A growth-focused portfolio with significant technology exposure and strong historical returns

Report created on Jan 11, 2025

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 stocks, with over 99% of assets in this class, primarily through ETFs like SPDR S&P 500 and Invesco QQQ. This composition reflects a growth-oriented strategy, seeking capital appreciation over income. Compared to a typical balanced portfolio, this allocation is more aggressive, which aligns with the growth profile but may expose the investor to higher volatility. Consider introducing more asset classes, such as bonds or real estate, to diversify risk and potentially stabilize returns during market downturns.

Growth Info

Historically, the portfolio has shown impressive performance with a CAGR of 21.02%, outperforming many benchmarks. However, it also experienced a maximum drawdown of -32.6%, indicating significant volatility. This performance suggests that while the portfolio has potential for high returns, it also carries substantial risk during market declines. Investors should be prepared for such fluctuations and consider strategies like rebalancing or diversifying to manage downside risk while maintaining growth potential.

Projection Info

The Monte Carlo simulation, which uses historical data to forecast future outcomes, shows a wide range of potential returns, with the median at 686.15%. While the simulation suggests a high likelihood of positive returns, with 905 out of 1,000 simulations yielding gains, it also highlights potential losses, with the 5th percentile at -43.84%. Remember, these projections are not guarantees and the actual outcomes may vary due to unforeseen market conditions. Regularly updating projections can help in making informed adjustments to the portfolio.

Asset classes Info

  • Stocks
    100%

The portfolio is predominantly invested in stocks, with minimal cash holdings. This concentration in equities aims for capital growth but lacks the diversification benefits that bonds or alternative assets might provide. Compared to a balanced portfolio, which typically includes a mix of stocks and bonds, this allocation is more aggressive. Introducing other asset classes could help mitigate risk and provide more stability, especially during periods of stock market volatility.

Sectors Info

  • Technology
    43%
  • Consumer Discretionary
    18%
  • Telecommunications
    10%
  • Financials
    9%
  • Health Care
    6%
  • Industrials
    5%
  • Utilities
    4%
  • Consumer Staples
    2%
  • Energy
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

Technology dominates the sector allocation, making up over 42% of the portfolio, followed by consumer cyclicals and communication services. This tech-heavy focus can lead to higher volatility, especially in times of regulatory changes or tech sector downturns. While the growth potential is significant, consider diversifying into other sectors like healthcare or utilities to balance out risks and take advantage of different economic cycles. Such diversification can enhance long-term stability and performance.

Regions Info

  • North America
    89%
  • Asia Emerging
    8%
  • Europe Developed
    3%

The portfolio is heavily concentrated in North American assets, with 89% exposure, and limited international diversification. This geographic bias can increase vulnerability to regional economic downturns or political changes. Expanding exposure to emerging markets or developed regions like Europe could enhance diversification and capture growth opportunities globally. Aligning geographic allocation with global benchmarks can help mitigate regional risks and improve overall portfolio resilience.

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 current portfolio could be optimized for a better risk-return balance using the Efficient Frontier concept. This involves reallocating existing assets to achieve an expected return of 33.19% with the same risk level. While the portfolio is already performing well, exploring optimization strategies can help maximize returns without increasing risk. Remember, efficiency focuses on the best risk-return ratio, so adjustments should align with your overall investment objectives and risk tolerance.

Dividends Info

  • AstraZeneca PLC ADR 2.20%
  • Delta Air Lines Inc 0.70%
  • Ford Motor Company 8.10%
  • Meta Platforms Inc. 0.30%
  • Microsoft Corporation 0.70%
  • Invesco QQQ Trust 0.60%
  • Starbucks Corporation 2.50%
  • Southern Company 3.50%
  • SPDR S&P 500 ETF Trust 0.90%
  • Taiwan Semiconductor Manufacturing 1.10%
  • Weighted yield (per year) 1.09%

The portfolio's dividend yield is relatively low at 1.09%, which is typical for a growth-focused strategy prioritizing capital appreciation. Stocks like Ford and Southern Company contribute higher yields, adding some income potential. While dividends are not the primary focus here, they can provide a cushion during market volatility. Consider whether increasing dividend-paying stocks aligns with your investment goals, particularly if seeking more steady income alongside growth.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • SPDR S&P 500 ETF Trust 0.10%
  • Weighted costs total (per year) 0.05%

The portfolio's costs are low, with a total expense ratio (TER) of 0.05%, supporting better long-term performance by minimizing drag on returns. Low costs are a positive feature, as they allow more of the portfolio's returns to compound over time. While the current cost structure is efficient, regularly reviewing fees and exploring lower-cost options can further enhance net returns. Maintaining this cost discipline is a key factor in achieving long-term investment success.

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