Is Your Portfolio in Need of Some Spring Cleaning, Too?

Changing of Season is Opportune Time to Evaluate Quarterly Performances



By Anthony Rhodes


So, you’ve lowered that thermometer, replaced those heavy bed coverings, and transitioned your wardrobe to be more reflective of the warmer climate…all sure signs that spring is on the horizon. And although you don’t look forward to the upcoming regiment of annualized “Spring Cleaning”, the habit of performing such activities is a sure reminder that winter is finally behind us, and that it’s time to begin preparing our households for the coming inevitability of seasonal change. 


In keeping with this spirit, how many of you will include your investments as a customary portion of your spring-cleaning affairs this year? Doesn’t their importance warrant inclusion within such duties, also? Or, are you one of the many who only check on your portfolio when the market takes a disastrous turn for the worst? This week, we’ll take a look at the prospect of using the changing of the seasons as a benchmark for evaluating the quarterly performances of our investments. And will offer some suggestions to remind that not only should our households be made ready for seasonal adjustments, but more importantly, our portfolios should, as well.

The Seasonal Forecast

Even if you are a long-term investor, it’s still a pretty good idea to assess your portfolio holdings on a quarterly basis. That’s because, although your positions may not change over a longer period of time, the allocation of your portfolio may have to shift, to be more reflective of the current economic environment. Remember that the circumstances, which dictated the outcome of last quarters’ winners, may not necessarily produce similar results for the same investments this time around. Due to the ongoing ebbs and flows of economic trends, certain sectors of the market will always outperform others, and the quarterly analysis of your portfolio should better prepare you to adjust for these conclusions. Your first step should be to find out just what the economic forecast for the incoming quarter is likely to be. This can be achieved by either talking to your financial advisor, or by reading various trade publications and Internet search sites. Once you gain a consensus opinion of exactly which sectors are poised for growth, focus on increasing your weightings towards those groups within your portfolio. And if such sectors are not represented within your overall allocation strategy, it might be a surefire sign, that you are not properly diversified.

A Breath of Fresh Air

When you don’t perform a quarterly review, you may find your portfolio to be lagging down with some stocks, whose better days have long since come and gone. Their consistent poor performance not only negates the successes of your past winners, but also siphons from the gains of your newer ones, as well. This is why it’s always good to inject some “fresh air” into your portfolio by conducting an assessment, at least quarterly. Keep in mind, that when certain segments of the economy are in decline, it could take months, or even years for them to recover. And if such sectors have representatives within your portfolio, your wait could be equally as long. This brief, periodic assessment will go a long way towards insuring that your portfolio remains free of such situations. By simply monitoring your investments, and adjusting your winners and losers, you begin each incoming quarter anew, without the draining influences of the past.

As we close the final chapter on yet another brutal American winter, our thoughts naturally center around the fun-filled prospects of the upcoming warmer seasons. With spring finally upon us, and summer, merely months away, it’s difficult for us to find interest in the mundane aspects of monitoring our investments, and taking the time to schedule such acts, equally as un-wanting. But before we get carried away with our blissful contemplations on the future, let’s not forget that it’s the preparations of the present, which makes such activities possible. And that a healthy, more profitable portfolio is a welcome addition to any changes the seasons will bring.

(Anthony Rhodes is a Registered Investment Advisor and owner of wealth management firm The Planning Perspective www.theplanningperspective.com)

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