Now is the perfect time to review your portfolio for the year. We have a canvas for you to use and leave nothing aside.
You’ll Learn
- While Mike often says we should monitor our holdings quarterly, he recommends acting yearly. Why is that?
- The markets have been performing strongly overall this year. An investor’s sector allocation can explain some of the results. Do you also compare your returns to a benchmark before starting your review?
- At Dividend Stocks Rock, we have a PRO Dashboard that makes all the steps we will discuss today available at a glance. However, you can find much of the information in your brokerage account. Let’s first start with the asset and sector allocation review. Mike explains why you should use a global view of all your accounts.
- And what do you aim for regarding your sector allocation?
- Then, examine your stock allocation, focusing on the largest and smallest positions.
- As the third step, proceed to a ratings review. At DSR, we rate all stocks from 1 to 5, but investors can also do it alone. What value does a rating system bring?
- What type of rating change is a red flag?
- If you have completed your quarterly reviews and taken notes, it is time to revisit them and determine whether stocks should be sold.
- In which order will you select stocks to sell?
- When selling stocks during your yearly review, will you start by reallocating the proceeds to existing positions or go for new holdings? How do you determine where to start?
- It’s important to mention that we didn’t consider the price of our stocks in this yearly review. The price of a stock is not a reason to buy or sell. Mike gives this principle more thought.
- What happens if you don’t feel confident about your portfolio during your yearly review? Is it more a matter of confidence in the stocks, strategy, or maybe both? How do you make a difference?
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This podcast episode has been provided by Dividend Stocks Rock.
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