A Cautious Yet Moderately Diversified Portfolio with High Dividend Yield and Strong Historical Performance

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

Cautious Investors

This portfolio suits a cautious investor who values steady income and moderate growth. Typically, this investor seeks a balance between risk and return, aiming for capital preservation while still capturing some market upside. Their investment horizon is medium to long-term, focusing on building wealth gradually. They may prioritize stability and income generation over aggressive growth, making this portfolio's dividend yield and diversification appealing. Such an investor likely has a moderate risk tolerance, preferring a mix of equities and income-generating assets to achieve their financial goals.

Positions

  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    19.41%
  • Apple Inc
    AAPL - US0378331005
    15.32%
  • Roundhill ETF Trust - Roundhill NDX 0DTE Covered Call Strategy ETF
    QDTE - None
    11.40%
  • Amazon.com Inc
    AMZN - US0231351067
    7.27%
  • iShares® 0-3 Month Treasury Bond ETF
    SGOV - US46436E7186
    6.29%
  • Lockheed Martin Corporation
    LMT - US5398301094
    5.68%
  • Exxon Mobil Corp
    XOM - US30231G1022
    5.34%
  • Chevron Corp
    CVX - US1667641005
    5.26%
  • Simplify Volatility Premium ETF
    SVOL - US82889N8636
    5.10%
  • JPMorgan Nasdaq Equity Premium Income ETF
    JEPQ - US46654Q2030
    4.97%
  • Raytheon Technologies Corp
    RTX - US75513E1010
    4.21%
  • Taiwan Semiconductor Manufacturing
    TSM - US8740391003
    4.20%
  • YieldMax COIN Option Income Strategy ETF
    CONY - US88634T8247
    3.41%
  • Tidal Trust II
    ULTY - None
    2.14%

The portfolio is composed of a mix of ETFs and common stocks, with a focus on dividend-paying assets. It includes positions in major companies like Apple, Amazon, and Exxon Mobil, alongside various ETFs. This mix provides a balance between individual stock performance and the broader market exposure that ETFs offer. While the portfolio is moderately diversified, there is a significant concentration in certain sectors, which may limit overall diversification benefits. It's essential to maintain a balance to mitigate risks associated with sector-specific downturns.

Warning The historical data covers less than 2 years, which reduces the confidence in the calculated values.

Growth

Historically, the portfolio has shown impressive performance with a compound annual growth rate (CAGR) of 25.66%. The maximum drawdown is relatively low at -6.91%, indicating resilience during market downturns. The fact that 90% of returns were generated on just 10 days suggests a portfolio that benefits from significant market moves. Understanding the historical performance helps set expectations for future returns, though past performance is not always indicative of future results. It's crucial to ensure the portfolio remains aligned with investment goals and risk tolerance, even as market conditions change.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection

Using a Monte Carlo simulation, which models potential future outcomes based on historical data, the portfolio shows promising forward projections. Assuming a hypothetical initial investment, the 50th percentile projection indicates a potential growth of 1,833.41%, while the 67th percentile suggests even higher returns. With all simulations showing positive returns, the portfolio appears well-positioned for future growth. However, it's important to remember that these are probabilistic outcomes, and actual results may vary. Regularly reviewing and adjusting the portfolio can help maintain alignment with financial goals.

Asset classes

  • Stocks
    93%
  • Bonds
    3%
  • Cash
    2%
  • Other
    1%
  • No data
    1%

The portfolio is heavily weighted towards stocks, comprising over 92% of the total allocation. Bonds and cash make up a small percentage, which may not provide sufficient stability during market volatility. A predominantly stock-based portfolio can offer higher growth potential but also comes with increased risk. To enhance stability, consider incorporating more fixed-income assets. This shift can help cushion against market downturns and reduce overall portfolio risk, aligning with the cautious risk classification.

