A growth-oriented portfolio with strong North American focus and moderate sector diversification

Report created on Jan 2, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of individual stocks, with a significant allocation to ETFs. The Vanguard S&P 500 ETF makes up 18% of the portfolio, while individual stocks like Citigroup, PayPal, and Alphabet hold substantial positions. Compared to typical growth portfolios, this one leans heavily on equities with minimal cash holdings. This composition suggests a focus on capital appreciation rather than income generation. To enhance diversification, consider increasing exposure to other asset classes like bonds or international equities, which could provide stability during market volatility.

Growth Info

Historically, the portfolio has demonstrated strong performance with a compound annual growth rate (CAGR) of 17.38%. This indicates a robust growth trajectory, significantly outperforming many standard benchmarks. However, the maximum drawdown of -33.85% highlights its susceptibility to market downturns. This volatility is typical for growth-oriented portfolios, which often prioritize high returns over stability. While past performance is not indicative of future results, maintaining a diversified approach could help mitigate potential losses in turbulent markets.

Projection Info

Monte Carlo simulations, which use historical data to predict future outcomes, suggest a wide range of potential returns for this portfolio. The median expected return is 515.21%, with a significant probability of positive outcomes. However, the 5th percentile projects a -41.01% return, underscoring the inherent risk. While simulations provide valuable insights, they are not guarantees. To manage risk, consider periodic reviews and adjustments to align with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, comprising over 99% of the allocation, with negligible cash holdings. This concentration in equities aligns with a growth-focused strategy but limits diversification. Compared to typical balanced portfolios, which might include bonds or other asset classes, this portfolio could benefit from broader asset diversification. Incorporating fixed income or alternative investments could reduce volatility and provide more consistent returns over time.

Sectors Info

  • Financials
    35%
  • Telecommunications
    14%
  • Industrials
    12%
  • Real Estate
    10%
  • Technology
    9%
  • Consumer Discretionary
    9%
  • Energy
    4%
  • Health Care
    3%
  • Consumer Staples
    2%

Sector-wise, the portfolio is predominantly invested in financial services, which constitutes over 35% of the total allocation. This heavy concentration suggests a potential vulnerability to sector-specific risks, such as regulatory changes or economic downturns affecting financial institutions. While sectors like technology and real estate are also represented, diversifying further into underrepresented areas like healthcare or consumer defensive could enhance stability and reduce sector-specific risks.

Regions Info

  • North America
    95%
  • No data
    5%

Geographically, the portfolio is overwhelmingly focused on North America, with nearly 95% exposure. This concentration limits the benefits of international diversification, which can help mitigate region-specific risks and capitalize on global growth opportunities. Compared to typical global benchmarks, this allocation is heavily skewed. To enhance geographic diversification, consider adding exposure to developed and emerging markets outside North America, which could offer additional growth potential.

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's current risk-return profile could be optimized further. Efficient Frontier analysis suggests that a more efficient portfolio, with the same risk level, could achieve a higher expected return of 35.11%. This optimization involves adjusting the current asset allocations to achieve the best possible risk-return ratio. While efficiency focuses on maximizing returns for a given risk, it's crucial to balance this with diversification and personal investment goals. Regularly reassessing the portfolio's alignment with these objectives can ensure continued optimization.

Dividends Info

  • Atkore International Group Inc 1.50%
  • Citigroup Inc 3.10%
  • Salesforce.com Inc 0.40%
  • Alphabet Inc Class C 0.30%
  • Goldman Sachs Group Inc 2.00%
  • Meta Platforms Inc. 0.30%
  • Realty Income Corp 5.40%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • VICI Properties Inc 4.30%
  • Vanguard S&P 500 ETF 1.20%
  • Western Midstream Partners LP 8.30%
  • Weighted yield (per year) 1.66%

The portfolio's dividend yield stands at 1.66%, with contributions from stocks like Realty Income Corp and Western Midstream Partners LP. While the yield is modest, it provides a supplementary income stream, which can be reinvested for compounding growth. For growth-focused investors, dividends may not be the primary concern, but maintaining a balance between growth and income can enhance overall returns. Consider evaluating the dividend potential of current holdings and exploring high-yield alternatives if income generation becomes a priority.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.01%

The portfolio benefits from impressively low costs, with the Schwab U.S. Dividend Equity ETF and Vanguard S&P 500 ETF having expense ratios of 0.06% and 0.03%, respectively. The overall total expense ratio (TER) is minimal, supporting better long-term performance by reducing the drag on returns. Keeping costs low is advantageous, but it's essential to ensure that low-cost options align with your investment goals. Periodically review cost structures to identify any high-fee assets that could be replaced with more cost-effective alternatives.

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