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Spring Cleaning Tips for Your Investment Portfolio

Spring Cleaning Tips for Your Investment Portfolio
(Dollar Photo Club)

By Friday, 05 May 2017 02:59 PM Current | Bio | Archive

The following is an excerpt from a piece I wrote for InvestorPlace: 10 Spring Cleaning Tips for Your Portfolio

I don’t personally do a lot in the way of spring cleaning. It seems that my wife actually takes pleasure in digging through my closet and throwing away clothes that have outlived their usefulness, so I try my best to stay out of her way. But I do usually spend a few hours in the garage and attic going through junk we’ve accumulated over the past year.

What’s good for your household is also generally good for your portfolio. You should regularly tidy up your portfolio and your broader financial plan. You’d be surprised how much “junk” you can accumulate in a brokerage account.

You won’t want to get rid of it any more than you want to get rid of that old moth-eaten Texas Christian University Horned Frogs hoodie you wear during college football season. But frankly, getting rid of it is for your own good. Not only does holding on to portfolio junk tie up capital that can be better allocated elsewhere, it can also be a major distraction.

And frankly, like the moth-eaten hoodie, it’s downright bad for your self respect.

With that in mind, we’re going to look at 10 portfolio spring cleaning tips.


Rebalancing is an important spring cleaning chore, both among asset classes and among your individual stocks. I agree with the old trader’s maxim to “cut your losses short and let your winners run”.

But if a single stock has come to completely dominate your portfolio, you should probably consider scaling it back a little and reallocating. Otherwise, you run the risk that that single stock will take a wrecking ball to your portfolio should it unexpectedly hit a rough patch.

There is really no hard and fast rule on when a single stock position is too big for a portfolio. My basic rule of thumb is to keep my initial investments to just 3% to 5% of the portfolio. When a stock really has a nice run and starts to make up 10% of the portfolio or more, that’s when I start to scale back.

Every investor is a little different here, and there is no absolute threshold at which you should sell. Just try to be honest with yourself about the risk you’re taking, and do what seems best for you.

To read the rest of the article — and the 9 remaining spring cleaning tips — follow this link to the article.

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog.

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You’d be surprised how much “junk” you can accumulate in a brokerage account.
Spring, Cleaning, Tips, Investment, Portfolio, Stocks
Friday, 05 May 2017 02:59 PM
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