A Financial Spring Cleaning
Well, yes, I know that we are still in the grips of the Winter Witch (here in California, we are in year 3 of a drought, not to mention a heat wave the past week). But, it is the beginning of the new tax year, and therefore time to re-balance our (real) portfolio. C'mon, admit it: you do not do this yearly as you ought. OK, son, grab that gigantic trash bag and follow me to the garage.
Oh dear. Look at these 2 sad, broken toys tossed on the floor underneath this shelf. They are down 2/3 and 1/3 respectively. Into trash you go. What a shame.
What on earth are these 2 Rube Goldberg Contraptions doing on this shelf? They seem to have done well for themselves, up 1/3 and 100% respectively. Still, I would rather not have them. The trash for you guys.
BP, TKECY, HA, SIRI
Hey, lookee here: lottery tickets from last year's gambling spree. Let us see how we did. The TEPCO ticket is a winner, but the value is only 75% of what we paid for it. Trash. The BP ticket cost $1, and the winning spots are only worth $1. Trash. Whoa: it is yielding 4.6%. Take it out of the trash bag. Here, let me dust it off and give it a nice place on the lower bookshelf. Hey, multi-baggers: the only ones I see. Let us leave HA and SIRI on this shelf so we can let them ride.
FOOLX, BRKB, GURU, SPLV
Wow, look at these modern art sculptures: appealing montages of pretty things. No, son, leave them alone.
Hey, where are the bonds? What happened to the GNMAs and junk bond funds/ETFs? Oh, right, we got rid of them during last year's spring cleaning. The only one I see is HYS, which is barely 1% of the total portfolio. Someone my age should have 33% in such things. But, look at all these high dividend ETFs and funds. Oh, yeah, now I remember: the duration for bond funds and ETFs are too high and too risky, so we converted them to dividend producing funds and ETFs until the FED cries “uncle” and allows interest rates to normalize.
My prized possessions in this special display case have a nice, green light; last year the light bulbs were glowing red. No, son, I will not give you the key. Besides, they now have a 2% dividend.
Don't touch that shelf, son. This is the good stuff. See these? Explorer is a 3-bagger, and Windsor is a 2-bagger. Even the international funds are green.
WE ARE DONE
OK, son, take these empties to the recycling center and bring back the deposits. We will get something nice with the money.