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Investing Specialists

Dos and Don'ts for Combating Portfolio Sprawl

Is a portfolio cleanup on your 2015 to-do list? Advice on getting rid of the right stuff.

Americans continue to accumulate more toys, furniture, and knickknacks than they know what do with. For proof, look no further than the growth in the self-storage industry. Although the pace of growth may be modulating, self-storage rentals have been one of the fastest-growing pockets of the real estate industry over the past 40 years. There are now about 50,000 self-storage facilities in the U.S., and one in 10 Americans has resorted to storing possessions offsite.

Judging from the many portfolios I review during Morningstar's annual Portfolio Makeover Week, many investors have a similar glut of "stuff" in their portfolios. For every single portfolio I receive that's whippet-thin--without an excess stock, fund, or ETF to spare--I come across 10 more that have 50, 60, or even 100 individual holdings.

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