Balanced Portfolio with Cautious Risk and High Dividend Yield Plus Overlapping Assets Needing Attention for Better Diversification

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 is suitable for cautious investors seeking a balanced approach to income and growth. With a moderate risk tolerance, these investors prioritize steady income through dividends while remaining open to capital appreciation opportunities. Their investment horizon is typically long-term, allowing them to weather market fluctuations. A preference for diversified holdings across sectors and regions aligns with their goal of maintaining stability while pursuing potential growth. Such investors value a well-rounded strategy that balances risk and reward.

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
    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
    2.14%

The portfolio shows a cautious risk profile, with a moderately diversified mix of ETFs and individual stocks. It has a significant allocation to dividend-focused ETFs, indicating a preference for income generation. The presence of both technology giants like Apple and Amazon and stable energy stocks such as Exxon Mobil and Chevron suggests a blend of growth and stability. This composition aims to balance potential capital appreciation with income stability. To enhance diversification, consider balancing sector exposure and including more varied asset classes.

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

Growth Info

Historically, the portfolio has performed impressively, with a CAGR of 26.55%. This indicates strong growth potential, likely driven by the tech and energy sectors. However, the max drawdown of -6.91% suggests some vulnerability during market downturns. The concentrated returns over just 11 days highlight the importance of timing in capturing gains. While past performance is promising, it's essential to maintain a diversified strategy to mitigate risks and sustain growth over the long term.

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

Projection Info

Using a Monte Carlo simulation, the portfolio's future performance shows a wide range of outcomes, reflecting inherent market uncertainties. With 1,000 simulations, the median expected return is 2,500.61%, indicating robust growth potential. The 5th percentile return of 393.21% suggests that even in less favorable scenarios, the portfolio could still yield positive returns. This simulation underscores the importance of maintaining a diversified and balanced approach to navigate potential market fluctuations and achieve long-term investment goals.

Asset classes Info

  • 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. This indicates a strong focus on equity growth, complemented by minimal exposure to bonds and cash. While this allocation can drive higher returns, it also introduces volatility. To reduce risk, consider increasing allocations to bonds or other fixed-income assets, which can provide stability and income. A more balanced asset class distribution can help cushion against market downturns and enhance the portfolio's overall resilience.

Sectors Info

  • 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-wise, the portfolio is concentrated in technology, energy, and industrials, accounting for a significant portion of the allocation. This focus on high-growth sectors can drive returns but also increases exposure to sector-specific risks. Diversifying into underrepresented sectors like healthcare or consumer defensives could enhance stability and reduce volatility. A more even sector distribution can help mitigate risks associated with economic cycles and provide a more balanced growth trajectory.

Regions Info

  • 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 America, with over 69% allocation. This concentration exposes it to regional economic and political risks. While North America offers robust growth opportunities, diversifying into other regions like Asia or Europe could provide additional growth avenues and reduce regional risk exposure. Expanding geographic diversification can enhance the portfolio's resilience against localized market downturns and tap into global growth potential.

Redundant positions Info

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

The portfolio contains highly correlated assets, particularly among ETFs like JPMorgan Nasdaq Equity Premium Income ETF and Roundhill NDX 0DTE Covered Call Strategy ETF. This correlation limits diversification benefits, as these assets tend to move in tandem. Reducing exposure to overlapping assets can enhance diversification and reduce risk. By selecting less correlated investments, the portfolio can achieve a more balanced risk-return profile and improve overall performance stability.

Dividends Info

  • Apple Inc 0.40%
  • YieldMax COIN Option Income Strategy ETF 129.40%
  • Chevron Corp 3.00%
  • JPMorgan Nasdaq Equity Premium Income ETF 9.40%
  • Lockheed Martin Corporation 2.30%
  • Roundhill ETF Trust - Roundhill NDX 0DTE Covered Call Strategy ETF 24.80%
  • Raytheon Technologies Corp 1.50%
  • Schwab U.S. Dividend Equity ETF 3.40%
  • iShares® 0-3 Month Treasury Bond ETF 5.20%
  • Simplify Volatility Premium ETF 16.30%
  • Taiwan Semiconductor Manufacturing 1.20%
  • Tidal Trust II 93.00%
  • Exxon Mobil Corp 2.30%
  • Weighted yield (per year) 12.10%

The portfolio's dividend yield is a notable strength, with a total yield of 12.1%. This income generation is primarily driven by high-yield ETFs and stable dividend-paying stocks like Chevron and Lockheed Martin. While high dividends provide income, it's crucial to ensure the sustainability of these payouts. Regularly reviewing the financial health of dividend-paying companies can help maintain a reliable income stream. Balancing high yield with growth potential can optimize the portfolio's income and capital appreciation.

Ongoing product costs Info

  • 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 (TER) of 0.26% is relatively low, indicating cost-effective management. However, some ETFs like Simplify Volatility Premium ETF have higher individual costs, which could impact net returns. Keeping investment costs low is crucial for maximizing overall returns. Consider evaluating the cost-effectiveness of each holding and potentially replacing high-cost funds with more affordable alternatives. A focus on minimizing expenses can enhance the portfolio's long-term growth potential.

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.

Before optimizing the portfolio, it's essential to address overlapping assets that limit diversification benefits. By removing highly correlated holdings, the portfolio can achieve a more efficient risk-return balance. Moving along the efficient frontier allows for adjustments to risk levels, whether aiming for a riskier or more conservative portfolio. For a more aggressive approach, increasing equity exposure is an option, while a conservative strategy might involve boosting bond allocations. Focusing on diversification and correlation can enhance overall portfolio performance.

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