Balanced Growth Portfolio with Strong Diversification and High Risk Suitable for Growth-Oriented Investors

Report created on Dec 3, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is a blend of ETFs and individual stocks, with a significant 33% allocation in the Vanguard Total Stock Market Index Fund ETF. This indicates a strong focus on the U.S. stock market. Another noteworthy allocation is the 14% in TG Therapeutics Inc, showing a tilt towards high-growth potential. The inclusion of both domestic and international ETFs highlights an attempt at diversification. This composition suggests a growth-oriented strategy, aiming for capital appreciation. To further strengthen this portfolio, consider balancing the concentration in individual stocks with broader market indices.

Growth Info

Historically, the portfolio has shown impressive performance with a CAGR of 30.5%. This suggests that the portfolio has experienced substantial growth over time. However, the maximum drawdown of -47.42% indicates significant volatility and risk. This performance pattern is typical for growth-focused portfolios, which can experience sharp declines during market downturns. While the high returns are attractive, it's essential to consider the corresponding risk. To manage this, one could consider diversifying further into lower-risk assets to smooth out volatility.

Projection Info

Using a Monte Carlo simulation, which models potential future outcomes by running thousands of random trials, the portfolio shows promising future potential. With a median (50th percentile) projected return of 1,820.37%, the portfolio could continue to deliver strong results. However, the range of outcomes is broad, with the 5th percentile at 6.86%, indicating potential for much lower returns in adverse scenarios. This highlights the importance of risk management. To optimize future outcomes, maintaining a balanced risk-reward profile is crucial.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.7% of the allocation, showcasing a strong equity focus. This allocation aligns with a growth strategy, as stocks typically offer higher returns over the long term compared to other asset classes. The minimal allocation to cash and other assets suggests a willingness to accept higher volatility for the potential of greater returns. To reduce risk, consider diversifying into other asset classes like bonds, which can provide stability and income, especially during market downturns.

Sectors Info

  • Health Care
    30%
  • Technology
    25%
  • Financials
    11%
  • Consumer Discretionary
    9%
  • Industrials
    7%
  • Telecommunications
    6%
  • Energy
    4%
  • Consumer Staples
    3%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Utilities
    1%

Sector allocation is diverse, with a significant 30% in healthcare and 24% in technology, reflecting a focus on high-growth industries. This diversity across sectors helps mitigate sector-specific risks and capitalizes on different growth opportunities. However, the concentration in healthcare and technology could expose the portfolio to sector-specific volatility. To further enhance sector diversification, consider balancing allocations across more stable sectors like consumer defensive or utilities, which can provide a buffer during economic downturns.

Regions Info

  • North America
    88%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is heavily concentrated in North America, with 87.5% of the allocation, indicating a strong home bias. While this can benefit from familiarity and reduced currency risk, it also limits exposure to international growth opportunities. The small allocations to Europe, Asia, and other regions provide some diversification but are minimal. To capture global growth and reduce regional risk, consider increasing exposure to emerging markets or developed economies outside North America, which can provide diversification benefits.

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 is well-positioned on the efficient frontier, balancing risk and return for growth. However, there's room for optimization by adjusting the asset mix to better align with personal risk tolerance. Moving towards riskier allocations could potentially increase returns but also volatility. Conversely, incorporating more conservative assets like bonds could reduce risk but may lower potential returns. To optimize further, consider reviewing asset correlations and diversifying into less correlated assets, enhancing the portfolio's risk-return profile.

Dividends Info

  • Apple Inc 0.40%
  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Bristol-Myers Squibb Company 4.00%
  • Alphabet Inc Class A 0.20%
  • Eli Lilly and Company 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.10%

The portfolio has a moderate dividend yield of 1.1%, with contributions from several holdings like the Vanguard Total International Stock Index Fund ETF at 3% and Bristol-Myers Squibb Company at 4%. While the focus appears to be on growth, these dividends provide a steady income stream, which can be reinvested for compounding returns. To enhance income, consider increasing allocations to dividend-paying stocks or funds. However, be mindful of balancing growth and income to align with long-term investment goals.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • 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%

With a Total Expense Ratio (TER) of 0.05%, the portfolio is cost-efficient, which is beneficial for long-term returns. Low costs help maximize net returns by reducing the drag on performance. The Vanguard Total Stock Market Index Fund ETF, with a low expense ratio of 0.03%, exemplifies this cost-effective approach. Keeping investment costs low is crucial for compounding wealth over time. To maintain this efficiency, regularly review and compare fund expenses, ensuring that the portfolio remains cost-competitive without sacrificing quality.

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