Analysis by the investment platform provider has revealed that January typically sees an increase in trading activity as Sippdeal investors get their portfolios into shape for the year ahead.
Around a quarter of Sippdeal investors have single share or fund holdings worth less than £500 within their portfolio and there was a 25% spike in sales of such lower value investments in January 2012, with a similar upturn expected this year.
A J Bell Marketing Director Billy Mackay said: “Many of us view January as the ideal time to detox our bodies. It seems investors view the same period as an ideal time to detoxify their investment portfolios by selling underperforming or unwanted investments and free-up capital for a fresh start in the New Year.”
Low-value investments can easily be overlooked in portfolios but if ignored could end up hurting performance. Often investors unintentionally acquire such holdings as a result of mergers, demergers or acquisitions involving companies in which they own shares. Or they simply might be low-value purchases that did not perform as expected.
Whatever the reason for being in a portfolio, Mackay says it is worth periodically reassessing the investment case for all holdings, large and small.
“It is a good idea to review portfolios every so often to ensure there is still a good argument for holding an investment. It is quite common for investors to have one or two low value holdings in funds or shares that have lost money or been almost forgotten about. It can often be better to sell such small holdings and put the money to work in a stock or fund in which you have conviction.
“We know that many people use the period after Christmas to the end of January to review their finances, particularly with the tax return deadline looming for many. It is clear that the New Year’s resolution of many investors is to tighten up their investment portfolios, not just their waistlines.”