This portfolio has only about 11 months of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.
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A cautious portfolio with strong U.S. focus and limited diversification across sectors and asset classes

Report created on Dec 16, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is composed of five ETFs, with a significant focus on U.S. equities. The Schwab U.S. Dividend Equity ETF and Vanguard S&P 500 ETF each make up 33% of the portfolio, providing a stable core. The Invesco NASDAQ 100 ETF and Schwab U.S. Large-Cap Growth ETF add growth potential, representing 15% each. A small 4% allocation to the Fidelity Wise Origin Bitcoin Trust introduces some alternative asset exposure. This composition reflects a heavy reliance on U.S. equities, which can offer growth but may lack diversification benefits from other markets or asset classes.

Growth Info

Historically, the portfolio has shown impressive performance with a compound annual growth rate (CAGR) of 28.34%. This indicates strong past returns, likely driven by the robust performance of U.S. equities. However, the max drawdown of -8.23% suggests that while the portfolio has been successful, it is not immune to market downturns. Historical performance can provide insights, but it's important to remember that past results do not guarantee future returns. Investors should be cautious about relying solely on historical data when making future investment decisions.

Projection Info

A Monte Carlo simulation with 1,000 iterations projects potential future outcomes based on historical data. The median outcome suggests a significant potential return, with a 50th percentile projection of 24,266.67%. However, the simulation also shows a wide range of possible outcomes, highlighting the inherent uncertainty in investing. While the 5th percentile projects a much lower return, the 67th percentile suggests even greater gains. This underscores the importance of considering a range of scenarios when planning for the future, as market conditions can change unpredictably.

Asset classes Info

  • Stocks
    96%
  • Other
    4%

The portfolio is heavily weighted towards stocks, with 95.93% allocated to equities. This high concentration in a single asset class indicates a strong focus on growth, but it also increases exposure to equity market volatility. The small 4% allocation to other assets, such as Bitcoin, provides minimal diversification. To enhance risk management, it may be beneficial to consider diversifying into other asset classes, such as bonds or real estate, which can provide stability during market downturns and reduce overall portfolio risk.

Sectors Info

  • Technology
    29%
  • Financials
    12%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    9%
  • Consumer Staples
    7%
  • Industrials
    7%
  • Energy
    6%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation reveals a concentration in technology, which accounts for 29.32% of the portfolio. While technology has been a strong performer, this heavy reliance could increase vulnerability to sector-specific risks. Financial services, healthcare, and consumer cyclicals also have notable allocations, providing some balance. However, sectors like utilities and real estate are underrepresented. To improve diversification, consider increasing exposure to sectors with different economic drivers, which can help mitigate risks associated with any single sector's downturn.

Regions Info

  • North America
    95%
  • Europe Developed
    1%

Geographically, the portfolio is overwhelmingly concentrated in North America, with 95.20% of assets. This focus on U.S. markets can capitalize on domestic growth but may miss opportunities in other regions. Limited exposure to Europe, Latin America, and Asia suggests a potential area for improvement. Diversifying geographically can reduce risks associated with regional economic downturns and allow participation in global growth trends. Exploring opportunities in developed and emerging markets outside North America may enhance the portfolio's resilience and long-term growth potential.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The portfolio exhibits a high correlation between the Invesco NASDAQ 100 ETF and Schwab U.S. Large-Cap Growth ETF, indicating that these assets tend to move together. High correlation can reduce the benefits of diversification, as similar assets may react similarly to market events. To manage risk more effectively, consider adjusting allocations to include assets with lower correlations, which can provide a buffer against market volatility. This approach can help stabilize returns and reduce the impact of downturns in correlated assets.

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 allocation may benefit from optimization using the Efficient Frontier, which seeks the best risk-return trade-off. By adjusting the balance of existing assets, it's possible to enhance returns without increasing risk. However, it's important to address the high correlation between certain assets, as this can hinder optimization efforts. Focusing on diversification and reducing overlap can improve efficiency. While optimization can improve the risk-return profile, it should align with the investor's risk tolerance and financial goals.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.70%

The portfolio offers a total dividend yield of 1.7%, with the Schwab U.S. Dividend Equity ETF contributing the highest yield at 3.5%. Dividends can provide a steady income stream and enhance total returns, especially during periods of market volatility. While the yield is modest, it can still be a valuable component of overall performance. Investors seeking higher income may explore additional dividend-focused investments, or consider reinvesting dividends to compound growth over time, aligning with long-term wealth-building strategies.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is relatively low at 0.06%, indicating cost efficiency. Low costs are crucial for long-term investment success, as they allow more of the portfolio's returns to be retained. The Vanguard S&P 500 ETF and Schwab U.S. Large-Cap Growth ETF have particularly low expense ratios, contributing to overall cost-effectiveness. Investors should regularly review expense ratios and consider reallocating to lower-cost alternatives if available, as minimizing costs can significantly impact net returns over time.

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