P&G Stock, and some Computershare

[Jill Carpenter]

Gonna be straight up with you and tell you I have no clue what I'm doing here.

 

Got a serious chunk of stock money getting distributed to me before the years end.

 

 

Something called "computershare" and some regular P&G stocks will be the cherry on top.

 

Before I just go hog wild and cash all this out, what questions do I need to be asking? what is it I need to know?

 

Do I keep some of this in stock form? Or cash it out and invest it elsewhere?

 

 

[whateverpedia]

Computershare is an Australian company that provides shareholder registry services in over 20 countries. It's listed on the Australian Securities Exchange (ASX), as well as the Nsadaq in the form of American Depositary Receipts (ADR).

 

Unfortunately I don't have time to elaborate on that too much as I have to go out for the day shortly.

 

Here's some info to tide you over in the meantime.

 

ASX Code - CPU

Nasdaq ADR code - CMSQY

 

https://en.wikipedia.org/wiki/Computershare

 

http://www.computershare.com/corporate

 

http://www.afr.com/personal-finance/can-computershare-rise-above-its-headwinds-20160501-gojowj

 

https://au.finance.yahoo.com/q?s=cpu.ax&ql=1

 

http://www.nasdaq.com/symbol/cmsqy/stock-chart

 

Back later.

[whateverpedia]

OK back now.

 

Not being in a hurry this time, I saw your question really was about whether you should hold on to them or cash them in.

 

Unfortunately, unless someone here holds a license to give financial advice, none of us can answer that for you.

 

You'll need to think about a few things.

 

1) How big is the portfolio? Is a it worth millions, or a few hundred dollars, or somewhere in between?

2) Do you need the money for other purposes?

3) Can you afford to do nothing, ie continue to hold them (tied in with question 2)

4) If you sell, how much (if any) are you likely to pay in capital gains tax? You'll probably need to consult an accountant for the answer on that one.

5) If you sell and decide to invest it elsewhere, where are you going to invest it?

 

I'm sorry, but legally, I can't answer questions 1, 2, 3 or 5 for you. Only a licensed financial adviser can do that, and only a qualified accountant can answer 4 for you.

 

By the sound of it though, you've just got "something for nothing", so holding onto them is an asset for you. You can use them as security for a loan to buy more investments, or any other purpose. It's all a positive for you.

 

If you decide to sell, even after you've paid taxes, it's all pure profit to you since your initial cost was zero.

 

If I were you, I'd hang on to them though. At least until you've learnt a bit more about how these things work. Remember though, I'm not a financial adviser so you should treat any "advice" I give you with the same amount of gravity that you'd treat someone on the internet who gives you legal advice.

[Jill Carpenter]

I realize none of this is legal advice and I'm all good with what ever ideas you can fling at me.   Those just give me a starting point of what I need to be looking at.

 

Perhaps there should be a sticky at the top of this particular area of the forum that reminds others that this is all speculation in here and none of what is discussed should be construed as legal advice.

 

I want you to feel free to spend this money for me (not literally ). I don't want to say how much it is but I can give you an idea in relation to personal perspective.

 

The stock portion that I've inherited in relation to my current spending habits is a considerable amount of money. I could skip doing any work at all for the next 10 years I'd say and sit on the couch every day eating bon bons and watching soap operas. But I already lived that dream before and so I'm onto new ones.

 

There is another chunk of assets that when liquidated will take care of any immediate cash flow concerns and plans for me are to go forward with buying a chunk of land and plopping my tiny house on it.

 

I plan to keep working.

 

If anything I fear I might have too much invested with those stocks and that maybe some portion of it needs to go into a maybe not as lucrative but safer place.

 

Hopefully that gives you enough information to put yourself in my shoes. How would you consider diversifying?

 

Pretend you are looking at a solid 10 years worth of your living expenses sitting in front of you, and your house is bought and paid for, your car is paid for. You have no other major overhead costs.

 

Are you going to consider holding that money and leaving it where it is or are you going to split up percentages of it to spread into other investments?

[whateverpedia]

OK that gives me a bit more of an idea of what you've got on your plate.

 

Let me introduce you to the idea of Exchange Traded Funds (ETF's), and a company called Vanguard (you've probably heard of them).

 

What is an ETF?

 

As the name implies, these are managed funds that are traded on the stock exchange(s). They are designed for people who don't have the skillset or time to manage a diversified portfolio on their own. There are a range of ETFs available covering various markets such as the US, European, Asian, Emerging markets. They're also available for specific industries such as healthcare, technology, finance, etc. You can also get ETFs which invest in the bondmarket and Real Estate Investment Trusts (REITs). A REIT is also a diversified portfolio of assets focussed on real estate (duh!).

