A portfolio that puts all its eggs in the stock market basket and calls it diversification
Report created on Jun 12, 2025Risk profile
5/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00% -
VX Vanguard Extended Market Index Fund ETF Shares
VXF - US9229086528 20.00% -
VE Vanguard FTSE Developed Markets Index Fund ETF Shares
VEA - US9219438580 10.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 10.00% -
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 5.00% -
VU Vanguard Growth Index Fund ETF Shares
VUG - US9229087369 5.00%
This portfolio is like a party that only invited one type of guest: stocks. With 99% in stocks and a seemingly random sprinkle of cash, it's like planning a balanced diet by only shopping in the candy aisle. The heavy reliance on a single asset class is like flying with one engine; it might work, but you're one hiccup away from a nosedive. While it's great to see some international flavors with the Vanguard FTSE Developed Markets and Total International Stock ETFs, the overwhelming presence of U.S. stocks suggests a fear of true global exploration.
Growth
Looking at the historic performance, a 12.49% CAGR sounds impressive, like boasting about benching 300 pounds at the gym. But that -35.10% max drawdown is the financial equivalent of pulling a muscle on your first rep. Those 26 days responsible for 90% of returns? It's like your entire financial happiness depends on the mood swings of a few unpredictable market days. This portfolio's past performance is a roller coaster that only the bravest—or most naive—would ride without questioning.
Projection
The Monte Carlo simulation, with its fancy 1,000 scenarios, shows a future brighter than a Las Vegas skyline with a median return of 328.4%. But remember, Monte Carlo is essentially a sophisticated gambling algorithm, predicting portfolio performance like a fortune teller with a crystal ball. While the optimistic 507.5% at the 67th percentile sounds like a dream, the reality is that market conditions change faster than fashion trends. Betting on these projections is like trusting weather forecasts for next year's picnics.
Asset classes
- Stocks 99%
- Cash 1%
Having 99% of your portfolio in stocks is like building a house with only a hammer. Sure, you can get the job done, but it's not going to be pretty—or stable. The token 1% in cash feels like tipping your server with pocket lint. Diversification across asset classes is key to weathering market storms, and this portfolio seems to have forgotten that bonds, real estate, and commodities even exist.
Sectors
- Technology 27%
- Financials 16%
- Industrials 11%
- Consumer Discretionary 11%
- Health Care 10%
- Telecommunications 8%
- Consumer Staples 5%
- Energy 3%
- Basic Materials 3%
- Real Estate 3%
- Utilities 2%
The sector allocation seems to have been decided by a dartboard approach, with a tech-heavy tilt that screams "I read a tech blog once." Financial services and industrials are the wingmen, trying to balance the tech party, but consumer cyclicals, healthcare, and communication services are like the friends who were invited out of obligation. This sector spread is a recipe for volatility, akin to investing based on a horoscope reading.
Regions
- North America 81%
- Europe Developed 10%
- Japan 4%
- Asia Emerging 2%
- Asia Developed 2%
- Australasia 1%
With 81% in North America, this portfolio has a serious home bias. It's like traveling the world but only eating at McDonald's. Europe, Japan, and Asia get a nod, but the allocation is so timid it's like dipping a toe in the ocean and claiming you went swimming. Emerging markets are almost an afterthought, which is like ignoring the spicy section of the menu entirely. A little more adventurous spirit could bring some much-needed diversification and potentially, better returns.
Market capitalization
- Mega-cap 39%
- Large-cap 26%
- Mid-cap 20%
- Small-cap 10%
- Micro-cap 4%
The market cap allocation leans heavily towards the big boys, with a 39% mega-cap obsession. It's like only watching blockbuster movies and ignoring indie films. Big caps bring stability, but the 10% in small caps and 4% in micros show a reluctance to bet on up-and-comers. This portfolio is playing it safe, like ordering vanilla ice cream at a gourmet gelato shop. A more balanced cap spread could add some zest to the returns.
Redundant positions
-
High correlationVanguard Growth Index Fund ETF SharesSchwab U.S. Large-Cap Growth ETFVanguard S&P 500 ETF
-
High correlationVanguard FTSE Developed Markets Index Fund ETF SharesVanguard Total International Stock Index Fund ETF Shares
The high correlation between certain ETFs in this portfolio is like buying five different brands of plain white t-shirts and expecting a versatile wardrobe. The Vanguard Growth and Schwab Large-Cap Growth ETFs might as well be twins, reducing the diversification effect and increasing the portfolio's risk profile. It's a classic case of too many cooks spoiling the broth, or in this case, too many similar ETFs diluting potential gains.
Risk vs. return
This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.
Click on the colored dots to explore allocations.
Efficiency in this portfolio is an illusion, like a mirage in the desert. The suggestion to remove overlapping assets is a step towards sanity in a sea of redundancy. It's like realizing you've been paying for the same streaming service twice. Streamlining to enhance diversification without sacrificing the growth objective could turn this one-trick pony into a more balanced thoroughbred.
Dividends
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Vanguard FTSE Developed Markets Index Fund ETF Shares 2.80%
- Vanguard S&P 500 ETF 1.30%
- Vanguard Growth Index Fund ETF Shares 0.50%
- Vanguard Extended Market Index Fund ETF Shares 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.90%
- Weighted yield (per year) 1.50%
The dividend yield strategy here is as underwhelming as finding a single fry at the bottom of your takeout bag. With an overall yield of 1.50%, it's clear that income generation is not this portfolio's forte. It's leaning heavily on growth, which is like skipping breakfast and lunch, hoping for a feast at dinner. While growth is exciting, a sprinkle of higher-yielding assets could provide a steady cash flow to reinvest or buffer against market volatility.
Ongoing product costs
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Growth Index Fund ETF Shares 0.04%
- Vanguard Extended Market Index Fund ETF Shares 0.06%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.04%
The one thing this portfolio gets right is keeping costs low, with an average Total Expense Ratio (TER) of 0.04%. It's like finding a luxury hotel at motel prices. In a world where every penny counts, this frugality is commendable. However, don't let the low fees distract you from the portfolio's other, more glaring issues. It's akin to celebrating the fuel efficiency of a car that only drives in circles.
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