“Well, that’s fitting as everything is always 50% off at Sears” dead-panned my husband when I told him that I sold my Sears bond for half of its face value.

I had been holding an unsecured note for three years, long before Sears filed for bankruptcy.  Unbeknownst to me, my bond had moved into default status and so I decided to sell it straight away rather than wait to see how much I would eventually get for it. Estimates ranged from 30-60 cents for each dollar of face-value, so I feel lucky to have received 50% without waiting.

As a financial advisor, you might be surprised to hear that I was even holding a Sears bond. As with the notorious cobbler with holes in his shoes, I was too busy focusing on clients’ finances and portfolios to pay attention to my own. It’s a cautionary tale.

When my father passed away three years ago he left his estate in equal parts to me and my brothers. Among his investments was the aforementioned Sears bond. I acted prudently at first, immediately selling the expensive mutual funds and individual stock holdings and reinvesting the proceeds in diversified low-cost ETFs. At the time, I made a conscious decision to hang on to the individual bonds as they were high yielding.

Unfortunately, I never reconsidered my bond positions, not even during my annual rebalance. Sadly, there was a Sears only two miles from my house which I drove by regularly as it declined. One would think that when the store closed and the building was torn down I would have said to myself, “Maybe I should look at that Sears bond.” I didn’t. Nor did I question my holding when the Sears bankruptcy news because a regular feature on my Twitter feed. When I finally paid attention to it, I had lost half of my investment.

Here are three lessons (that I frequently teach clients) to be gleaned from my unfortunate experience:

1.  Don’t set it and forget it—with individual holdings. I do preach a set it and forget it approach to investments with regular rebalancing. However,  do not hold individual stocks and bonds in your portfolio if you do not intend to follow and monitor them vigilantly.

2. Don’t gamble more than you can afford to lose.  Owning an individual stock or bond position is a gamble. I recommend holding predominantly diversified low-cost mutual funds or ETFs. Fortunately, my Sears exposure was minimal and the default almost inconsequential on my balance. I tell my kids that they can invest no more than 10% -15% of their money in individual stock picks.

3. Treat yourself like a client. Just as the cobbler should repair his own shoes, so too should I have taken my own advice and been much more vigilant in my annual rebalancing. Yes,  do unto yourself as you do with others.

While not a universal lesson, it’s probably worth mentioning that one should always be wary of hedge fund managers-turned CEOs (like Eddie Lampert of Sears.) It’s quite likely that Mr. Lampert will benefit in some way from his bondholder’s misfortune.

As I was lamenting about my error, my husband did some quick calculations. According to his math, our on-sale purchases of a fridge, dishwasher, washing machine, garbage disposal, tool set, and lawn mower at Sears “saved” us more than the money I lost by holding the bond! And, they are still going strong—so, on balance, our good investments in Sears (merchandise) outweighs the bad (bond). As a financial planner, I can’t endorse his logic, but I will feel better each time I turn on the garbage disposal!