Understanding Turnover: When, Why, and How to Adjust Your Portfolio

Tending the Garden

There’s a rhythm to updating a portfolio—one I didn’t recognize in the early years, when every change felt like a small crisis. Back then, replacing a stock meant something had gone wrong, like I had chosen poorly or missed a warning sign. But over time, I’ve realized that turnover isn’t a judgment. It’s a natural part of a living, breathing investment process.

A portfolio is not a stone monument. It is a garden. And gardens need tending.

My son asked me recently why stocks move in and out of the Lunar Landing Portfolio, often week to week. There was a worry in his voice, the quiet fear that change meant instability. I remember feeling that same anxiety once—the belief that if a stock left the list, it must have failed, or worse, I must have. But the truth is gentler than that.

Turnover isn’t about failure.
Turnover is about alignment.

Markets shift. Companies evolve. Performance waxes and wanes. And the criteria I use—the five-year returns, the rolling-year windows, the drawdowns—are always recalculating, always catching new patterns, always adjusting to the movement of the world. When a stock leaves the list, it usually means another has risen to meet the criteria more strongly. That’s all. It’s not a condemnation; it’s a recalibration.

I told my son that turnover becomes a problem only when we treat it as something urgent or absolute. But if we approach it with patience, turnover becomes nothing more than a quiet invitation to reconsider our holdings.

Should we adjust immediately?
Not always.
Sometimes not at all.

A stock exiting the list is simply information. It tells us the metrics have shifted—but it doesn’t tell us how quickly we must act. Some investors choose to mirror the list exactly, shifting every time the criteria shift. Others move slowly, easing into the new selections over weeks or months. Both approaches are valid, as long as they are intentional.

The mistake is reacting from fear.

Fear rushes us.
Fear pushes us to sell before we understand.
Fear convinces us that the list is a mandate rather than a guide.

But turnover, when viewed from a place of steadiness, becomes an opportunity. It asks, “Does this stock still serve your portfolio’s goals? Does its story still align with who you are as an investor?” Sometimes the answer is yes, even if the metrics have softened. Other times the answer is no, and the turnover simply illuminates the truth we already sensed but hadn’t acknowledged.

What I’ve learned is that portfolios evolve in the same way people do—gradually, unevenly, through moments of clarity followed by stretches of uncertainty. And just as we don’t transform overnight, neither should our portfolios.

Turnover is a reminder that investing is a long conversation, not a series of urgent commands.

I explained to my son that adjusting a portfolio should feel like a slow exhale, not a gasp. You can transition out of a stock over time, letting the position unwind naturally. Or you can wait for a clearer signal before moving at all. What matters is not the speed of the adjustment, but the clarity behind it.

Sometimes turnover reveals new opportunities—companies that bring stability, lower volatility, or stronger long-term performance. Other times it simply helps us recognize when a once-strong company is drifting from the path we want to follow.

But in all cases, turnover invites reflection.
What do I value?
What am I trying to build?
What pace of change feels honest to me?

When I finished talking, I saw something shift in my son. The tension softened. Turnover no longer looked like a threat, but a natural part of tending to something alive.

In the end, adjusting a portfolio isn’t about chasing the perfect lineup.
It’s about honoring the evolution of your strategy, your understanding, and your own inner steadiness.

Turnover is not a disruption.
It is a gentle reminder that everything—markets, companies, investors—changes with time.
And when we learn to move with that change rather than fear it, our portfolios become reflections not of reaction, but of wisdom.