The Portfolio Comes First
Today’s portfolio review was a useful reminder that investing is not about defending your first decision.
We started the morning with what looked like a straightforward plan.
I had already reduced my exposure to the iShares Global Semiconductors ETF by half, and the initial idea was to exit the remaining position and redeploy the capital into two new companies: Kri-Kri and Nordex.
At first, the logic seemed sound.
Both companies would bring something different to the portfolio, while reducing semiconductor exposure appeared consistent with the diversification work already underway.
But once we stepped back and looked at the portfolio as a whole, the conclusion changed.
Selling the remaining semiconductor position would also reduce part of my exposure to the US dollar and Asia — precisely when I am trying to improve diversification not only by sector and geography, but also by currency.
The position had already been significantly reduced.
There was no compelling reason to eliminate it completely.
So the original plan changed.
The semiconductor ETF stayed in the portfolio.
Kri-Kri was postponed.
And Nordex became the only new position.
I eventually initiated a position in Nordex at €39.64 per share.
What mattered most was not the transaction itself, but the reasoning behind it.
An investment can look perfectly attractive on its own and still be the wrong decision when viewed in the context of the entire portfolio.
Changing your mind is not necessarily a sign of poor analysis.
Sometimes it simply means that you have asked a better question.
Instead of asking:
“Do I want to own this investment?”
the more useful question is:
“What does this decision do to my portfolio as a whole?”
That was the real lesson from today.
The portfolio comes first.