Yellowstone Financial, Inc.

Your portfolio needs pruning, too

With spring’s arrival in Boulder Valley, you may be out in your garden removing dead wood and pruning roses. Staring at a computer screen to cultivate your financial growth rarely happens when 70-degree weather beckons.

But it’s exactly what you must do, mutual fund company will have lower transaction costs, but you may be limited to just one fund family. Discount brokers allow you to manage stocks, bonds and funds all under one roof.

Most retirement plans have limited selections and higher fees than what are available on the financial marketplace. Once you leave your employer, you can roll your retirement account directly over to a traditional IRA with no tax consequences. There are select few employer plans that are so compelling that it makes sense to leave funds there. The federal government’s Thrift Savings Plan is a notable example.

For most of you, you should roll over your plan funds to an IRA. Instead of getting statements from six plans and financial institutions, you should be able to consolidate to one firm. Of course most likely you must keep your current employer retirement plan investments in place.

Think of it. If there are two of you, after pruning you will be getting just three statements: one from each of your employer plans and one from your chosen financial institution. With your accounts in fewer places, you’ll be better able to monitor and rebalance your investments.

You’ll save some trees too and be confident that your portfolio is not being left to the weeds.


The Laid Back portfolio continued its hot streak last quarter with a return of 7.42 percent, besting the previous quarter’s remarkable 6.89 percent. Rebalancing at the end of last year helped our performance as we shifted money from bonds into stocks. With the S&P 500 total return at 12.59 percent last quarter, this money worked harder for us. Rebalancing every year or so doesn’t always pay off, but studies demonstrate up to 1 percent superior annual return on average than portfolios that are left to inertia.