A cautious portfolio blending global stocks, bonds, and gold for diversified, stable growth

Report created on May 31, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is structured with a 70% allocation to global stocks via the Vanguard Total World Stock Index Fund ETF Shares, 15% in bonds through the Vanguard Total Bond Market Index Fund ETF Shares, and 15% in gold via SPDR® Gold Shares. This composition reflects a cautious approach to investing, aiming to balance growth with risk management. The heavy weighting towards a global stock ETF underscores a belief in equity markets for long-term growth, while the bond and gold allocations serve as hedges against market volatility and inflation, respectively.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.17%, with a maximum drawdown of -25.57%. This performance indicates a relatively stable growth trajectory, especially considering the portfolio's cautious risk profile. The days contributing to 90% of returns highlight the impact of significant market movements on performance. Comparing this to benchmarks, the portfolio's resilience during market downturns and ability to capture upside in growth periods is notable.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential portfolio values. With 968 out of 1,000 simulations showing positive returns, the median projection indicates a 158.9% increase, highlighting the portfolio's potential for significant growth. However, the 5th percentile projection at 10.3% growth warns of scenarios where returns could be modest. These projections underscore the importance of maintaining a long-term perspective and the benefits of diversification.

Asset classes Info

  • Stocks
    69%
  • Other
    15%
  • Bonds
    15%
  • Cash
    1%

The portfolio's asset allocation spans stocks (69%), bonds (15%), gold (15%), and a minimal cash position (1%). This diversification across asset classes is designed to mitigate risk while capturing growth from equity markets. The bond allocation provides income and reduces volatility, gold acts as an inflation hedge and diversifier, and the small cash reserve offers liquidity. This balance is in line with the portfolio's cautious risk classification, aiming to protect against market downturns while participating in upward trends.

Sectors Info

  • Technology
    16%
  • Financials
    12%
  • Industrials
    8%
  • Consumer Discretionary
    7%
  • Health Care
    7%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Basic Materials
    3%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation within the stock component is broadly diversified, with technology (16%) and financial services (12%) as the leading sectors, followed by industrials, consumer cyclicals, and healthcare. This sector spread aligns with global market compositions, providing exposure to both cyclical and defensive sectors. The emphasis on technology and financial services reflects a tilt towards sectors with potential for high growth and innovation, balanced by investments in more stable, essential industries.

Regions Info

  • North America
    45%
  • Europe Developed
    11%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (45%), with significant exposures to developed Europe (11%) and a modest presence in emerging markets and other regions. This distribution suggests a focus on established markets for stability and growth, while maintaining some exposure to emerging markets for diversification and potential higher returns. The underrepresentation of emerging markets might limit exposure to high-growth regions, which could be an area for adjustment depending on risk tolerance and growth objectives.

Market capitalization Info

  • Mega-cap
    30%
  • Large-cap
    22%
  • No data
    15%
  • Mid-cap
    13%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's exposure by market capitalization leans heavily towards mega (30%) and big (22%) cap stocks, with lesser allocations to medium, small, and micro caps. This skew towards larger companies is typical for investors seeking stability and lower volatility, as these firms are generally more established and financially robust. However, the inclusion of smaller caps, even in modest amounts, introduces potential for higher growth, albeit with increased risk.

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 current allocation appears well-optimized for a cautious risk profile, balancing growth potential with risk management. Utilizing the Efficient Frontier concept, which aims for the highest possible return for a given level of risk, this portfolio's diversification across asset classes and sectors suggests it is positioned near the efficient frontier. However, continuous review and slight adjustments may enhance risk-adjusted returns, especially considering changing market dynamics and personal financial goals.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 1.83%

The dividend yields from the Vanguard Total Bond Market Index Fund ETF Shares (3.80%) and the Vanguard Total World Stock Index Fund ETF Shares (1.80%) contribute to the portfolio's total yield of 1.83%. This income stream, while modest, complements capital appreciation as a source of total return. For a cautious investor, these dividends can offer a steady cash flow, which can be reinvested for compounding effects or used as income.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • SPDR® Gold Shares 0.40%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) of 0.11% is impressively low, maximizing the potential for net returns over the long term. Keeping costs low is crucial in investment management, as high fees can significantly erode gains, especially in a low-return environment. This portfolio benefits from the cost efficiency of ETFs, which typically offer lower expense ratios compared to actively managed funds.

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