A speculative portfolio with high risk and limited diversification focused on US equities

Report created on Dec 22, 2024

Risk profile Info

7/7
Speculative
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily weighted towards two ETFs, each making up 40% of the portfolio, with the remaining 20% invested in a single common stock. This composition results in a concentrated portfolio with limited diversification. A more diversified portfolio typically includes a wider range of asset classes and securities to spread risk. To enhance diversification, consider adding different asset types like bonds or international equities.

Growth Info

The historical performance shows a concerning maximum drawdown of -56.06%, indicating significant volatility. This means that at one point, the portfolio's value dropped by over half. While past performance isn't a guarantee of future results, such a drawdown suggests a high-risk profile. To mitigate this, consider strategies that include more stable assets, which may help cushion against severe market downturns.

Projection Info

The Monte Carlo simulation, a method that uses historical data to project potential future outcomes, shows no simulations with positive returns. This suggests that the current asset allocation may not be optimal for achieving positive returns under various market conditions. To improve future projections, consider rebalancing the portfolio to include assets with historically positive returns.

Asset classes Info

  • Stocks
    60%

The portfolio is overwhelmingly concentrated in equities, with a negligible cash position. This lack of diversification across asset classes can increase risk, as equities tend to be more volatile than bonds or other asset types. To manage risk better, consider introducing fixed-income products or alternative investments that may provide stability during market fluctuations.

Sectors Info

  • Real Estate
    21%
  • Technology
    13%
  • Financials
    5%
  • Health Care
    4%
  • Consumer Discretionary
    4%
  • Telecommunications
    4%
  • Industrials
    3%
  • Consumer Staples
    2%
  • Energy
    1%
  • Utilities
    1%
  • Basic Materials
    1%

Sector allocation is skewed towards real estate and technology, with significant underrepresentation in other sectors. This concentration can lead to increased volatility, especially if these sectors face downturns. Balancing sector exposure by including more consumer defensive or healthcare stocks could help reduce risk and provide steadier returns.

Regions Info

  • North America
    60%

Geographically, the portfolio is heavily focused on North America, with minimal exposure to Europe or Asia. This limits the benefits of global diversification, which can protect against regional economic downturns. Consider increasing international exposure to capture growth opportunities in emerging markets and reduce reliance on the US economy.

Dividends Info

  • Vanguard S&P 500 ETF 0.90%
  • Weighted yield (per year) 0.36%

The portfolio has a modest overall dividend yield of 0.36%, which may not significantly contribute to total returns. Dividends can provide a steady income stream, especially in turbulent markets. Consider incorporating higher-yielding stocks or dividend-focused ETFs to potentially boost income and reduce reliance on capital gains.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.01%

The portfolio benefits from low costs, with the Vanguard S&P 500 ETF having a Total Expense Ratio (TER) of just 0.03%. Low fees are advantageous as they help maximize returns over time. This cost efficiency is a positive aspect of the portfolio, and maintaining or reducing costs further can enhance long-term performance.

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