I inherited about $3 million in stock in my late husband’s company when he died. I have about $4 million in other assets. How do I incorporate this inheritance to stay diversified?

First, let me start by saying each situation should be evaluated in the context of the entire portfolio, your own unique ability, willingness and need to take risk, and the analysis should take into account tax and estate planning issues. That said, the right answer is highly likely to be to immediately sell the stock and diversify the concentrated and uncompensated risk you are taking.

Owning individual stocks is far more risky than owning the approximately 14,000 stocks a globally diversified portfolio can hold. In addition, your need for equity risk may be significantly reduced. Given that you have at least $7 million in financial assets, probably a significant portion should be in high-quality fixed income assets. To assist people in finding their optimal allocation, we perform an in-depth analysis through a process we call a Discovery Meeting. During this process, we learn what is important to you about your money and what goals you want to achieve, both financially and in life. The outcome of that process is a portfolio that gives you the best chance of achieving those goals with the least amount of risk.

This portion of Buckingham's Web site offers an interactive dialogue with Buckingham investment professionals and other personnel. It is important to recognize that many factors, including but not limited to time and changing market conditions, may cause such discussion to no longer be reflective of current thinking, positions or recommendations. Additionally, it is important to recognize that the information provided is for general educational purposes only and in no way is intended to viewed as, or a substitute for, personalized investment advice. Buckingham does not provide legal or tax advice you should consult with an investment professional, as well as legal and tax counsel regarding your specific financial circumstances.

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