Get Ready To Give Your Investment Portfolio A Spring Cleaning


Spring is almost here — time to spruce up your house and get rid of your clutter.

But this year, don’t confine your spring cleaning to your home and yard. Why not freshen up your investment portfolio at the same time?

Of course, you can’t just take a mop and broom to your brokerage statement.

But some of the same principles that apply to your basic spring cleaning can work just as well when you tidy up your investments.

Consider the following suggestions:

• Take an inventory of your belongings

If you’re like most people, you’ve got some things lying around your house that have outlived their usefulness. It might be that lawn mower that died in 2004 or the toaster that warmed its last slice during the Clinton administration, but whatever it is, it’s beyond repair — and it should go.

And the same may be true of some of your investments. If one hasn’t performed the way you had hoped or no longer fits into your long-term goals, this might be a good time to speak with a financial adviser.

• Dispose of your duplicates

If you went through your house carefully, you might be surprised at how many items you have that do the same thing. Do you really need two colanders? And how many radios can you listen to at one time?

If you looked at your investment portfolio the same way, you might be surprised by some of the redundancies that pop up. For example, you may have several stocks issued by similar companies that make similar products. This might not be a concern when the stock market is booming, but it could be a definite problem if a downturn affects the industry to which these companies belong.

Always look for ways to diversify your holdings. While diversification, by itself, cannot guarantee a profit or protect against a loss, it may help reduce the effects of market volatility.

• Put things back in order

Over time, and almost before you’re aware of it, the spaces in your home can get out of balance. Perhaps you have too many chairs in one corner, or maybe your new desk takes up too much space in your home office. With some rearranging, however, you can get things back in order.

The same need for rearrangement may apply to your portfolio, which might have become unbalanced, with too much of one investment and too little of another. This situation could undermine your financial strategy, especially if the imbalance means you are taking on too much risk or, conversely, if your holdings have become too conservative to provide the growth you need. So, look for ways to restore your portfolio to its proper balance.

By giving your portfolio an annual spring cleaning, you can help make sure it’s up-to-date, suited to your needs and well-positioned to help you make progress toward your key financial goals. And you can do it all without going near a dust cloth.

Ross Hage is a licensed financial adviser with the firm of Edward Jones. For more information, call him at (928) 468-2281.


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