 

Benefits - You get an instant diversified portfolio (don't put all your eggs in one basket!!!). The management fees are usually cheaper than traditional managed funds, and they can be easily bought and sold via an online broker. They pay dividends on a regular basis. Depending on the underlying assets of the fund, these dividends could be paid quarterly, half-yearly or annually. If you don't need the cash these dividends provide, you can reinvest them back into the fund. The benefit of this is similar to compound interest.

You receive a dividend payment for one quarter, and reinvest it. in other words you buy more units in the fund. When the next quarter rocks around, you have more units, so you receive a bigger dividend, which again buys more units, which earns a bigger dividend next quarter and so on. Please note that the amount of the dividends will fluctuate from quarter to quarter, and from year to year.

 

Pitfalls - because the funds are invested in various markets, they can be as volatile as the underlying markets. The price(s) can go up and down like a whore's drawers. They also slightly underperform the markets they invest in as well. Most of them track an index that covers those markets, such as the S&P500 for US stocks. This is because of the management fees. Say the S&P500 has a return of 10% in a given year. The return for the S&P500 ETF will generally be lower than that, say 9.5%. The difference is the fee that goes to the manager. This is why it's important to choose a manager with a solid track record over a long timeframe with a low fee structure.

 

With that, let me introduce you to Vanguard.

 

Vanguard has a solid track record of generating wealth for investors since the 1950s. They've survived the Cold War, the Cuban Missile Crisis, the oil shock of the 70's and the following stagflation, the 1987 crash, the dotcom boom and bust, 9/11, the banking meltdown of 2008, and will no doubt survive whatever the future holds.

 

They also have a diverse range of funds that cover a variety of different markets. By investing in a range of them you not only achieve diversification across various markets, you also get diversification within each fund.

 

Oh, yeah, Warren Buffet was once asked what investing advice he'd give to his grandchildren, he replied, "I'd tell them to put all their money in a Vanguard fund that tracks the S&P500". And as we all know, Warren is something of an expert in stockmarket investing. 

 

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Now, if I was in your shoes, I'd probably get funny looks from everyone.

 

Seriously though, I'd be investing in a diverse range of Vanguard's ETFs, reinvest the dividends, and get on with my life. When I'm ready to retire, I'd stop reinvesting the dividends and get them paid to me in cash. That'd be my retirement income stream.

 

Here's a list of ETFs that trade on the New York Stock Exchange - https://investor.vanguard.com/etf/list#/etf/asset-class/expenses-fees

 

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Before you do that though, I'd strongly suggest you do some reading on the topic, something along the line of "Investing For Dummies" (not an affiliate link) just to get you started. Then read as many other books as you can on the subject. That's how I got started some 20 odd years ago, and if I can do it, anyone can. 

 

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DISCLAIMER 1 -  Apart from the above mentioned book, none of what I posted is to be construed as investment advice. It is for informational purposes only.

 

DISCLAIMER 2 - Part of my portfolio is invested in ETFs managed by Vanguard's Australian branch and listed on the ASX. These cover Australian REITs, International (non AU) REITs, US stocks, European stocks, Asian stocks and Emerging Market stocks.

[Khemosabi]

Whatty!!  Thank you for suggesting this forum!  You gave Jill some solid advice!  I'm looking to get back into the stock market in the near future. 

 

This part of the forum, to me, is just friends talking about investing.  I did really, really well when I got involved before.  If I still had the stocks I invested in, I'd be a multi millionaire.  Due to other circumstances, we had to sell.  Life is a bitch that way.  Shit, I bought Amazon in the 20 dollar range.. yeah, I'm chocking on the "what ifs". 

 

While I still consider myself a wet rookie, I am decent at investing.  Now that I have made some huge decisions in my life, I'm looking forward to getting back to the things I love.

 

Keep the info coming Whatever! 

[Jill Carpenter]

Had my meeting today.

 

So, I have the first chunk - the one mentioned above that will be fluid by next week.

 

Have to take a chunk out to take care of upcoming events, but leaving the majority in place.

 

Edward Jones consultant advised me too that I should diversify and that makes sense. Another meeting planned for next week until I can muster in the investing for dummies.

 

Also got an extra amount I wasn't expecting that has to go into an IRA account.

 

CRACK AND WHORES! - well, I did think about that for a mere second, lol, but getting very proficient at screwing my head back on quickly these days.

 

DRINKING, GAMBLING, SMOKING, DRINKING, DRINKING, GAMBLING, SMOKING, WHORING, DRINKING  Whoa! Ok, got the screw back on again. lol

 

The "bump" I'm snorting now will be completely replaced by the probated funds arriving in more stocks by the end of the year.

 

I do want to set a time frame on getting the diversification thing going.