High-risk high-reward portfolio with concentrated bets in technology and consumer cyclicals

Report created on Jul 31, 2025

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is highly concentrated, with 50% of its assets in Advanced Micro Devices Inc (AMD) and the other 50% in Nike Inc, representing a stark focus on the technology and consumer cyclicals sectors. This composition indicates a bold strategy, prioritizing potential high returns over diversification. The portfolio's structure, with all investments in common stocks and a split between two sectors, significantly increases its risk profile but also offers the potential for substantial rewards.

Growth Info

Historically, this portfolio has demonstrated a remarkable Compound Annual Growth Rate (CAGR) of 35.05%. However, it's important to note the substantial maximum drawdown of -64.73%, which underscores the high volatility and risk associated with this investment strategy. The fact that 90% of returns came from just 41 days highlights the portfolio's reliance on short-term gains, which may not be sustainable long-term.

Projection Info

The Monte Carlo simulation, with 1,000 iterations, suggests a wide range of potential outcomes, from a 5th percentile low of 77.1% to a 67th percentile high of 7,050.7%. This vast spread illustrates the portfolio's unpredictable nature, with a significant portion of simulations (978 out of 1,000) resulting in positive returns, reinforcing the high-risk, high-reward strategy.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks, without any bonds, real estate, or other asset classes, lacks diversification. This singular focus on equities, particularly in only two sectors, amplifies both potential returns and risks. Diversifying across different asset classes could provide a buffer against market volatility.

Sectors Info

  • Technology
    50%
  • Consumer Discretionary
    50%

Concentration in the technology and consumer cyclicals sectors exposes the portfolio to sector-specific risks, such as regulatory changes or economic downturns affecting consumer spending. While these sectors can offer significant growth, their performance is highly cyclical and can be unpredictable.

Regions Info

  • North America
    100%

With 100% of the portfolio invested in North American companies, there's a geographical concentration risk. Expanding into other regions could mitigate some risk and capitalize on global growth opportunities, particularly in emerging markets.

Market capitalization Info

  • Mega-cap
    50%
  • Large-cap
    50%

The split between mega-cap and large-cap stocks provides some level of internal diversification within the equity component of the portfolio. However, incorporating mid-cap or small-cap stocks could enhance growth potential and further diversify risks.

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.

Given the portfolio's current high-risk stance and reliance on two sectors, there's room for optimization towards the Efficient Frontier. This would involve diversifying across more assets and sectors to achieve a better risk-return balance, without necessarily sacrificing potential returns.

Dividends Info

  • Nike Inc 2.00%
  • Weighted yield (per year) 1.00%

The portfolio's dividend yield, driven by Nike's 2% dividend, contributes to the total return. While dividends provide a stream of income, the overall low yield reflects the growth-oriented nature of the portfolio. Investors seeking income might consider higher-dividend-yielding securities.

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