Content provided by J.J. Schenkelberg, CLS Senior Portfolio Manager

My grandmother passed away this past May.  She was 91, and lived a very full life. Like many families dealing with the loss of a loved one, she left behind the family farm.  My grandfather and grandmother grew up very close to it, and my mother and aunt grew up on it.  Unfortunately, no one in the immediate family lives closer than three hours from the farm, so no one is likely to move back there.

My mother and aunt have struggled with the thought of letting it go.  However, their hand is beginning to be forced.  There was a report of someone running off an intruder several nights ago.  The farm has basically been vacant for a year and a half since my grandmother moved into an assisted living home.  It is not unusual for intruders and vandals to get into vacant country homes.  Other issues will also begin to crop up with a vacant home; the wood is beginning to rot in some places, the yard gets overgrown, potential plumbing issues in the winter, infestation, any number of issues.  Luckily, there is a close cousin who wants to purchase the home and take good care of it.

With our master manager program, we offer the option for clients to maintain holdings they have an emotional attachment to. We do our best to integrate the holding into the portfolio and optimize the portfolio for market conditions.  However, a holding such as this isn’t necessarily unlike the family farm.  The family farm will show its wear and tear in a very visible form.  A legacy holding may create higher concentration risk and bog down the portfolio, but this impact may not be as readily visible. This should really be a consideration when clients think about keeping a holding for sentimental reasons.  The emotions are understandably difficult to overcome.  But, at some point, honoring the integrity of the investment by diversifying for the sake of our loved ones may be the right way to go.





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