In September (in Michigan, anyway), we’ll be shaken from our summer slumber to the sight of children lugging their new backpacks down to the bus. Their work begins again, but the adults aren’t off the hook.
Members of BetterInvesting Magazine’s Editorial Advisory and Securities Review Committee suggest that this is the time of year for getting back to basics with investing, beginning with a look at your portfolio. Many investors take the summer off from actively managing their portfolio. There’s even a Wall Street saying — “Sell in May and stay away” — that suggests there’s wisdom in taking a summer break.
We don’t suggest that to be the best course of action, but if you do tend to take the summer off, September is an excellent time to undertake four tasks. First, reacquaint yourself with BetterInvesting’s principles and methodology. Participate in one of our volunteer-led webinars, go to an in-person class (if you’re in Houston, there’s always the BetterInvesting National Convention in September) or look over some First Cut stock studies.
Second, complete some Stock Selection Guides for your stocks and stocks on your watch list. Study the recent trends in your holdings and consider replacements if you’re seeing fundamentals deteriorate.
Third, study the portfolio to make sure you’re meeting diversification targets and don’t have allocations that are out of whack. Stocks don’t necessarily take a vacation over the summer. Sometimes movements can be enough that you’ll find yourself overweighted or underweighted in a particular stock.
Fourth, begin studying portfolio actions you’ll take in response to tax laws. This year investing is more of a political football than in most elections, so you’ll want to follow the issues carefully.
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was borne out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks and mutual funds, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at www.betterinvesting.org or call toll free (877) 275-6242.
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