Opinion: Spring cleaning your investment portfolio

George Timson

Spring is a time for renewal, a chance to declutter and refresh. This principle applies not just to our homes, but also to our investment portfolios. Just as we shed unnecessary items during spring cleaning, we should also reassess our investments, pruning where needed and planting seeds for future growth. The market landscape is constantly shifting, and 2025 presents some interesting trends that warrant a closer look.

One sector that has seen significant gains recently is the financial sector. With the current presidential administration signaling a rollback of regulations, banks and other financial institutions have thrived. This surge, however, may present an opportune time for shareholders to consider trimming profits. While the sector may continue to perform well, it’s wise to remember the principle of buy low, sell high. Taking some profits off the table after a substantial run-up can help diversify your portfolio and mitigate potential future losses. It’s like harvesting a ripe crop – you don’t want to leave it all on the vine to rot.

Technology companies continue to dominate the news and innovate at a stunning pace. It is important to remember even the most revolutionary technologies need time to mature and deliver on their promises. Diversify, diversify, diversify! Don’t put all your eggs in one Silicon Valley basket, especially if that basket is being carried by a robot that’s still in beta testing.

Benefitting from the technology trends, another area experiencing a surge is the utility sector. Investor speculation about increased power demand due to the rise of artificial intelligence and quantum computing has fueled this growth. While the long-term potential is undeniable, it’s crucial to evaluate whether the market is getting ahead of its skis. A cautious approach may involve selectively trimming positions that have seen the most dramatic price increases, while maintaining a core holding for potential long-term benefits.

Conversely, the materials sector has faced some headwinds in recent months. Concerns about slowing global growth, particularly in China, a major consumer of raw materials, have dampened investor enthusiasm. This period of relative weakness could present an interesting opportunity for long-term investors. Infrastructure spending in various parts of the world, while perhaps slower than initially anticipated, is still expected to continue. Considering the cyclical nature of markets, and the potential long-term demand drivers for materials, now may be a good time to selectively and incrementally deploy capital towards this sector.

History has shown investing in areas of the market that are under pressure can often be rewarding to those who are patient enough to weather the factors causing the headwinds.

The market is a fickle beast. It’s influenced by a million different factors, from global events and economic data to the collective mood of investors (which, let’s face it, can change on a dime). So, while predicting the market is a fool’s errand, monitoring it isn’t. Having a disciplined approach to investing is key. This means setting clear financial goals, understanding your risk tolerance and regularly reviewing your portfolio so you’re able to respond as the market evolves.

Spring cleaning your investment portfolio is not a one-time event; it’s an ongoing process, a continuous cycle of assessment and adjustment. Regularly examining your holdings, identifying trends (and distinguishing them from fleeting fads) and adapting to changing market conditions are crucial for long-term investment success.

Think of it like packing for a trip. You wouldn’t go to the beach in your snow boots, and you wouldn’t go skiing in your flip-flops. Similarly, you shouldn’t have a portfolio that’s completely mismatched to the current economic climate. It’s about aligning your investments with your long-term financial goals and your risk tolerance.

Just as a well-maintained garden yields abundant harvests, a well-managed investment portfolio, carefully cultivated and tended, can help you cultivate your capital and achieve your financial aspirations.

George Timson is a wealth management adviser at SignalPoint Asset Management in Springfield. He can be reached at gtimson@signalpointinvest.com.