A cautious portfolio with broad diversification and a focus on stability and steady growth

Report created on Dec 24, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of ETFs, with a notable 55% allocation to the Vanguard Total Stock Market Index Fund ETF. This heavy weighting in a single fund indicates a strong focus on broad U.S. market exposure. In comparison, a common benchmark might have a more balanced distribution among equities, bonds, and other assets. This composition suggests a preference for equity growth but with a cautious approach, as evidenced by the inclusion of treasury bonds and cash equivalents. To enhance diversification, consider adjusting allocations to include more fixed-income or alternative investments.

Growth Info

Historically, the portfolio has performed well, boasting a Compound Annual Growth Rate (CAGR) of 13.12%. This is a strong performance compared to typical market returns, showcasing its potential for growth. However, it's important to note that the maximum drawdown of -19.3% indicates vulnerability during market downturns. While past performance can provide insights, it does not guarantee future results. To mitigate potential losses, consider strategies such as increasing defensive assets or using hedging techniques.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, suggests a median growth of 232.48%. With 988 out of 1,000 simulations showing positive returns, this indicates a high probability of positive performance. However, projections are inherently uncertain and should be interpreted cautiously. To prepare for varying outcomes, consider maintaining a flexible strategy that allows for adjustments based on market conditions, ensuring alignment with long-term goals.

Asset classes Info

  • Stocks
    70%
  • Cash
    15%
  • Bonds
    10%
  • Real Estate
    5%

The portfolio features a strong equity presence at 69.58%, complemented by cash, bonds, and real estate allocations. This diversity across asset classes supports risk mitigation and stability. Compared to typical benchmarks, the significant cash and bond holdings reflect a cautious stance, which can provide a buffer during volatility. To enhance diversification further, consider increasing exposure to alternative asset classes, such as commodities or infrastructure, which may offer additional protection against market fluctuations.

Sectors Info

  • Technology
    19%
  • Financials
    11%
  • Health Care
    8%
  • Consumer Discretionary
    7%
  • Industrials
    7%
  • Real Estate
    7%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%

The sector allocation reveals a concentration in technology at 18.9%, followed by financial services and healthcare. This distribution aligns with common benchmarks, indicating a balanced approach. However, tech-heavy portfolios may experience higher volatility during interest rate hikes. The presence of real estate and consumer cyclicals adds stability and potential growth. To maintain sector balance, consider periodically reviewing sector weights and adjusting to reflect evolving market trends and economic conditions.

Regions Info

  • North America
    61%
  • Europe Developed
    6%
  • Asien Schwellenländer
    2%
  • Japan
    2%
  • Asien
    2%
  • Australasia
    1%
  • Afrika/Mittlerer Osten
    1%

Geographically, the portfolio is heavily weighted toward North America at 60.94%, with limited exposure to emerging markets. This concentration may limit diversification benefits and expose the portfolio to regional risks. Common benchmarks often suggest a more balanced global allocation. To enhance geographic diversification, consider increasing exposure to underrepresented regions, such as Asia or Latin America, which may offer growth opportunities and reduce reliance on any single market.

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.

The portfolio shows potential for optimization using the Efficient Frontier, which aims to maximize returns for a given level of risk. By adjusting the current asset allocation, you could achieve a more favorable risk-return ratio. This optimization focuses solely on the existing assets, ensuring alignment with your risk tolerance and investment goals. To explore this further, consider consulting with a financial advisor to tailor the portfolio to your specific needs.

Dividends Info

  • Direxion Auspice Broad Commodity Strategy ETF 3.30%
  • iShares® 0-3 Month Treasury Bond ETF 5.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.90%
  • Vanguard Total International Stock Index Fund ETF Shares 1.70%
  • The Real Estate Select Sector SPDR Fund 2.40%
  • Weighted yield (per year) 1.46%

With a total dividend yield of 1.46%, the portfolio provides moderate income potential. The iShares 0-3 Month Treasury Bond ETF offers a notable 5.1% yield, contributing to steady cash flow. Dividends can be an important component for income-focused investors, providing returns independent of market performance. To enhance income, consider increasing allocations to high-yielding assets or dividend-focused funds, balancing growth with income needs.

Ongoing product costs Info

  • Direxion Auspice Broad Commodity Strategy ETF 0.80%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • WisdomTree Bloomberg U.S. Dollar Bullish Fund 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • The Real Estate Select Sector SPDR Fund 0.09%
  • Weighted costs total (per year) 0.17%

The portfolio's total expense ratio (TER) is 0.17%, which is impressively low and supports better long-term performance. Keeping costs minimal is crucial, as fees can significantly erode returns over time. This cost efficiency aligns with best practices, ensuring more of your capital is working for you. To maintain this advantage, periodically review the expense ratios of holdings and consider replacing high-fee assets with more cost-effective alternatives.

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