A growth-focused portfolio with strong tech presence and moderate international diversification

Report created on Dec 13, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of ETFs and individual stocks, with a significant emphasis on equities. The Vanguard Total Stock Market Index Fund ETF Shares holds the largest portion at 55%, followed by the Vanguard Total International Stock Index Fund ETF Shares at 20%. Invesco QQQ Trust and individual tech stocks like Apple, NVIDIA, and Tesla make up the rest. This structure suggests a strong focus on broad market exposure and growth, particularly in the tech sector. While this composition offers growth potential, it also exposes the portfolio to market volatility. Balancing this with other asset types could improve stability.

Growth Info

Historically, this portfolio has performed well, with a compound annual growth rate (CAGR) of 18.57%. However, it's important to note the significant max drawdown of 48.31%, indicating susceptibility to market downturns. The concentration in high-growth stocks can lead to impressive returns, but also increases risk during market corrections. Understanding these dynamics is crucial for setting realistic expectations. To mitigate risk, consider incorporating more defensive assets or increasing cash reserves, especially if nearing a financial goal or during uncertain economic times.

Projection Info

Using Monte Carlo simulations, potential future outcomes for this portfolio were projected based on historical data. With 1,000 simulations, the median expected growth is 3,511.29%, while the 5th percentile shows a lower bound of 288.14%. These simulations provide a range of possible future performances, though they rely on historical data, which may not predict future market conditions accurately. It's essential to regularly review the portfolio against changing market trends and personal financial goals, adjusting allocations as necessary to align with desired risk levels and outcomes.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, making up over 99% of the total allocation. This focus on equities is typical for a growth-oriented strategy, aiming for high returns. However, such concentration can lead to increased volatility. Diversifying into other asset classes, such as bonds or real estate, could provide more stability and reduce risk. A balanced mix of asset classes can help cushion against market swings and offer more consistent returns over time, aligning with long-term financial goals.

Sectors Info

  • Technology
    35%
  • Consumer Discretionary
    14%
  • Financials
    12%
  • Health Care
    9%
  • Industrials
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Technology dominates the sector allocation at 34.63%, reflecting a strong growth focus. Other significant sectors include consumer cyclicals, financial services, and healthcare. While this concentration in tech can drive high returns, it also poses sector-specific risks, such as regulatory changes or technological disruptions. Diversifying into less volatile sectors like consumer defensive or utilities might reduce risk and enhance portfolio resilience. A more balanced sector allocation can help navigate varying economic cycles and market conditions.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

The portfolio is predominantly exposed to North America, accounting for 81.05% of its geographic allocation. While this provides stability through mature markets, it limits exposure to growth opportunities in emerging markets. Geographic diversification can reduce region-specific risks and tap into global growth trends. Consider increasing allocations to underrepresented regions like Asia or Latin America to capture potential growth and mitigate the impact of localized economic downturns. A well-rounded geographic distribution can enhance long-term returns.

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 Efficient Frontier concept suggests that this portfolio could potentially be optimized for a better risk-return ratio. By adjusting the current asset allocations, it might be possible to achieve a more efficient balance. This doesn't necessarily mean adding new assets, but rather tweaking the proportions of existing ones to maximize returns for a given level of risk. Regularly assessing the portfolio's position on the Efficient Frontier can guide strategic adjustments, ensuring alignment with financial goals and risk tolerance.

Dividends Info

  • Apple Inc 0.40%
  • Invesco QQQ Trust 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.34%

The portfolio's dividend yield stands at 1.34%, with contributions from various holdings, including Vanguard ETFs and Apple. While dividends provide a steady income stream, the focus here is primarily on growth rather than income. Investors seeking higher income might consider increasing exposure to high-dividend stocks or dividend-focused ETFs. Balancing growth and income can cater to different financial needs and enhance overall portfolio stability, particularly in volatile markets or during retirement planning.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The total expense ratio (TER) of the portfolio is relatively low at 0.05%, thanks to the inclusion of low-cost ETFs like Vanguard. Keeping costs minimal is crucial for maximizing long-term returns, as high fees can erode gains over time. Regularly reviewing and optimizing costs by comparing with other investment options can ensure that you're getting the best value. Consider rebalancing or switching to lower-cost alternatives if available, to maintain cost efficiency and improve net returns.

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