Balanced Portfolio with Broad Diversification and Moderate Risk

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio is suitable for a balanced investor who seeks a mix of growth and stability. Such an investor typically has a moderate risk tolerance and a medium to long-term investment horizon. They aim for steady capital appreciation while managing risk through diversification across asset classes, sectors, and geographies. This investor values both growth potential and income generation, and is comfortable with some level of market volatility.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    31.00%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    26.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    15.00%
  • Vanguard Total Bond Market Index Fund ETF Shares
    BND - US9219378356
    14.00%
  • VanEck Gold Miners ETF
    GDX - US92189F1066
    5.00%
  • Vanguard Small-Cap Value Index Fund ETF Shares
    VBR - US9229086114
    5.00%
  • iShares Silver Trust
    SLV - US46428Q1094
    3.00%
  • VanEck Junior Gold Miners ETF
    GDXJ - US92189F7915
    1.00%

The portfolio is composed of a mix of equity, bond, and commodity ETFs, with a significant allocation to stock ETFs at 82.36%. This composition suggests a balanced approach, combining growth potential from equities with stability from bonds. The inclusion of commodities like gold and silver provides an additional layer of diversification. This blend is typical for a balanced portfolio aimed at achieving steady growth while managing risk through diversification.

Growth

Historically, the portfolio has demonstrated a strong performance with a Compound Annual Growth Rate (CAGR) of 8.29%. However, it has also experienced a maximum drawdown of -27.07%, indicating periods of significant volatility. This performance highlights the potential for solid returns over the long term, but also underscores the importance of being prepared for market downturns. Maintaining a long-term perspective can help mitigate the impact of short-term volatility.

Projection

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected. The median (50th percentile) outcome shows an 81.87% increase in value, while the 5th percentile indicates a potential loss of -62.34%. This simulation provides a range of possible outcomes, reflecting the inherent uncertainty in financial markets. It emphasizes the importance of being prepared for various scenarios and maintaining a diversified portfolio to manage risk effectively.

Asset classes

  • Stocks
    82%
  • Bonds
    14%
  • Other
    3%
  • Cash
    1%
  • No data
    0%

The portfolio is diversified across three main asset classes: stocks (82.36%), bonds (13.86%), and other assets (3.02%), with a small cash allocation. This allocation aligns well with a balanced investment strategy, providing growth potential through equities while offering stability and income from bonds. To further enhance diversification, consider periodically reviewing and rebalancing the asset class allocation to maintain the desired risk profile.

Sectors

  • Technology
    24%
  • Consumer Discretionary
    9%
  • Basic Materials
    9%
  • Financials
    8%
  • Telecommunications
    8%
  • Industrials
    8%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation within the portfolio is diverse, with significant exposure to technology (24.30%), consumer cyclicals (9.04%), and basic materials (8.60%). This sector diversification helps mitigate sector-specific risks and allows the portfolio to benefit from different economic cycles. It's important to regularly review sector allocations to ensure they align with long-term investment goals and adjust if any sector becomes disproportionately represented.

Regions

  • North America
    66%
  • Europe Developed
    7%
  • Asia Emerging
    3%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America (66.34%), with smaller allocations to Europe Developed (6.60%) and Asia Emerging (2.62%). This geographic diversification helps spread risk across different regions and economies. While the current allocation provides broad exposure, consider monitoring geopolitical and economic developments in these regions to ensure the portfolio remains well-positioned for global growth opportunities.

Dividends

  • Vanguard Total Bond Market Index Fund ETF Shares 3.40%
  • VanEck Gold Miners ETF 1.40%
  • VanEck Junior Gold Miners ETF 0.60%
  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Small-Cap Value Index Fund ETF Shares 2.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.76%

Dividend yield information is not provided, but dividends can be a valuable source of income and contribute to total returns. Including dividend-paying ETFs in the portfolio can provide a steady income stream and potentially enhance long-term returns. It's beneficial to periodically review the dividend yield of the portfolio and consider reinvesting dividends to take advantage of compounding growth.

Ongoing product costs

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • VanEck Gold Miners ETF 0.51%
  • VanEck Junior Gold Miners ETF 0.52%
  • Invesco NASDAQ 100 ETF 0.15%
  • iShares Silver Trust 0.50%
  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) is 0.11%, which is relatively low and cost-effective. Keeping investment costs low is crucial for maximizing net returns over time. The low TER indicates that the portfolio is well-constructed in terms of cost efficiency. Continuously monitoring and managing investment costs can help ensure that the portfolio remains cost-effective and aligned with long-term financial goals.

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