A two-trick pony galloping through the global market with blinders on
Report created on May 31, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 70.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 30.00%
Let's start with the portfolio composition, which seems to have mistaken "broad diversification" for "let's just buy two ETFs and call it a day." With 70% in a Vanguard S&P 500 ETF and 30% in a Vanguard Total International Stock Index Fund ETF, it's like you've decided that the vast, varied world of investing can be sufficiently covered by a blanket and a sheet. This approach is akin to wearing flip-flops year-round: sure, it's easy, but you're not prepared for all conditions.
Growth
Historically, this portfolio has strutted around with a CAGR of 11.72%, which isn't too shabby. But let's not forget that past performance is like using your rearview mirror to navigate: helpful, but not without its crashes. With a max drawdown of -33.88%, it's clear this portfolio isn't stranger to taking a tumble. Those 25 days making up 90% of returns? That's like betting your entire race on a few lucky sprints.
Projection
Monte Carlo simulations, the financial world's way of saying "let's make some educated guesses," suggest a wide range of outcomes, with a median portfolio increase of 245.3%. Sounds great, but considering the 5th percentile is a measly 21.4% increase, it's a bit like planning a picnic but only checking the weather on one channel. Diversification across more asset types and strategies could help smooth out those wild swings.
Asset classes
- Stocks 99%
- Cash 1%
Diving into asset classes, we find 99% stocks and 1% cash. This is like packing for a trip with nothing but swimsuits and a single raincoat just in case. Stocks are great for growth, but that 1% cash won't do much to cushion the fall during market downturns. It's a bit like relying on a pool noodle in a tsunami.
Sectors
- Technology 26%
- Financials 17%
- Consumer Discretionary 10%
- Health Care 10%
- Industrials 10%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 4%
- Basic Materials 3%
- Utilities 3%
- Real Estate 2%
The sector spread isn't bad, with technology, financial services, and consumer cyclicals leading the pack. However, being this heavy on tech and finance is like having a diet based on coffee and energy drinks: it might work for a while, but it's not exactly balanced. A stumble in these sectors could send your portfolio into a nosedive.
Regions
- North America 72%
- Europe Developed 12%
- Asia Emerging 5%
- Japan 5%
- Asia Developed 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
Geographically, North America dominates this portfolio like a colossus, with a sprinkling of international exposure for flavor. This "America first, ask questions later" strategy might feel patriotic, but in the world of investing, it's like refusing to eat any cuisine that isn't from your hometown. Broadening your horizons could lead to tastier returns.
Market capitalization
- Mega-cap 46%
- Large-cap 33%
- Mid-cap 18%
- Small-cap 2%
The market cap allocation shows a heavy lean towards mega and big caps, making your portfolio look like it's afraid to play with the smaller kids. While mega and big caps bring stability, they often lack the growth potential of their smaller counterparts. This is the investing equivalent of always betting on the heavyweight champion without considering the nimble underdog.
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.
When it comes to risk vs. return, this portfolio seems to be walking a tightrope without a net. Sure, the potential for high returns is there, but so is the risk of a significant fall. It's a bit like juggling knives; impressive when it works, but one slip could be disastrous. Exploring more diverse asset classes and strategies could help find a safer, more efficient path to your financial goals.
Dividends
- Vanguard S&P 500 ETF 1.30%
- Vanguard Total International Stock Index Fund ETF Shares 2.90%
- Weighted yield (per year) 1.78%
The dividend yield sits at a respectable 1.78%, which isn't exactly a cash fountain but is more like finding loose change in your couch. It's a nice bonus but don't start planning your retirement around it. Balancing growth and income-generating assets could provide a more reliable income stream.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.04%
Kudos for keeping costs low with a total TER of 0.04%. In a world where fees can eat into your returns like termites on a wooden house, you've managed to keep the pests at bay. This is one of the few areas where you've truly nailed it — like actually remembering to bring sunscreen on that aforementioned trip packed with swimsuits.
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