A growth-focused portfolio with heavy emphasis on technology and large-cap stocks

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

Growth Investors

This portfolio suits an investor with a growth-oriented profile, willing to accept higher levels of risk for the potential of substantial returns. Ideal for those with a long-term investment horizon, it caters to individuals comfortable with market fluctuations and who prefer to invest in sectors with high growth potential, like technology. The investor likely has a strong understanding of market dynamics and is less concerned with short-term volatility, focusing instead on significant long-term gains.

Positions

  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    65.00%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    35.00%

This portfolio is highly concentrated, with 65% allocated to the Invesco NASDAQ 100 ETF and 35% to the Vanguard S&P 500 ETF. This composition indicates a strong focus on equities, particularly within the technology sector and large-cap companies. The absence of bonds, commodities, or alternative investments suggests a lack of diversification across asset classes, which could lead to higher volatility. However, the chosen ETFs are known for their broad market exposure, which mitigates some of the risks associated with individual stock investments.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 16.48%, with a significant maximum drawdown of -31.19%. These figures highlight the portfolio's capacity for high returns, albeit with substantial risk. The days contributing to 90% of returns being limited to 19 indicates that the portfolio's performance is heavily reliant on a few significant market movements, underscoring the importance of timing and market conditions in its success.

Projection Info

Monte Carlo simulations, based on historical data, project a wide range of outcomes, with a median increase of 693.9%. While these projections suggest potential for substantial growth, it's crucial to remember that they are based on past performance, which is not a reliable indicator of future results. The simulations also underscore the portfolio's high-risk, high-reward nature, with nearly all simulations resulting in positive returns.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio is entirely composed of stocks, with no allocation to other asset classes like bonds or real estate. This single-asset class approach simplifies management but increases exposure to market volatility. Stocks, especially those in the technology sector, can offer high returns but are susceptible to rapid price changes. Diversifying across different asset classes can help mitigate this risk by spreading exposure to different market dynamics.

Sectors Info

  • Technology
    46%
  • Telecommunications
    14%
  • Consumer Discretionary
    12%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Financials
    5%
  • Industrials
    5%
  • Utilities
    2%
  • Basic Materials
    1%
  • Energy
    1%
  • Real Estate
    1%

Technology, at 46%, dominates the sectoral allocation, followed by communication services and consumer cyclicals. This concentration in high-growth sectors could lead to higher volatility, especially during market downturns or sector-specific disturbances. However, it also positions the portfolio to capitalize on the growth potential of these industries. Balancing high-growth sectors with more stable ones, like healthcare or consumer defensive, could provide a more resilient performance across different market conditions.

Regions Info

  • North America
    98%
  • Europe Developed
    1%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Asia Developed
    0%

With 98% of assets allocated to North America, the portfolio's geographic exposure is highly concentrated. This focus on a single region increases vulnerability to local market fluctuations and misses out on potential opportunities in developed European markets or emerging markets in Asia and Latin America. Diversifying geographically can help spread risk and tap into growth opportunities outside the domestic market.

Market capitalization Info

  • Mega-cap
    52%
  • Large-cap
    34%
  • Mid-cap
    14%
  • Small-cap
    0%

The portfolio's emphasis on mega (52%) and big (34%) cap stocks suggests a preference for established, large companies, which tend to be less volatile than smaller companies. However, this focus might limit potential high-growth opportunities that mid and small-cap stocks can offer. Including a broader range of market capitalizations could enhance diversification and growth potential.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.74%

The portfolio yields an average dividend of 0.74%, combining the yields from both ETFs. While not the primary focus, these dividends contribute to total returns and provide a modest income stream. In growth-oriented portfolios, dividends are often reinvested to compound growth. However, investors seeking higher income might consider assets with higher yield potential.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.11%

The total expense ratio (TER) of 0.11% is impressively low, which is beneficial for long-term growth as costs can significantly erode returns over time. The choice of low-cost ETFs is commendable and aligns with best practices for cost-effective portfolio management.

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.

Considering the portfolio's current composition and risk profile, there's room for optimization towards the Efficient Frontier, which could potentially enhance the risk-return ratio. This might involve diversifying across more asset classes or rebalancing sector and geographic exposures. Such adjustments aim to achieve the most efficient return for the given level of risk, though it's important to note that "efficiency" focuses solely on risk and return, not personal investment goals.

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