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You Should Do Regular Monthly Maintenance on Your Portfolio

This article will explain why you should do maintenance on your investment portfolio, and how often to do it. Then it shares how I personally do this and my recommendations if you want to do the same.

portfolio maintenance

Last month during the holidays, I spent some of the weekend at the mall for some Christmas shopping. People watching is fun, even when you’re in a hurry. Then I realized something.

Other than the obvious necessities: food, clothing, shelter; there’s necessities that keep us as human beings sane.

Think about what you did in the morning. At some point you probably brushed your teeth, took a shower, maybe had a cup of coffee, sat in traffic, etc. I’m willing to bet that many of the things you did this morning– you do the same way and in the same order every day.

Without knowing it, you rely on rituals like these to get you through the day. They keep us comfortable and give us a predictable result.

The same applies when you think about the reason for holidays. Forget the consumer-driven side for a moment and just imagine if we never had a holiday. How would we differentiate anything worthwhile? The weeks would just drag on into a never ending blur. This is why humans crave rituals.

Rituals give us a sense of belonging. It’s a shared human experience. Just like that feeling of the weekend starting or the bliss of falling asleep after a great day.

If you don’t have a ritual with your investing, you risk failure on a greater scale.

My investing ritual takes about 15 minutes a month. Near the beginning of the month, I simply open up the spreadsheet that tracks my portfolio and update the ticker prices. Any dividends that were paid this month are also added into a dividend column that contributes to the return %.

This ritual keeps me in a monitor state over my investments without having to fret everyday. I can just shut off the noise and re-evaluate things in a calm and quiet state. 

Any of you ever get the busy bug? When something is very important to you, we tend to fill up time to stay busy towards a goal.

With investing, this can be disastrous. Jumping in and out of positions and teeter tottering over a stock will just destroy your returns over time. It no longer becomes a sound financial plan; it is now a feeble attempt at timing the market.

Look, everybody’s ritual is going to be different. I’m sure we all brush our teeth and shower differently. But there’s also a great feeling in joining in a ritual as part of the human experience.

How to Do Portfolio Maintenance

Like regularly oiling your car, you want to keep an eye on what’s happening with your investments. Not to start worrying and fretting, and not to make any rash decisions. Instead just watching for anything that could be a big problem.

Kind of like when you listen for any out of the ordinary sounds coming out of your car. You may hear a noise that wasn’t there before. You don’t freak out. Simply check if it needs immediate attention. Then monitor it if not.

This is how I do it.

First I pull up my spreadsheet that I talked about above. Here’s a picture to show you what it looks like.

portfolio ex

I go over to trusty old Google, and enter the first ticker on my spreadsheet. In this case, that would be CW. I type into Google “CW dividend history”.

This will pull up a list of different websites that pretty much all do the same thing and give us the same data. I prefer looking for the NASDAQ.com version, and clicking on that. Then I look at their latest dividend payment. Did they pay a dividend in the last month? If yes, add that dividend to my dividend column. If no, move on to the next ticker.

While I have the NASDAQ website for my ticker pulled up, I also make sure to look at the latest stock price on there and add that to my spreadsheet under Curr. Price.

That’s pretty much it. I set up my Excel spreadsheet to automatically calculate the rest for me. You can use the “=” to create formulas that update immediately based on numbers you input. If you don’t have any Excel experience, I highly recommend learning how to write basic formulas for this.

Here’s what I do to calculate the ROI (return on investment). The letters and numbers represent each individual cell for the spreadsheet. So, G2’s formula is:

=((E2+F2)-D2)/(D2)

Notice that this formula also includes the dividends paid and adds them to our return. The impact of dividends paid on our return will by its nature increase over time, and the goal is that it will make substantial impacts in the decades to follow.

That last step before moving on to the next ticker is to pay attention to if the stock went up in price this month. Notice the trailing stop column off to the side. If this month’s price action caused to make the stock reach new highs, update the “High” column on your spreadsheet.

Again, the trailing stop column is automatically calculated by Excel. I implement a 25% trailing stop on my positions. You can do differently depending on loss tolerance. Here’s the formula for L2:

=M2*0.75

Basically, 0.75 represents 75%… or 100% – 25% of the most recent high.

You can now take these Excel formulas and make the exact same spreadsheet for yourself. I also like to use Yahoo Finance to set alerts on when my stocks hit their trailing stops. So, the last step is to update those alerts if any of my trailing stops have been updated. I don’t do all of them, only ones with significant increases. How meticulous you want to be with this is up to you. I really should do it every time, but I try to keep maintenance time at a minimum.

The last thing I want you to notice is the Dividend Fortress section. My goal with those stocks is different. I’m confident in their ability to increase their dividend consecutively based on their track record.

So I don’t attach trailing stops to these. These are stocks I want to hold even if they drop 50% or more in a bear market or crash. This is because I’m very confident in their ability to keep that dividend payment increasing to maintain their track record.

They are the absolute representation of long term investing– buy and hold. So, I weight them heavier in my portfolio and will only sell them on 3 conditions:

  1. A year of negative annual earnings
  2. A year of substantial debt increase
  3. A year where they cut the dividend

I add trailing stops to this portfolio in part because it’s a Roth IRA account. So, I don’t get penalized tax-wise for selling these investments for a gain. You may or may not want to follow this strategy.

This is the process I take every month to keep a watchful eye on my investments. I hope it was helpful.