What should I do with inherited stocks

Money blog -

Keep or repel? Depending on the quality, inherited stocks can be a good retirement plan. Photo: iStock

I have the option of taking over shares from an inheritance. Your advice would be very valuable to me. I've never had to deal with stocks, I'm not that young anymore, and I have a daughter. Which stocks would you keep and which would you rather sell? I really appreciate your neutral advice. D.R.

I've looked at the list of stocks you sent me. My conclusion: you are in luck - the person from whom you may inherit had a good hand when it comes to selecting stocks.

I understand from your information that the portfolio contains titles from Givaudan, LafargeHolcim, Lonza, Nestlé, Novartis, Roche, Swiss Re, Swisscom and Swatch Group. These are all stocks that are included in the Swiss Market Index - the Swiss Blue Chip Index - and are quality stocks.

All SMI stocks listed in the portfolio also have the pleasant advantage that they have a high dividend yield. Depending on the paper, you can achieve a dividend yield of two to six percent. These are returns that, given the record-low interest rates, for example when investing in Swiss franc bonds, one can only dream of.

The disadvantage is that you always have to expect stronger fluctuations with stocks like these. Since you are writing to me that you have never dealt with stocks before, you have to bear in mind that these papers can fluctuate significantly. We are currently in a very positive year for the stock market so far. But that can change very soon and prices will plummet. You need good nerves so that you don't get nervous.

Since, in my opinion, these are all good stocks that you could inherit, I would keep them - provided you don't need the money and can live with the fluctuations mentioned - with a long investment horizon. On the one hand, they are a good retirement provision for yourself, because thanks to the attractive dividend yields they bring a nice, albeit never entirely guaranteed, annual return and improve your future retirement. On the other hand, the shares would also be a good basis for future long-term retirement provision for your daughter.

Of course, you could now realize price gains on the sharp rise in securities, but then you would have to reinvest the money later, which is not that easy. In my opinion, you will not find much better papers. Even if the stocks have already risen sharply this year, I would keep the stocks with an investment horizon of ten or more years and enjoy the considerable dividends.

From the custody account you sent me, I can see that the portfolio also contains shares in the ZKB Gold ETF and the LGT GIM Growth Fund as well as structured products issued by Bank Vontobel. The latter are not broken down further. Therefore, I advise you to clarify exactly what kind of products it is. In case of doubt, I would not do this, especially since you write to me that you are not familiar with financial instruments and that you have no experience in investing. The LGT GIM Growth Fund is a broadly diversified mixed fund, but in my opinion it is not cheap on the whole. So I wouldn't keep this one either.

I would definitely keep the shares in the ZKB Gold ETF: This good product, which is cheap in terms of fees, is a hedge for you in times of crisis. In the event of a crash, which is always possible, and your shares plummet, this gold exchange traded fund ETF would go up sharply in the course of a rise in the price of gold.

The only critical thing to note about the portfolio is that, apart from gold, the undefined structured products and the fund, you have a strong focus on Switzerland and that the diversification, e.g. on other markets and asset classes, is insufficient. I advise you to look at this aspect together with your house bank and, depending on your personal risk capacity and your needs, to further improve the diversification.