazy to give up $35,000 annually for doing nothing. The other thing to consider is your behavior/investing personality. If you will loose sleep at night because the stock dropped 50% or the stock price is stagnant for a year ,then you should go with index funds.
Can you cite examples of the safe growth stocks that yield at least 3.5% that you refer to? Or was your recommendation a general one not based on specific knowledge of such stocks?

Andy.

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Darth Xanadu » Thu Jul 19, 2018 3:07 pm

Cash is King wrote:
Thu Jul 19, 2018 2:56 pm
you would be crazy to give up $35,000 annually for doing nothing
I don't think anyone is suggesting he give up investment earnings. I think they are suggesting he gets and secures investment earnings in a less concentrated manner.
"A courageous teacher, failure is."

VaR
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by VaR » Thu Jul 19, 2018 3:09 pm

Besides agreeing with everyone else advising to sell and diversify now when there are no capital gains due to step-up basis, I'd like to observe that we get a fair number of people coming to the forum asking for advice on what to do when they have a concentrated position (usually with AAPL) with a fair amount of capital gains baked into the position. They'd like to sell in order to eliminate their concentrated position risk, but don't want to have to pay the capital gains tax.

Others ask for advice when they have an old active mutual fund position that has a high expense ratio. They no longer want to hold the position but don't want to have to pay capital gains.

I mention these cases because having a concentrated position means:
1. In the worst case, it will crash and you'll end up with nothing.
2. In the "best" case, it will become a problematic concentrated position and a tax burden.
3. In the neutral case (market perform), you will just be forced to bear lower risk-adjusted returns and lose the free lunch of diversification benefit.

Don't get hung up with "owning" a thing. There are probably far better ways of honoring your father's memory. Have you considered establishing a Donor Advised Fund in his name? Or my high school lets you fund college scholarships in a name of your choosing. Donating over a certain amount I'd get to put my father's name on the back of a seat in the auditorium. :)

Cash is King
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Cash is King » Thu Jul 19, 2018 3:12 pm

Darth Xanadu wrote:
Thu Jul 19, 2018 3:07 pm
Cash is King wrote:
Thu Jul 19, 2018 2:56 pm
you would be crazy to give up $35,000 annually for doing nothing
I don't think anyone is suggesting he give up investment earnings. I think they are suggesting he gets and secures investment earnings in a less concentrated manner.
Sure you are. Let's not automatically assume what he has is not a safe and secure investment.. In addition, this asset is throwing off $35,000 annually by doing nothing.

Cash is King
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Cash is King » Thu Jul 19, 2018 3:15 pm

PhilosophyAndrew wrote:
Thu Jul 19, 2018 3:04 pm
Cash is King wrote:
Thu Jul 19, 2018 2:56 pm
harrington wrote:
Thu Jul 19, 2018 12:27 pm
It is an energy stock that my Dad has held as an employee and through retirement and reinvested the dividends. It generates about $35,000 per year in dividends. My brother has no interest in hanging on to his share so I will probably buy him out. Part of me wants to continue holding it to pass on to the next generation and part of me says to sell it and buy an index fund for more diversification. Thoughts?
OP,
Please don't get scared into selling this stock because others bring up Enron, Polaroid and GE. One size does not fit all when it comes to stocks. I think you need to do some homework to determine whether this utility stock dividend is one of the best combinations of safety and growth. If it is ,then you would be crazy to give up $35,000 annually for doing nothing. The other thing to consider is your behavior/investing personality. If you will loose sleep at night because the stock dropped 50% or the stock price is stagnant for a year ,then you should go with index funds.
Can you cite examples of the safe growth stocks that yield at least 3.5% that you refer to? Or was your recommendation a general one not based on specific knowledge of such stocks?

Andy.
Andy,
I did not mention anything about a 3.5% yield. Did I miss something ?

