€300k shares in Kerry plc. Should I sell some to pay off tracker?

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I have 3600 shares in kerry group which are really good at the moment up around 88 euro mark, I have 74000 euro tracker at 1.15 % left on my home worth about 250000 15 years left, we are a single income family with 4 kids it can be a bit tight at times, I do sell a few shares around Christmas to have a nice Christmas and to use up our tax allowance, no pension or any other investments. OH thinks we should pay off mortgage, all eggs in 1 basket that sort of thing but I am a big believer in kerry.your thoughts please thanks
 
There were people who were big believers in the banks in 2007.

The prudent approach would be to reduce your risk. Pay off the mortgage and diversify out of Kerry to some extent. You'd have extra disposable income without mortgage payments. Put some of that to a pension.
 
Thanks for your reply the problem I have is I purchased these shares and my home before I got married and had children and I haven't been able to put away money since, yes we will have the extra 400 a month if I do pay off mortgage but I know thats going to be swallowed up like the rest of it.
 
It depends on how much risk you are willing to take. It's not known how much profit would be made from selling all your shares but if it's substantially more than the ~74k left on mortgage then maybe prudent thing to do would be to clear mortgage and leave remaining shares in Kerry...it reduces the impact to you of a share drop significantly, but lets you benefit also if shares were to rise.
 
You have over €300k in shares and you say things are a bit tight.

I would be selling the shares pay off the mortgage and then if needs be selling some more so that things are not tight.

It sounds like you don't have enough income to meet your outgoings which you may need to address through budgeting so that you can put something away if that's what you want.
 
galwaypat said:
Thanks for your reply the problem I have is I purchased these shares and my home before I got married and had children and I haven't been able to put away money since, yes we will have the extra 400 a month if I do pay off mortgage but I know thats going to be swallowed up like the rest of it.
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If you lose your job and the shares tank you'll have a real problem. Personally I'd reduce the risk. And also as Joe_90 says take a look at your outgoings.

It sounds like you're hoping we'll see keep the shares. "They'll be at 100 euro in no time."
 
I would sell enough to pay off the mortgage anyway. Once upon a time I had 150k in bank shares :)
 
It's absolute madness to have 50% of your wealth and 100% of your portfolio in one share.

We don't allow speculation about shares on askaboutmoney, so I will make no comment on Kerry. But even if a company is a very good company, the share can be overpriced. So the company can continue to do well, and the share price halves.

I have shares in an excellent company Aryzta. They have halved in value since the top, although they are still well up on what I paid for them.

It's very hard to sell shares which have done very well for you. But you must.

Look at it another way. If you had a house worth €250k and a €74k mortgage and €300k in cash, would you invest it all in one share?

I recommend a portfolio of 10 shares and this is criticized as being too little diversified.

I think you should sell €270k worth of Kerry shares, even though you will probably have a CGT bill of €70k or so.

The decision to pay off the mortgage or not is very close. But the decision to sell off most of your shares is not.

Brendan
 
I've worked in banking most of my career. If I look back to 2007, I have friends who had very valuable share portfolios, and large mortgages. Most of them still have large mortgages...

I know paying CGT is tough, but the only way to avoid it is if they lose value, or you die.

And finally, if you didn't already have shares, would you borrow money now to buy them? Even at 1.5%. because effectively that's what you're doing.

Sell off some now, repay your mortgage, and invest leftover elsewhere to diversify and avoid dipping into it to cover living expenses.
 
Thanks for all the good advice not what I wanted to here of course, feels like jumping off a winning horse half way through the race, its probably the tax and the fact I will never get this lucky again thats holding me back from cashing in, its also called greed, I know what I have to do,
 
Pay off the mortgage. You then own the house and no matter what misfortune befalls you, no one can take it away.
 
- Sell virtually all of the shares but retain some (say 10%/€30k) so you still have some skin in the game

- Clear your mortgage

- Retain 6 months’ living costs in cash as an emergency fund

- Start a pension and funnel the remainder of the monies into it in the most tax efficient manner possible
 
I've never had someone complain about being debt free.

Good that you also recognise that the reluctance to sell is partly fuelled through greed. Don't let that get in the way of making good decisions for your family. If things are tight, an extra €400 a month will make a big difference.


Steven
www.bluewaterfp.ie
 
if it was me id sell all the shares and reinvest the proceeds in a broad based equity fund , your issue here is lack of diversification , not the level of debt you have , i would not pay off the mortgage , its very small and the interest rate is tiny , the dividend yield from most global equity funds is higher than the interest rate you are paying

id cash out of this particular share however , its done great for you , dont fall in love with any stock
 
Thanks again for all the feed back. What we have decided to do is sell 600 shares and thats my money back and than put 3000 shares back in the drawer and leave them there for 10 years, all going well should have house paid off than as well with a small over payment, I will be 56 than and hopefully in good health and we will access things again.
 
Dan Murray said:
Why do you say this?
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The downsides of pensions are only worth it if you are getting the full tax relief.

So anyone on 20% tax should save their money outside a pension scheme and then when they are paying 40% tax, they can run down their savings to contribute to the pension fund.
 
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