Give Your Portfolio a Spring Cleaning

As the market evolves with the economy, it’s time to reevaluate and reorganize your investments. Consider our favorite actively managed funds.

- NELLIE S. HUANG

After several seasons of unpredictable market conditions, a spring cleaning can bring a sense of order to things. We're talking about your portfolio, of course. Moves you make now to ensure you hold the right mix of funds could be richly rewarding later. As renowned value investor Shelby Davis once said, "You make most of your money in the bear market. You just don't realize it at the time."

The past year was one for the record books, though it's also one that many would like to forget. Thanks to a wicked-fast succession of interest-rate hikes, bond markets have suffered historic losses. (Bond prices and interest rates move in opposite directions.) The broad bond benchmark, the Bloomberg U.S. Aggregate Bond index, turned in a 9.7% loss over the past 12 months. The rate hikes sent U.S. stocks into bear-market territory in 2022, although a sharp rally in recent months helped erase some of those losses: Over the past 12 months, the S&P 500 index declined 7.7%. Foreign shares, however, were a mixed bag. Stocks in developed countries, as measured by the MSCI EAFE index, dipped a mere 3.1% over the past 12 months; emerging-markets stocks lost a whopping 15.3%.

Through it all, our Kiplinger 25 funds mostly performed better than the broad-market benchmarks, albeit with losses. Our diversified U.S. stock funds lost 5.6% over the past year; our bond funds, 4.9%. Our foreign stock funds turned in a medley of results, and lost 10.6%, on average.