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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Darth Xanadu » Thu Jul 19, 2018 3:16 pm

Cash is King wrote:
Thu Jul 19, 2018 3:12 pm
Darth Xanadu wrote:
Thu Jul 19, 2018 3:07 pm
Cash is King wrote:
Thu Jul 19, 2018 2:56 pm
you would be crazy to give up $35,000 annually for doing nothing
I don't think anyone is suggesting he give up investment earnings. I think they are suggesting he gets and secures investment earnings in a less concentrated manner.
Sure you are. Let's not automatically assume what he has is not a safe and secure investment.. In addition, this asset is throwing off $35,000 annually by doing nothing.
Sure I am what? I don't understand your response, and I'm not certain you understood mine.

The suggestions thus far have generally been to get out of a concentrated position. It's not like diversifying means he loses out on total return.
"A courageous teacher, failure is."

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BL
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by BL » Thu Jul 19, 2018 3:19 pm

Agree that selling immediately (keep a tiny amount if you must) with the step-up in basis makes the most sense. It is possible that your father felt he couldn't sell them because of Capital Gains taxes so he needed to keep it until step-up at his death, although he may have just simply wanted to own that stock.

Selling it makes sense even if you should decide to buy it back, because of the CG issue. Bogleheads generally prefer a portfolio of low-cost diversified funds and that would also be my recommendation.

Cash is King
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Cash is King » Thu Jul 19, 2018 3:21 pm

Darth Xanadu wrote:
Thu Jul 19, 2018 3:16 pm
Cash is King wrote:
Thu Jul 19, 2018 3:12 pm
Darth Xanadu wrote:
Thu Jul 19, 2018 3:07 pm
Cash is King wrote:
Thu Jul 19, 2018 2:56 pm
you would be crazy to give up $35,000 annually for doing nothing
I don't think anyone is suggesting he give up investment earnings. I think they are suggesting he gets and secures investment earnings in a less concentrated manner.
Sure you are. Let's not automatically assume what he has is not a safe and secure investment.. In addition, this asset is throwing off $35,000 annually by doing nothing.
Sure I am what? I don't understand your response, and I'm not certain you understood mine.

The suggestions thus far have generally been to get out of a concentrated position. It's not like diversifying means he loses out on total return.
I may have. I see giving up the $35,000 annually as a potential mistake. I don't disagree in being diversified but if this is a solid asset and the OP is comfortable owing an individual stock then he should run with it. If not, then go with index funds.

Cheers.

MrJones
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by MrJones » Thu Jul 19, 2018 3:39 pm

Feel free to keep it as play money as long as it's less than 5% of your portfolio. I.e., if you already have a well allocated $20M or more in assets.

livesoft
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by livesoft » Thu Jul 19, 2018 3:41 pm

Cash is King wrote:
Thu Jul 19, 2018 3:21 pm
I see giving up the $35,000 annually as a potential mistake.
I'm laughing because that assumes that a passively-managed low-expense-ratio diversified index fund portfolio won't pay out just as much or more annually.

I wish my index funds didn't pay out so much because I get taxed on those payouts in my taxable account.

Plus we all know about the Dividend Fallacy anyways.
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Cash is King
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by Cash is King » Thu Jul 19, 2018 3:48 pm

livesoft wrote:
Thu Jul 19, 2018 3:41 pm
Cash is King wrote:
Thu Jul 19, 2018 3:21 pm
I see giving up the $35,000 annually as a potential mistake.
I'm laughing because that assumes that a passively-managed low-expense-ratio diversified index fund portfolio won't pay out just as much or more annually.

I wish my index funds didn't pay out so much because I get taxed on those payouts in my taxable account.
Really ?? :oops: Good for you.

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knpstr
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Re: I'm about to inherit a single stock with a worth of just over 7 figures....

Post by knpstr » Thu Jul 19, 2018 3:54 pm

Cash is King wrote:
Thu Jul 19, 2018 3:21 pm
I see giving up the $35,000 annually as a potential mistake.
Almost any index fund will just as likely allow you to withdraw $35,000 a year on a $1M portfolio, its only a 3.5% withdrawal rate.

He wouldn't be giving up $35,000 annually. If they wanted that amount of income they could still have it.
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