Sectors

  • Technology
    25%
  • Energy
    13%
  • Industrials
    13%
  • Consumer Discretionary
    11%
  • Financials
    4%
  • Health Care
    3%
  • Consumer Staples
    3%
  • Telecommunications
    2%
  • Basic Materials
    0%
  • Utilities
    0%
  • Real Estate
    0%

Sector allocation shows a strong emphasis on technology, energy, and industrials, which together account for a significant portion of the portfolio. While these sectors have performed well historically, overexposure can increase vulnerability to sector-specific risks. Diversifying across a broader range of sectors can help mitigate these risks and provide more balanced growth opportunities. It's beneficial to periodically reassess sector allocations to ensure they align with broader market trends and personal investment objectives.

Regions

  • North America
    69%
  • Asia Emerging
    4%
  • Europe Developed
    0%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Asia Developed
    0%

Geographically, the portfolio is predominantly focused on North American assets, with minimal exposure to other regions. This concentration can limit the benefits of geographic diversification, such as reducing risk through exposure to different economic cycles. Expanding geographic allocation could provide access to emerging markets and developed economies outside North America, potentially enhancing growth prospects. A more globally diversified portfolio can offer a hedge against region-specific economic fluctuations and increase long-term growth potential.

Redundant positions

  • JPMorgan Nasdaq Equity Premium Income ETF
    Roundhill ETF Trust - Roundhill NDX 0DTE Covered Call Strategy ETF
    High correlation

The portfolio exhibits some high correlations among assets, particularly between the JPMorgan Nasdaq Equity Premium Income ETF and the Roundhill ETF Trust - Roundhill NDX 0DTE Covered Call Strategy ETF. High correlations mean that these assets tend to move in the same direction, which can increase portfolio risk during market downturns. Reducing correlations by diversifying into less correlated assets can enhance risk management and improve overall portfolio stability. Regularly reviewing asset correlations can help maintain an optimal balance.

Dividends

  • Apple Inc 0.40%
  • YieldMax COIN Option Income Strategy ETF 131.70%
  • Chevron Corp 3.00%
  • JPMorgan Nasdaq Equity Premium Income ETF 9.50%
  • Lockheed Martin Corporation 2.40%
  • Roundhill ETF Trust - Roundhill NDX 0DTE Covered Call Strategy ETF 24.40%
  • Raytheon Technologies Corp 1.60%
  • Schwab U.S. Dividend Equity ETF 3.40%
  • iShares® 0-3 Month Treasury Bond ETF 5.20%
  • Simplify Volatility Premium ETF 16.50%
  • Taiwan Semiconductor Manufacturing 1.20%
  • Tidal Trust II 96.70%
  • Exxon Mobil Corp 2.40%
  • Weighted yield (per year) 12.24%

The portfolio boasts a strong total dividend yield of 12.24%, driven by high-yielding assets like the YieldMax COIN Option Income Strategy ETF and Tidal Trust II. Dividends provide a steady income stream, which is particularly valuable for investors seeking regular cash flow. However, high dividend yields can sometimes indicate higher risk. It's important to ensure these yields are sustainable over the long term. Balancing high-yield assets with more stable dividend payers can help maintain income levels while managing risk.

Ongoing product costs

  • YieldMax COIN Option Income Strategy ETF 1.01%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Roundhill ETF Trust - Roundhill NDX 0DTE Covered Call Strategy ETF 0.95%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Simplify Volatility Premium ETF 1.16%
  • Tidal Trust II 1.14%
  • Weighted costs total (per year) 0.26%

The portfolio's total expense ratio is relatively low at 0.26%, which is beneficial for maximizing returns over time. Lower costs mean more of the portfolio's returns are retained, contributing to overall growth. However, some individual positions, such as the Simplify Volatility Premium ETF and Tidal Trust II, have higher expense ratios. Monitoring and managing investment costs is crucial for optimizing portfolio performance. Consider evaluating whether the higher-cost assets are delivering sufficient value to justify their expenses.

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