MATZA AND YOUR PORTFOLIO
So I got the ‘memo’ from my wife that we are starting Passover cleaning tomorrow and I need to clean up the bedroom. I am not into wearing gloves when I clean, as I measure success in cleaning by the number of cuts and scratches on my hands and not necessary actual cleanliness! While having no chametz in the home is one command another obligation of the holiday is to eat Matza. There are many differences between Chametz and Matza but I’d like to focus on one.
According to Chassidic tradition as written by Lchaim, “bread and chametz symbolize the egotism and haughtiness within each of us. Chametz puffs up like a haughty person’s chest, swells like an egotistical person’s head. Matza, on the other hand, is flat, low, humble. Even the fact that its flavor is bland, nearly tasteless, attests to its modesty.
Before Passover, when we are checking cracks and corners, looking behind bookcases and inside briefcases for chametz, we are laboring at a job that doesn’t require much thought. That gives us plenty of time to be introspective about whether we’ve been behaving like chametz or matza for the past year. And if we find that we are full of chametz, then pre-Passover cleaning time is the perfect opportunity to check the cracks and corners of our own personalities and dig out these dreadful traits.”
An element of only eating Matza is for us to get back to basics, and to create a proper structure for us to grow as human beings, without any of the extra trappings symbolized by bread.
Order
Since I am writing on the business page I will now transition to investing. Clean up your portfolio and get back to basics. Investors should use this time of the year to clean up messy portfolios. In fact it is probably more important than cleaning your windows—where there is no chametz!
You need to create a financial plan, and start understanding what your short-long term needs and goals are. You can speak to a financial advisor to help you define those goals and needs. When creating the long-term plan, it’s important to also take into account future expenses. For example, the purchase of a car in 5 years, marrying off children in 8,10, and 12 years, is all relevant information necessary for the advisor to give you an accurate picture of what you need to do in order for you to be able to meet these future expenses.
Once you have defined your goals, it’s time to look at your portfolio. Have you skewed from your optimal asset allocation? Is your portfolio a hodgepodge of random stocks that were bought on a whim, but with no underlying strategy? Do you own stocks that you won’t sell because you are “waiting for them to go up to where you bought them?”
The world is always in a state of change. Investors should take the time to make sure that their portfolios are well positioned for current conditions. Be smart about your investments. Pick a strategy and stick with it. Owning random stocks with no strategy is a recipe for disaster, and even though you may have emotional reasons to hold onto certain positions, now is the time to put emotions aside and be more rational. Asset-allocation is the best way for most investors to grow wealth. As I wrote about last week, one of the most overlooked aspects in long-term investing is the need to rebalance a portfolio. Rebalancing is important for two main reasons. First of all, it keeps your portfolio in tune with your long-term goals and second, it keeps your asset allocation in line with your risk level.
Now is the time to get back to basics.
Happy cleaning and have a Chag Kasher V’sameach.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995, visit www.gpsinvestor.com or email: aaron@lighthousecapital.co.il.
