Stock prices and fund NAVs are up and this might well be the time to clean up your portfolio. If you have been investing for long enough, then it's inevitable that you have collected a lot of odds and ends that you have been doing your best to ignore. I bet your portfolio looks a little bit like the back corners of a cupboard that no one has emptied out for a long time. Don't worry; this happens even to the most organised and systematic of investors. When the markets were in spate for two years and you were feeling as happy and mellow as after having had a couple of drinks, you probably believed in some investment stories a little more than you should have.

Later, when many of these stories soured, you possibly started ignoring them. There were mutual funds that were at the top of the heap in 2006 and 2007 but lost far more than the general markets did during 2008. And certainly, there were many, many stocks of this kind. We often tend to write off such investments after they sink and look unrecoverable.And to be sure, many of them really are unrecoverable. However, now when the markets have reached a reasonable level, the situation demands some action. Those investments that had sunk too low to notice can now be divided into three types. There are those that were completely useless and have proven it by never recovering. There are those that have somehow recovered but aren't worth holding on to. And there are those that are good long-term investments and should be kept.

This is the time to do all that. However, do keep in mind that what I'm asking you to do is the second-best thing option. What we should really do is either never buy junk, or sell it off whenever we realise that it's junk. There's actually no sense in holding on to it because you don't want to book losses. One would be better off selling it when the markets are down and buying fundamentally better investments with the proceeds.Beyond selling junk, there is a deeper sense in which this is a good time to clean up your portfolio. And that's to rebalance it. You could be having a bunch of good investments and yet be too overweight on a particular sector or even company.

This is where Value Research can help you directly. Update your portfolio on ValueResearchOnline.com, making sure that you have entered all your investments. Now, click on the option called 'Analysis'. This will give you the most incisive view of your portfolio. You will get your exact exposure to every sector and every company. This analysis cuts across stocks that you have bought directly and those that have been bought by the mutual funds in which you have invested.

This may well tell you that you have unwittingly increased exposure to something. For example, over the last few weeks, you could have invested more in Bharti because you are bullish about its Africa foray. However, the fund managers of mutual funds in which you have invested could have done the same thing at the same time, leading to a sharply higher exposure to the Bharti stock as well as to the telecom sector without you realising it. No matter how big the headlines are about how Mr. Mittal is going to conquer the world, this overexposure is probably a bad idea.

This is just the right time do this kind of portfolio cleanup, with a little help from ValueResearchOnline.com.