Short and Long Term on Microsoft stock?

A friend was very lucky to inherit a very large number of shares of Microsoft stock (15,000 shares). She does not want to spend anything now, but does see the potential for just taking the income from this money to suplement her own income, maybe moving it to a mutual fund investment account.

She is getting conflicing advice....some advisors say sell the Microsoft, others say hold it for a while.

What's Microsoft going to do for the short term, next three months or so. Is there much risk?

I think Andy probably gave you your best advise. MSFT is not a stock that moves up and down a lot, so to hold onto it for another 3 months is probably not a big deal.....meaning at the worst it's likely to decline only $2 or so. However, over time I think it's going higher. they have a lot of things going for them, like Vista, Office, Xbox. Plus the dividend is nice!

But eventually your friend is going to want to diversify out of MSFT. When you sell it, you're going to have to check with a tax accountant to see what you're going to owe. Right now capital gains tax is at 15%, and that could possibly be going up in the next year or two, so keep that in mind.

If I were you then I would hold on to it.

Your friend should get a tax advisor to help her figure out the best way to sell off MSFT and put her money into the SPY. She likely has inherited the shares at the stepped up basis but still should check with a tax advisor.

The SPY (S&P 500 index) has 0.10% expense fees and will beat 80% of mutual funds.

I'm not knocking MSFT, one of the greatest companies of all time, but IF ~500k is most of her assets then she NEEDS to diversify down to a maximum of 20% for MSFT. Anytime you have a majority of assets in one stock you're risking a blow up - even with MSFT.

The bull case on MSFT is - What OS will your next computer be ? When the answer changes it is time to sell MSFT.

Edit - Just to counter on what is said below aka good spirited but wrong info below... ST versus LT gains can be very very tricky and the percentage you pay also depends on your tax bracket. Many people don't seem to know this... Your friend has enough of an asset base to hire a tax advisor and should do so.

i want to some money in future (share)but i want to hold it for a while .how many months i can roll over it

Hold onto the stock. There should be little to no risk if she wants to hold the stock several moths. In fact, the Fed will cut the interest rate in a few days so the stock should be going up.

if she would like to buy a house she can sell 10% of the stock.

i'd hold on to it, microsoft just reported a great quarter which lead them to their all time high from the past 4 -5 years.

more people are switching to vista, xbox is doing great, microsoft is very bullish right now i wouldn't sell it if i were you.

hold on to it and she will make more money.

but if she needs money now, it won't hurt to sell some.

ps. if MSFT goes above $40 before next earning release, i'd sell some to lock profit because above $40 would be overweight, then buy them back on pullback

also.. I would convert some of the position to VISA next year for its IPO, it will be huge, and once in a life time oppertunity. If she is interested consult a broker or fund manager to guide her how to play the VISA IPO 'properly'

Acording to yahoo microsoft has 32.45 / share. If my calculations are correct she has almost 500K. Id sell it all and buy bonds to suplement her income.

By the way i think your cute.