A heavily concentrated portfolio with a dominant position in Walmart Inc

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor with a high-risk tolerance, seeking aggressive growth and comfortable with significant concentration in a single stock. The investor likely has a long-term horizon, willing to endure potential volatility for the chance of substantial returns. This type of investor prioritizes capital appreciation over diversification, understanding the risks associated with a concentrated strategy. They are typically confident in their primary investment choice and prepared to manage the inherent risk of limited diversification.

Positions

  • Walmart Inc
    WMT - US9311421039
    91.00%
  • REX FANG & Innovation Equity Premium Income ETF
    FEPI
    5.00%
  • Ford Motor Company
    F - US3453708600
    1.00%
  • Nordic American Tankers Limited
    NAT - BMG657731060
    1.00%
  • NEOS Nasdaq 100 High Income ETF
    QQQI
    1.00%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF
    SPYI
    1.00%

The portfolio is overwhelmingly concentrated, with Walmart Inc making up 91% of the total allocation. This leaves little room for diversification, as the remaining 9% is spread across a few stocks and ETFs. Compared to a typical benchmark, which might have a more balanced allocation across multiple sectors and asset classes, this portfolio is heavily skewed. Such concentration can lead to heightened risk, as the portfolio's performance is largely dependent on Walmart's success. To mitigate this risk, consider diversifying by gradually introducing other stocks or ETFs that align with your investment goals.

Warning The historical data covers less than 2 years, which reduces the confidence in the calculated values.

Growth Info

Historically, the portfolio has performed well, with a CAGR of 39.56%. This impressive growth rate suggests strong returns over the period analyzed. However, it also experienced a maximum drawdown of -19.03%, indicating significant volatility. This performance outpaces many benchmarks, but it's crucial to remember that past performance doesn't guarantee future results. The portfolio's heavy reliance on Walmart could mean that its historical success may not be replicated if Walmart's performance falters. Diversifying could help stabilize returns and reduce the potential impact of a single asset's downturn.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

The Monte Carlo simulation, which uses historical data to estimate potential future outcomes, suggests varied results for this portfolio. With a 5th percentile return of -67.1% and a 67th percentile return of 108.6%, outcomes range widely. While 645 of the simulations showed positive returns, the annualized return across all simulations was 5.74%. This variability highlights the uncertainty inherent in relying on historical data for future projections. To improve potential outcomes, consider diversifying the portfolio further, which could help smooth returns and reduce the risk of significant losses.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

This portfolio is entirely composed of stocks, lacking exposure to other asset classes such as bonds or real estate. While stocks can offer substantial growth potential, they also introduce volatility. A more diversified allocation across asset classes could provide greater stability and reduce overall portfolio risk. For instance, bonds typically offer lower returns but can act as a buffer during market downturns. By incorporating different asset classes, you can better manage risk and potentially enhance long-term returns.

Sectors Info

  • Consumer Staples
    91%
  • Technology
    4%
  • Consumer Discretionary
    2%
  • Telecommunications
    1%
  • Energy
    1%
  • Health Care
    0%
  • Financials
    0%
  • Industrials
    0%
  • Utilities
    0%
  • Basic Materials
    0%
  • Real Estate
    0%

The portfolio is heavily weighted towards the Consumer Defensive sector, primarily due to the large allocation in Walmart Inc. This sector concentration may limit the portfolio's ability to capitalize on growth opportunities in other areas like technology or healthcare. While Consumer Defensive stocks can provide stability, particularly during economic downturns, they may not offer the same growth potential as other sectors. Consider gradually increasing exposure to a broader range of sectors to enhance diversification and capture potential growth across different market conditions.

Regions Info

  • North America
    99%
  • Unknown
    1%
  • Europe Developed
    0%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Asia Developed
    0%

Geographically, the portfolio is almost entirely focused on North America, with 99% of assets allocated to this region. This lack of international diversification could expose the portfolio to regional economic risks and limit potential growth opportunities in other markets. By incorporating assets from different geographic regions, such as Europe or Asia, you can diversify economic and currency risks. This broader exposure can help balance the portfolio and provide opportunities for growth in emerging and developed markets outside North America.

Market capitalization Info

  • Mega-cap
    95%
  • Large-cap
    4%
  • Small-cap
    1%
  • Mid-cap
    0%

The portfolio is predominantly invested in mega-cap stocks, with 95% of the allocation in this category. While mega-cap stocks often provide stability and lower risk, they may not offer the same growth potential as smaller companies. By diversifying into small and mid-cap stocks, you can enhance the portfolio's growth prospects and benefit from the agility and innovation often found in smaller companies. This diversification can help balance the risk-return profile and provide a more well-rounded investment strategy.

Dividends Info

  • Ford Motor Company 7.50%
  • REX FANG & Innovation Equity Premium Income ETF 31.00%
  • Nordic American Tankers Limited 13.80%
  • NEOS Nasdaq 100 High Income ETF 14.30%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF 12.90%
  • Walmart Inc 0.70%
  • Weighted yield (per year) 2.67%

The portfolio's dividend yield is 2.67%, with notable contributions from Ford Motor Company and the ETFs. Dividends can provide a steady income stream, which is beneficial for reinvestment or income generation. However, the overall yield is modest, given the portfolio's composition. To enhance income potential, consider increasing exposure to high-dividend-paying stocks or ETFs, while ensuring that these additions align with your overall investment strategy. A balanced approach can help maintain growth while boosting income.

Ongoing product costs Info

  • REX FANG & Innovation Equity Premium Income ETF 0.65%
  • NEOS Nasdaq 100 High Income ETF 0.68%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF 0.68%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is low at 0.05%, which is favorable for long-term returns. Low costs mean more of your investment returns are retained, contributing positively to overall performance. The ETFs in the portfolio have slightly higher expense ratios, but they are not significant enough to drastically impact returns. Maintaining a focus on cost-efficient investments can enhance net returns over time. Regularly reviewing and managing costs is a prudent strategy to maximize investment outcomes.

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.

The portfolio's current asset allocation does not align with the Efficient Frontier, which represents the optimal risk-return balance. By adjusting the allocation among existing assets, you could potentially achieve a better risk-return ratio. Optimization involves reallocating investments to minimize risk for a given level of expected return. Consider using portfolio optimization tools to explore different allocation scenarios that could enhance performance while managing risk. This approach ensures that the portfolio is structured to achieve the best possible outcomes given your risk tolerance.

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