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Colin OShea

August 14 , 2017

Investment Basics: Resolve To Clean Your Financial House


The beginning of a new year is a good time to get your financial life in order, including your investments. But how do you decide which investments are keepers and which you should dump?

Here are a few reasons to consider selling an investment.

Old Investment Doesn’t Match New Lifestyle

When you experience a major change in your life, you may find that your financial goals have changed as well. If you get married, have a baby, get divorced, or lose a loved one, review your investment strategy. You may find it’s too conservative or aggressive for your new stage of life. If an investment doesn’t fit in anymore, you may need to make some changes.

Too Many of the Same Thing

For your “investment house” to stay in order, you need to get rid of the clutter that accumulates over time. As some investments do well and others underperform, you may find that your portfolio has a higher percentage of one type of investment than you intended. Too many of one type of investment may mean that your portfolio is exposed to more — or less — risk than you intended. To regain order, you may need to clean out some investments.

Broken and Can’t Be Fixed

Sometimes a few simple repairs can add years to a household item. But then there are those things that just can’t be fixed and should be thrown out. If one of your investments has a short-term problem, you probably want to hang on to it to see if it will make a comeback.

But if an investment repeatedly underperforms its benchmark index, consider that a long-term problem that you probably shouldn’t try to repair.

Past the Expiration Date

If you are investing for a long-term goal, such as retirement, pay attention to your time frame. As your retirement date nears, investing for retirement becomes a short-term goal. If too much of your portfolio is still in stocks, you may be exposed to more risk than is appropriate for your now short time frame. Consider shifting some of your assets into less risky investments, such as fixed-income and cash equivalent securities. However, you should consider keeping some money in stocks so that your investments have the potential to stay ahead of inflation.

For any questions on your investment plan, contact a Security National Bank Wealth Management advisor below. 

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