This portfolio has only about 1.4 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.
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Balancing growth potential and risk in a heavily S&P 500 indexed portfolio with a touch of Bitcoin

Report created on Jun 13, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification
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Positions

This portfolio is strikingly concentrated, with 92% in the Schwab S&P 500 Index Fund and 4% each in the iShares Bitcoin Trust and Vanguard S&P 500 ETF. The overwhelming alignment with the S&P 500, through both a mutual fund and ETF, indicates a strong belief in the long-term performance of large-cap U.S. equities. However, this heavy concentration also suggests a limited approach to diversification, as essentially, 96% of the portfolio is invested in the U.S. stock market, with a small allocation to Bitcoin as an alternative asset class.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 21.69%, the portfolio has demonstrated impressive growth, significantly buoyed by the robust performance of the S&P 500 in recent years. However, the Max Drawdown of -18.82% highlights periods of significant volatility, particularly relevant for holdings concentrated in stock indices. Days contributing 90% of returns being so few indicates that much of the portfolio's gains are attributable to sharp, short-term market movements, underscoring the importance of staying invested through market cycles to capture these gains.

Projection Info

Monte Carlo simulations, using historical data to forecast future performance, suggest a wide range of outcomes for this portfolio. With a median projected increase of 9,572.1% and 999 out of 1,000 simulations yielding positive returns, the forward-looking scenario appears optimistic. It's crucial to remember, though, that these simulations assume historical market conditions will repeat, which may not always be the case. This method does not account for unforeseen market shifts or the evolving nature of asset classes, such as Bitcoin.

Asset classes Info

  • Stocks
    96%
  • Other
    4%

The allocation across asset classes shows a heavy tilt toward stocks (96%) with a slight diversification into alternative investments via Bitcoin (4%). This stock-centric approach aligns with the portfolio's growth orientation but comes with higher volatility and risk, especially in market downturns. The absence of fixed-income assets or commodities, aside from Bitcoin, indicates a missed opportunity for further risk mitigation and diversification.

Sectors Info

  • Technology
    30%
  • Financials
    13%
  • Health Care
    10%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

Sector allocation closely mirrors the S&P 500's composition, with technology (30%) and financial services (13%) leading the pack. This sector distribution is reflective of the current market landscape but also exposes the portfolio to sector-specific risks, such as regulatory changes in tech or economic downturns affecting financial services. Diversifying across more sectors or balancing sector weights could reduce volatility and improve resilience against market shifts.

Regions Info

  • North America
    96%

Geographically, the portfolio's nearly exclusive focus on North America (96%) underscores a significant home bias. While the U.S. market has historically offered strong returns, this concentration increases vulnerability to regional economic and political events. Expanding into developed or emerging markets outside of North America could offer additional growth opportunities and risk dispersion.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    17%
  • Small-cap
    1%

The portfolio's emphasis on mega (45%) and big (33%) cap stocks is in line with its S&P 500-centric strategy, offering stability and potential for growth. However, the minimal exposure to medium (17%) and small (1%) cap stocks limits potential upsides from faster-growing companies. Including more small and medium cap investments could enhance returns and diversification, albeit with increased risk.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Schwab S&P 500 Index Fund
    High correlation

The high correlation between the Vanguard S&P 500 ETF and Schwab S&P 500 Index Fund indicates redundancy within the portfolio, as they both track the same index. This redundancy does not contribute to diversification and instead concentrates risk. Considering assets with lower correlations to each other could enhance the portfolio's risk-adjusted returns by spreading exposure across different drivers of growth.

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.

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Optimizing this portfolio involves addressing the high correlation between the S&P 500 holdings by diversifying into assets with lower correlations to U.S. large-cap stocks. While the portfolio's current setup emphasizes growth through a proven index, incorporating assets with varied performance drivers can reduce volatility and improve the risk-return profile. This strategy should consider individual risk tolerance and investment goals, balancing the pursuit of growth with the need for risk management.

Dividends Info

  • Schwab S&P 500 Index Fund 1.20%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 1.16%

The dividend yields from the Schwab S&P 500 Index Fund and Vanguard S&P 500 ETF contribute to the portfolio's total yield of 1.16%. While not the primary focus, these dividends provide a steady income stream, which can be reinvested for compounding growth or used as income. In a growth-oriented portfolio, the role of dividends is more about reinvestment opportunities than immediate income.

Ongoing product costs Info

  • iShares Bitcoin Trust 0.12%
  • Schwab S&P 500 Index Fund 0.02%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.02%

The portfolio benefits from exceptionally low costs, with a Total Expense Ratio (TER) of 0.02%, underscoring the cost-efficiency of index funds and ETFs. Minimizing investment costs is crucial for enhancing long-term returns, as even small differences in fees can significantly impact net gains over time. This focus on low-cost investments aligns well with best practices for long-term wealth accumulation.

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