Spring Cleaning for Your Shares Portfolio

One of the top promises of our Spring Cleaning series was that we would make sure to give you everyday information that you could put into action right away. Form getting out of debt to growing your money, we pledge to cover it all, no matter how long it takes.

You see, if you’re going to make sure that your portfolio is put into place, you will definitely need to look through it for shares that need to be dropped. The days of just holding onto a company forever are long gone. You need to already be looking at financial news to decide how to make your moves. You want to ensure that you’re not missing important details that could affect your portfolio’s performance. Of course, you also want to look at your long term investing strategy. if you’re trying to stay conservative, then your Spring Cleaning measures will be different than someone that wants to trade aggressively.

Thinking about how varied your portfolio is matters. You don’t want to have too many eggs in the proverbial basket here. This means that you need to have between 15 and 25 investments tied into different industries. This also includes bonds, international stocks and mutual funds. You also want to look at the expenses tied into your portfolio. If the expenses are running high, then that’s going to take away from your profits tremendously.

You also want to look into why you actually have each and every asset and share in your portfolio. Rebalancing isn’t about throwing everything away — it’s actually about looking at what’s really going to work for you and what isn’t going to work for you. Trying to figure out what will serve you the best isn’t always easy, but it’s really worth doing. You have to think about a wide variety of things when you’re looking at your portfolio.

It might hurt to sell a company’s shares, but it’s often necessary. If a company no longer fits your strategy, then it’s time to let it go. This can also be tied to the news — if a company cannot seem to turn a profit, it might be time to read the writing on the wall. Let them go and focus on companies that are profitable now. There is only so much speculation you can do before it really starts costing you big time money.

Your tax implications will also vary, and they’re outside the scope of this article. Consulting with a tax professional as you make changes is important. You don’t need to do so each and every time you move things around, but having a pro look over your general plan never hurts. Good luck!