How to Clean Up Your Portfolio: A 7-Step Audit You Can Do This Weekend

Most portfolios don't fail from bad decisions. They accumulate. A fund here after reading an article, a stock there from a workplace plan, an old account at a bank you left in 2019, three ETFs that hold the same forty companies.

The result is a portfolio nobody designed. Here's how to fix it in one sitting.

Step 1: Put everything on one page

Every account. All of them.

TFSA, RRSP, FHSA, RESP, non-registered, workplace pension or 401(k), old accounts at former brokers, crypto, employer share purchase plans, that GIC you forgot about.

For each holding, write down: ticker, account, market value, and book value (what you paid — you'll need it for tax planning).

This step alone solves a surprising number of problems. People discover forgotten accounts, duplicate funds, and positions they don't remember buying. Our Portfolio & Net Worth tool will do the aggregation for you if you'd rather not use a spreadsheet.

Step 2: Calculate your actual asset mix

Add up what percentage of your total sits in stocks, bonds, cash and everything else.

Then compare it to what you think you own. The gap is usually large, and usually in the same direction: more stocks and more concentration than intended, because the winners grew.

If you decided on 70/30 in 2022 and never rebalanced, you're probably closer to 80/20 or 85/15 now. That's not a disaster. It is a decision you never actually made.

Step 3: Find the overlap

This is where most cleanups find the biggest mess.

Common overlaps in a Canadian portfolio:

• A TSX Composite fund + a TSX 60 fund + individual bank shares + a Canadian dividend ETF. All four are substantially the same five banks and a few pipelines.
• An S&P 500 fund + a total US market fund + a Nasdaq fund. The largest holdings are identical.
• A total world fund + a separate S&P 500 fund. You've just doubled your US weight without deciding to.
• An emerging markets fund + an Asia fund + a China fund.

How to check: open each fund's page and read the top ten holdings. If two funds share most of their top ten, you own one bet in two wrappers, paying two sets of fees.

Overlap isn't automatically wrong — deliberately overweighting the US is a legitimate choice. It's wrong when it's accidental, because then your actual exposure isn't what you believe it is.

While you're there, check your country and sector concentration. A lot of investors are far more exposed to a handful of technology and semiconductor names than they realise, across their US fund, their global fund and their emerging-market fund simultaneously. We wrote about the US version of this problem and, this week, the Korean version, where two chip companies are roughly 47% of the national index.

Step 4: Find the accidental single-stock bets

Add up every route you own a single company: direct shares, employer stock plan, and its weight inside your index funds.

Then ask: if this one company fell 50% tomorrow, what happens to me?

The uncomfortable case is employer stock. If a large share of your net worth is in the company that also pays your salary, your income and your investments fail together. That is the one concentration risk worth acting on quickly, even at a tax cost.

Step 5: Check what your cash is doing

Two problems live here.

Cash drag. Money sitting uninvested in a brokerage account is often earning very little. Many brokers pay near zero on uninvested balances by default. If you have five figures sitting idle, find out exactly what rate you're getting — and whether the broker has a cash sweep option or high-interest product you need to opt into.

Undecided cash. Money you meant to invest six months ago and didn't is a decision you've made by default. Either invest it on a schedule or move it somewhere it earns properly. Sitting in between is the worst of both.

Step 6: Audit what you're paying

• Fund fees (MERs). A 0.03% index fund and a 1.00% mutual fund holding roughly the same thing compound into a very large difference over decades. Our expense ratio explainer shows the math.
• Account fees. Quarterly administration fees, USD account fees, inactivity fees.
• FX costs. For Canadians buying US-listed securities, the currency spread is often the biggest fee you pay and it never appears on a statement as a fee.
• Advisor fees, if any, and what you receive for them.

Step 7: Make changes — in the right order

This is where a cleanup can cost you money if you're careless.

Rule 1: sell inside registered accounts first. Selling inside a TFSA or RRSP has no tax consequence. If you need to reduce an overweight position, do as much of it as possible inside registered accounts.

Rule 2: in taxable accounts, check the tax bill before you sell. A 25-year-old holding with a large embedded gain may be better trimmed slowly, or offset against losses elsewhere. Tax-loss harvesting can help — see our capital gains guide.

Rule 3: redirect new money instead of selling. The gentlest fix. If you're overweight US equities, buy something else with your next twelve contributions rather than selling anything at all.

Rule 4: don't rebuild from scratch. The goal is a portfolio you can explain in three sentences, not a perfect one. Two or three broad funds plus your registered accounts is a finished portfolio for most people.

The finished product

You should end with:

• One page listing every account
• A stated target asset mix you actually chose
• No accidental duplication
• No single position that would be catastrophic on its own
• Cash earning something
• Fees you've verified rather than assumed
• A written note of why you own each thing

That last one is the most valuable. In the next selloff, the difference between selling in a panic and doing nothing is usually whether you can remember why you bought it.

Frequently asked questions