A growth-focused portfolio with a strong technology presence and moderate geographic diversity

Report created on Dec 22, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards common stocks, comprising almost 100% of its assets, with a significant focus on technology. This structure aligns with a growth-focused strategy, aiming for capital appreciation over time. Compared to typical growth portfolios, this one is slightly more concentrated in equities, offering potentially higher returns but also increased volatility. To enhance diversification, consider incorporating a broader range of asset classes, such as bonds or alternative investments, to balance risk and reward.

Growth Info

Historically, the portfolio has shown impressive performance, with a CAGR of 54.89%. This indicates strong growth potential, but the high max drawdown of -20.16% suggests significant risk during market downturns. While past performance is not indicative of future results, it does highlight the portfolio's capacity for rapid gains. To mitigate downside risk, consider strategies like rebalancing or incorporating more defensive assets that can cushion against volatility, especially during turbulent market periods.

Projection Info

Using Monte Carlo simulations, the portfolio's potential future outcomes were projected under various scenarios. The median projection shows a significant potential return of 5,565.08%, but outcomes can vary widely. Monte Carlo analysis uses historical data to simulate future performance, acknowledging that past trends may not continue. To manage expectations, it is wise to prepare for a range of outcomes and consider periodically reviewing the portfolio to ensure it aligns with changing market conditions and personal investment goals.

Asset classes Info

  • Stocks
    100%

The portfolio's asset allocation is heavily skewed towards stocks, with a negligible presence in bonds and other asset classes. This concentration in equities can lead to high returns but also increases exposure to market volatility. Diversification across different asset classes is crucial to balancing risk and return. Consider adding bonds or other fixed-income securities to provide stability and income, especially during market downturns, thus enhancing the overall resilience of the portfolio.

Sectors Info

  • Technology
    44%
  • Financials
    12%
  • Real Estate
    9%
  • Telecommunications
    7%
  • Energy
    6%
  • Basic Materials
    5%
  • Consumer Discretionary
    5%
  • Industrials
    5%
  • Health Care
    4%
  • Consumer Staples
    3%
  • Utilities
    1%

The portfolio is notably concentrated in the technology sector, comprising over 43% of its holdings. While this can drive growth during tech booms, it also exposes the portfolio to sector-specific risks, such as regulatory changes or tech market corrections. To mitigate these risks, consider diversifying into sectors like healthcare or consumer goods, which may perform differently under various economic conditions. This balance can help stabilize returns and reduce reliance on a single sector's performance.

Regions Info

  • North America
    87%
  • Europe Developed
    4%
  • Latin America
    4%
  • Asia Emerging
    2%
  • Japan
    1%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is predominantly exposed to North America, accounting for over 87% of its holdings. This concentration could limit global diversification benefits and increase susceptibility to regional economic fluctuations. To enhance diversification, consider increasing exposure to emerging markets or other international regions. This broader geographic allocation can help capture growth opportunities worldwide and reduce the impact of localized economic downturns on the portfolio's overall performance.

Redundant positions Info

  • Avantis All Equity Markets ETF
    Vanguard S&P 500 ETF
    Vanguard Total World Stock Index Fund ETF Shares
    High correlation
  • Vanguard High Dividend Yield Index Fund ETF Shares
    Schwab U.S. Dividend Equity ETF
    High correlation

The portfolio includes several highly correlated assets, particularly among ETFs, which may limit diversification benefits. Correlated assets tend to move together, reducing the portfolio's ability to offset losses during market downturns. To enhance diversification, consider reducing the overlap by selecting assets with lower correlation. This can involve choosing ETFs or stocks that provide exposure to different sectors or regions, thereby improving the portfolio's resilience against market volatility.

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 portfolio could potentially be optimized along the Efficient Frontier by focusing on risk vs. return trade-offs. This involves adjusting the allocation of current assets to achieve the best possible risk-return ratio. While the portfolio is already growth-oriented, exploring optimization can help enhance returns without necessarily increasing risk. Consider working with a financial advisor to identify optimal allocation strategies that align with personal risk tolerance and investment objectives.

Dividends Info

  • Avantis All Equity Markets ETF 0.90%
  • Broadcom Inc 0.70%
  • Enbridge Inc 6.50%
  • Realty Income Corp 5.90%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Sociedad Quimica y Minera de Chile SA ADR B 0.60%
  • Vanguard S&P 500 ETF 0.90%
  • Vanguard Total World Stock Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 1.60%
  • Vanguard High Dividend Yield Index Fund ETF Shares 2.00%
  • Verizon Communications Inc 6.70%
  • Weighted yield (per year) 1.59%

The portfolio has a modest total dividend yield of 1.59%, with contributions from several high-yielding stocks like Verizon and Enbridge. Dividends provide a steady income stream, which can be particularly valuable during periods of market volatility. While the primary focus is on growth, maintaining a balance between growth and income can enhance total returns. Consider reinvesting dividends to take advantage of compounding or using them to rebalance the portfolio, aligning with long-term financial goals.

Ongoing product costs Info

  • Avantis All Equity Markets ETF 0.23%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Vanguard High Dividend Yield Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.03%

The portfolio's costs are impressively low, with a total expense ratio (TER) of 0.03%, primarily due to low-cost ETFs. Minimizing costs is crucial for maximizing long-term returns, as high fees can erode gains over time. This cost efficiency is a strong aspect of the portfolio, supporting better performance. Continue monitoring the expense ratios of all holdings and consider replacing any high-fee assets with more cost-effective alternatives, ensuring the portfolio remains optimized for growth.

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