Portfolio Clean-Up Before 2026
I hope you had a great vacation! It was nice for me to step away from the market and spend quality time with friends and family.
It’s surprising to think we’re approaching the end of 2025 already. The turning of the year is often a good opportunity to tidy up your portfolio.
Honestly, the market appears set to perform well next year, largely due to the “January effect.” This occurs when people start investing new funds into the market, whether from bonuses at work or New Year’s resolutions. It’s a trend that plays out almost every year.
One major factor behind this is that large fund managers typically rebalance their portfolios at the start of the year. They have specific performance targets to meet, which often leads them to favor top-performing stocks during this time.
Interestingly, the January effect tends to be more noticeable in small-cap stocks. Yet, keep in mind that its impact varies from year to year.
That said, share prices usually see an uptick in January, making it crucial to have your portfolio positioned to leverage this potential strength. That’s where my Stock Grader comes into play. Each week, it analyzes vast amounts of financial data, simplifying the results into a straightforward letter grade.
Today, I’d like to highlight ten stocks that you should think about selling before the year ends. According to the stock graders, these stocks have been flagged as particularly weak. Below are some that might surprise you.
| Symbol | Company Name | Quantitative Grade | Basic Grade | Overall Score |
| CLX | Clorox Company | F | D | F |
| DKNG | DraftKings, Inc. Class A | D | D | D |
| DKS | Dick’s Sporting Goods, Inc. | D | D | D |
| KMX | CarMax, Inc. | F | D | F |
| LOW | Lowe’s Companies, Inc. | D | D | D |
| Meta | Meta Platforms, Inc. | D | D | D |
| SBUX | Starbucks Corporation | D | D | D |
| SWK | Stanley Black & Decker, Inc. | D | D | D |
| TGT | Target Corporation | F | D | F |
| UHARU | U-Haul Holdings Company | F | D | F |
All these companies earned a “D” or “F” rating, which suggests it might be wise to remove them from your portfolio as we enter the new year. If you’re aiming to generate profit in the market, hanging onto these stocks won’t help.
The reality is, next year, stocks will largely depend on their own merits. In other words, strong fundamentals and revenue growth should stand out as key winners…
Consequently, I recommend using the last trading day of 2025 to ensure your portfolio is well-positioned with fundamentally solid stocks.
If you’re unsure where to find these kinds of stocks, my article on the Growth Investor service might help. It features two buy lists: High Growth Investments and Elite Dividend Payers, both filled with excellent stock options.
To fill your portfolio with high-caliber stocks, consider joining the Growth Investor today. You’ll gain immediate access to my buy lists, monthly issues, weekly updates, special market podcasts, and more.
Best,
