![]() Rather than scattering books here and there, keep them in the same place. Kondo urges people to store similar objects together in their homes to stay organized. Just make sure you wait more than 30 days, or the Internal Revenue Service won't let you write off the loss. What if you still think the stock can recover? You can always buy it back. If you have more than that in losses, you can carry them over until you use them up. Have more losses than gains in a tax year? That's even better: The capital losses can offset up to $3,000 a year in income. Selling stocks that aren't working can dampen the pain by generating capital losses to offset any realized gains. That's especially true if you own shares of companies that were delisted from an exchange. Still holding a bunch of losing stocks? It's likely time to part ways. This doesn't mean you need a load of new stocks - you can just as easily choose a handful of funds. companies, international companies, emerging markets, and real-estate investment trusts. stocks get rid of two of them and make sure you're diversified in other areas. You don't need three funds that track large U.S. Rather than getting hung up on the number, look at the types of investments you own. Thanks to low-cost funds that diversify you with a single trade, the number of investments you need is likely smaller still. Academic research regarding how many stocks you need to be diversified is all over the place, with most saying around 10 to 15 is more than enough. Consider that Berkshire Hathaway's $170 billion public portfolio holds just 15 primary investments. Don't tell yourself that your financial situation is so advanced you must own 50 stocks. But if your portfolio is filled with dozens of individual investments you've added over time without reevaluating, there's a good chance your strategy is unfocused. How many investments should you have? That really depends on your investment strategy. Is it filled with shares of dozens of companies in the same industry or with similar market values, funds that own the same types of investments, or losers that are unlikely to come back (or are completely worthless)? Do you simply have too many stocks - more than any one person can monitor? You might be a financial hoarder. Take a look at your entire financial picture. Below are some ways you can apply the current tidying-up trend to your investments. Just a few moments spent tidying and simplifying your portfolio can quickly pay off. A well-organized portfolio filled with carefully chosen investments held in proper accounts can boost results, lower costs, and help you stay focused on your long-term goals. In fact, I'd suggest that cleaning up a chaotic portfolio can be just as rewarding as organizing your home. "A dramatic reorganization of the home causes correspondingly dramatic changes in lifestyle and perspective," she writes in The Life-Changing Magic of Tidying Up. When cleaning your house, Kondo famously advises that you toss items that no longer spark joy for you.
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