When you don’t want to manage your money

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Q. My wife and I each inherited stock portfolios a few years ago. We have watched them bounce up and down with the market. Neither of us know how, or wish to spend the time and energy learning to manage these stocks. Should we just sell them off and put the money elsewhere?
— Unsure

A. It seems you’ve answered your own question.

If you don’t want to spend the time or energy managing the stock portfolio you inherited, it might be time to hire a financial professional to review the portfolio you have inherited.

A financial professional can address issues such as individual stock concentration, whether the holdings have embedded capital gains or losses, your time horizon and risk tolerance, and how these stocks fits into your overall asset allocation, said Michael Maye, a certified financial planner and certified public accountant with MJM Financial in Gillette.

Plus, he said, an advisor can review your goals and design an appropriate portfolio.

“By working with someone, you will understand the risk level of your current asset allocation, tax implications of divesting any current investment holdings, as well as have a portfolio designed for you that reflects your risk tolerance/goals,” Maye said.

Read this to learn about how financial advisors are paid, and see more about the process here.

As an advisor, Maye said, he prefers client portfolios that own diversified investment vehicles such as mutual funds or Exchange Traded Funds (ETFs).

“This removes being exposed to a catastrophic event that impacts just one individual stock i.e. PG&E, Enron, Lehman Brothers,” he said.

To find a financial professional to work with, Maye recommends you start your search with these organizations:
The Certified Financial Planner Board of Standards
Financial Planning Association
National Association of Personal Financial Advisors

You can also check out some advisors who support NJMoneyHelp.com here.

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