Follow Three Steps to Financial Health

The "objective support" portion of the review is even simpler. At regular intervals, you should compare a list of all the stocks in your portfolio with a list of your portfolio objectives. Check to ensure that each investment supports your primary investment objective.

For example, let's say you want income and stability, and you own utility American Electric Power (AEP Quote), REIT Boston Properties (BXP Quote), Bank of America (BAC Quote) and Dell (DELL Quote). You'd have an "objective support" issue. Three of the four stocks fit nicely, but Dell is an outlier, so you'd need to ask yourself why you own Dell and whether it fits in your portfolio.

The Investment Review

The final step of the process is the most involved but is in many ways the easiest because it's the most objective. It is driven by easily determined metrics, such as earnings, cash flow, debt, dividends and payout ratios.

It's also simple because it's an ongoing process. Another Cramer-ism fits nicely here: Be prepared to spend an hour a week on each investment you own. You'll need to spend this time reviewing your stocks, fundamental changes and news on both companies and their industries.

If you don't have that much time, you probably own too many companies. Staying on top of your individual investments is key to investment success.