Highly Diversified Growth Portfolio with Strong Historic Performance and Efficient Cost Structure

Report created on Nov 25, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is composed of a mix of ETFs and individual stocks, with a strong focus on equities, making up about 92.8% of the total. A small allocation to bonds at 6.8% provides some stability, while cash and other assets are negligible. This composition suggests a growth-oriented strategy, emphasizing capital appreciation over income. The presence of well-known funds like Vanguard and iShares indicates a preference for broad market exposure. To maintain balance, consider monitoring the proportion of individual stocks to ensure they align with overall objectives and risk tolerance.

Growth Info

Historically, the portfolio has performed well, with a compound annual growth rate (CAGR) of 16.23%. This impressive return is indicative of a robust investment strategy that has capitalized on market upswings. However, it's important to note the maximum drawdown of -36.64%, highlighting potential volatility. The portfolio's ability to generate significant returns in a small number of trading days suggests a strong emphasis on growth. To mitigate risks, ensure that the portfolio's volatility is in line with personal risk tolerance and consider strategies to protect against large drawdowns.

Projection Info

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 median outcome suggests a significant potential for growth, with the 50th percentile reaching over 2,327%. This indicates a high probability of positive returns, with 995 out of 1,000 simulations resulting in gains. While this is encouraging, it's essential to remain aware of the inherent uncertainties in projections. Regularly review the portfolio's alignment with long-term goals and be prepared to adjust as market conditions evolve.

Asset classes Info

  • Stocks
    93%
  • Bonds
    7%

The portfolio is heavily weighted towards stocks, which is typical for a growth-oriented strategy. With a 92.8% allocation to equities, it aims to maximize returns through capital appreciation. The 6.8% allocation to bonds provides a degree of diversification and stability, though it's relatively modest. This asset class distribution is suitable for investors with a higher risk tolerance and a long-term investment horizon. To enhance diversification, consider periodically reviewing the allocation between asset classes to ensure it aligns with changing market conditions and personal financial goals.

Sectors Info

  • Technology
    22%
  • Financials
    14%
  • Consumer Staples
    11%
  • Health Care
    11%
  • Industrials
    9%
  • Consumer Discretionary
    9%
  • Telecommunications
    6%
  • Basic Materials
    4%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is diverse, with significant exposure to technology, financial services, and consumer defensive sectors. This diversity helps mitigate sector-specific risks and captures growth opportunities across different industries. The technology sector leads with 21.8%, reflecting its strong performance in recent years. While diversification is a strength, it's crucial to monitor sector weights to avoid overexposure to any single industry. Regularly assess the potential impact of economic and industry trends on sector performance and consider rebalancing if necessary to maintain a balanced risk-return profile.

Regions Info

  • North America
    56%
  • Europe Developed
    11%
  • Asia Emerging
    10%
  • Asia Developed
    7%
  • Japan
    4%
  • Africa/Middle East
    2%
  • Australasia
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly focused on North America, which constitutes 55.5% of the allocation. This concentration reflects a bias towards the U.S. market, known for its stability and growth potential. However, the inclusion of developed and emerging markets in Europe and Asia adds valuable diversification. This geographic spread can help mitigate risks associated with regional economic fluctuations. To further enhance global diversification, periodically assess geographic allocations and consider adjusting exposure to ensure a balanced approach that captures opportunities in various regions.

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 optimization chart indicates potential for increased efficiency, suggesting a more balanced risk-return profile. Moving along the efficient frontier can help achieve a riskier or more conservative portfolio, depending on personal preferences. To optimize, consider evaluating the current asset allocation and exploring opportunities to enhance diversification. Focus on rebalancing to maintain desired risk levels and ensure alignment with long-term objectives. By regularly reviewing and adjusting the portfolio composition, investors can better manage risk and potentially improve returns, while maintaining a disciplined approach to achieving financial goals.

Dividends Info

  • Costco Wholesale Corp 2.00%
  • iShares Core MSCI International Developed Market 3.00%
  • iShares Core MSCI Emerging Markets ETF 2.70%
  • WisdomTree Floating Rate Treasury Fund 4.80%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 2.12%

The portfolio's dividend yield stands at 2.12%, providing a moderate level of income alongside capital appreciation. The WisdomTree Floating Rate Treasury Fund leads with a 4.8% yield, offering a stable income source. While dividends are not the primary focus of this growth-oriented portfolio, they contribute to total returns and can provide a buffer during market volatility. To optimize income generation, periodically review dividend yields and consider reinvesting dividends to take advantage of compounding effects, aligning with long-term growth objectives.

Ongoing product costs Info

  • iShares Core MSCI International Developed Market 0.04%
  • iShares Core MSCI Emerging Markets ETF 0.09%
  • WisdomTree Floating Rate Treasury Fund 0.15%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio is cost-efficient, with a total expense ratio (TER) of 0.05%. This low-cost structure is advantageous, as it minimizes the drag on returns over time. The use of index funds like Vanguard and iShares contributes to this efficiency, offering broad market exposure at a low cost. Keeping investment costs low is crucial for maximizing net returns, especially in a growth-focused portfolio. Regularly review expense ratios and consider cost-effective investment options to ensure the portfolio remains aligned with financial goals while minimizing unnecessary expenses.

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