To trim or not to trim?

Hi John,

A great question which is fluid by nature. Investors should always start by remembering the old adage, which works – “run your profits and cut your losses”. Hence rebalancing should always be considered but not be automatic. Its also worth noting it applies to averaging losers that become smaller parts of a portfolio as they fall, e.g. we added to Paladin (PDN) in July, a move that looks good so far.

If we consider our International Equities Portfolio there are some great examples with a 6% holding in Microsoft (MSFT US) +140% front and centre. However, holding this core position, initiated in early 2020, in one of our favourite US tech companies has contributed to the portfolio’s strong performance, up over 20% pa since inception in 2019.

We often scale in and out of positions, something we’ve done successfully with Sandfire (SFR) and Evolution (EVN) over the years, but these were largely planned when the positions were initiated, often easier with cyclical more active names.

However, to answer your question directly it depends on our view at the time but trimming often crosses our minds when want to de-risk portfolios as the strong performers often experience the most aggressive selling as investors and momentum traders run for the exits as one.

If we had a stock weighting at 15%, our inclintion would certainly be to trim it back – just prudent risk management irrespective of how good the company is – that can always change.

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Microsoft Corp (MSFT)

LAST UPDATED 26/09/2025 13:59

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Microsoft Corp (MSFT)

LAST UPDATED 26/09/2025 13:59