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  1. #1
    Junior Member
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    Default Disinvestment strategy

    I have an inherited portfolio of shares and bonds (approx $600k) that I want to sell down to use for other purposes.

    I'm looking for some professional advice on a liquidation strategy - anyone have any recommendations for a good broker/adviser?

    Many thanks for your help.

  2. #2
    percy
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    Quote Originally Posted by DAF View Post
    I have an inherited portfolio of shares and bonds (approx $600k) that I want to sell down to use for other purposes.

    I'm looking for some professional advice on a liquidation strategy - anyone have any recommendations for a good broker/adviser?

    Many thanks for your help.
    Where are you based.?

  3. #3
    IMO
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    Simplest effective least risky way could be to sell a chosen number (eg 3000) every 3 days, week or fortnight or month etc so you average out, not selling at a top or a bottom taking into account pay dates for divs which may vary the quantity to sell ie cum or ex div depending on your situ..

  4. #4
    Legend peat's Avatar
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    if you don't want equity risk/reward you should sell out at least half pretty quickly I reckon. and then phase selling the second half out more slowly.
    If you did it too slowly - say you were selling 5% per month over 20 months you'd be pretty gutted if there a big fall during the next six months. And given the last quarter of 2018 that is now very much an increased possibility.
    Also going for broad stroke action such as selling half, you dont need to pay a broker for their input , you can do it online for low fees. I personally dont think full liquidation requires an overly complex strategy. obviously dont sell them all on one day and dont move the price around if a holding is quite large wrt daily volume. Try to sell into rising markets (eg now cf October-Dec) with limit prices on every sell order.
    Last edited by peat; 21-01-2019 at 07:36 PM.
    For clarity, nothing I say is advice....

  5. #5
    Membaa
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    If we can assume you know nothing about what you've inherited or how to manage it, get a broker like Craigs to liquidate your equities and bonds at the best price possible as quickly as possible. Do it and move on with your life.

  6. #6
    Junior Member
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    Quote Originally Posted by percy View Post
    Where are you based.?
    Wellington

  7. #7
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    Quote Originally Posted by Joshuatree View Post
    Simplest effective least risky way could be to sell a chosen number (eg 3000) every 3 days, week or fortnight or month etc so you average out, not selling at a top or a bottom taking into account pay dates for divs which may vary the quantity to sell ie cum or ex div depending on your situ..
    Thanks, Joshuatree - presume what you're suggesting is for each and every holding?

    Quote Originally Posted by peat View Post
    if you don't want equity risk/reward you should sell out at least half pretty quickly I reckon. and then phase selling the second half out more slowly.
    If you did it too slowly - say you were selling 5% per month over 20 months you'd be pretty gutted if there a big fall during the next six months. And given the last quarter of 2018 that is now very much an increased possibility.
    Also going for broad stroke action such as selling half, you dont need to pay a broker for their input , you can do it online for low fees. I personally dont think full liquidation requires an overly complex strategy. obviously dont sell them all on one day and dont move the price around if a holding is quite large wrt daily volume. Try to sell into rising markets (eg now cf October-Dec) with limit prices on every sell order.
    Thanks, Peat. Am I right in thinking you're suggesting something similar to Joshuatree, just with a big sell off immediately?
    Interesting you're both suggesting across the board selling rather than picking holding by holding...good food for thought.

  8. #8
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    Quote Originally Posted by Baa_Baa View Post
    If we can assume you know nothing about what you've inherited or how to manage it, get a broker like Craigs to liquidate your equities and bonds at the best price possible as quickly as possible. Do it and move on with your life.
    Wouldn't say I know nothing, but certainly not feeling confident enough to stock pick or get timing right. What value-add should I expect to get from Craigs?

  9. #9
    Guru
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    Auckland, , New Zealand.
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    To keep brokerage to a minimum you should use the online providers Direct Brokerage or ASB Securities and make sure the minimum sale is $15,000. That is with DB but may be slightly different with ASB with a different brokerage minimum. I have not used a full fee broker for 20 plus years so do not know what their rates are now but every 1% extra you pay is $6000 less in your hand.

  10. #10
    On the doghouse
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    Quote Originally Posted by DAF View Post
    I have an inherited portfolio of shares and bonds (approx $600k) that I want to sell down to use for other purposes.

    I'm looking for some professional advice on a liquidation strategy - anyone have any recommendations for a good broker/adviser?

    Many thanks for your help.
    Hi DAF,

    First my condolences for your loss, as I assume that being left that much it must be from a close relative. $600k is a substantial amount of money to deal with. I would have to ask the question do you really want to use it all for other purposes? If those 'other purposes' include paying off debts, including the house mortgage then I would say go for it. But $600k, or even $300k can be invested to provide a significant ongoing income, particularly if invested in the NZ sharemarket. If you are not comfortable with investing in the sharemarket yourself , you could get it professionally managed in a 'share market fund'.

    Brokers tend to favour a higher allocation to bonds in a balanced investment portfolio as you get older. If you are a younger generation to the person that left you the money, I would suggest liquidating the bond portfolio first. Many people do not appreciate that you can lose substantial capital on listed bonds. With interest rates low they are barely any less risky than shares at the moment IMO.

    SNOOPY
    Last edited by Snoopy; 22-01-2019 at 04:03 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

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