A cautious portfolio with balanced asset classes and a focus on U.S. equities

Report created on Apr 11, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio comprises four ETFs: Vanguard Total Stock Market (50%), SPDR Gold Shares (30%), Vanguard Total Bond Market (10%), and Vanguard Total International Stock (10%). This structure leans heavily on U.S. equities, with a significant allocation to gold for stability. The combination of stocks, bonds, and gold provides a balanced approach, though the international exposure is limited. This allocation suits a cautious investor seeking moderate growth with a focus on stability. While the portfolio is well-diversified across asset classes, considering a slight increase in international equities could enhance global diversification.

Growth Info

Historically, the portfolio has achieved a CAGR of 9.85%, meaning it has grown at an average annual rate of 9.85% over a set period. This is a solid performance, especially given the relatively low-risk profile. The maximum drawdown of -23.97% indicates the largest peak-to-trough decline, which is moderate and expected for a balanced portfolio. Comparing this to benchmarks, the portfolio has performed well, maintaining stability during downturns. Despite the solid performance, remember that past results don't guarantee future success. Continue monitoring market conditions to ensure alignment with your financial goals.

Projection Info

Monte Carlo simulations, which use historical data to project potential future outcomes, show a median portfolio growth of 146.3%. This means that, on average, the portfolio could grow by this percentage over the simulation period. The simulations indicate a 7.54% annualized return, with 954 out of 1,000 simulations showing positive returns. While these projections are promising, they rely on historical data and can't predict future market conditions with certainty. Regular portfolio reviews and adjustments based on changing market dynamics can help maintain alignment with your investment goals.

Asset classes Info

  • Stocks
    60%
  • Other
    30%
  • Bonds
    10%
  • Cash
    1%

The portfolio's asset allocation includes 60% stocks, 30% in gold (categorized as 'Other'), and 10% bonds. This blend offers a mix of growth potential and stability. Stocks provide growth, bonds offer income and stability, while gold acts as a hedge against inflation and market volatility. Compared to typical benchmarks, the high allocation to gold is unique, offering a defensive stance. While this allocation is well-balanced, consider periodically reviewing the asset mix to ensure it continues to align with your risk tolerance and investment objectives.

Sectors Info

  • Technology
    17%
  • Financials
    9%
  • Consumer Discretionary
    6%
  • Health Care
    6%
  • Industrials
    6%
  • Telecommunications
    5%
  • Consumer Staples
    3%
  • Energy
    2%
  • Real Estate
    2%
  • Basic Materials
    2%
  • Utilities
    2%

The portfolio's sector allocation shows a notable concentration in technology (17%), followed by financial services (9%) and consumer cyclicals (6%). While tech-heavy portfolios can offer high growth potential, they may also experience increased volatility, especially during interest rate hikes. The sectoral diversification aligns closely with common benchmarks, providing exposure to various economic sectors. This balance is advantageous for risk management. However, ensure the sector weights align with your risk tolerance and market outlook, adjusting as necessary to capitalize on emerging trends or mitigate sector-specific risks.

Regions Info

  • North America
    51%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%

With 51% exposure to North America, the portfolio is heavily weighted towards U.S. equities, offering stability and growth potential. However, international exposure is limited, with only 4% in Europe Developed and minimal allocations in other regions. This geographic concentration might miss out on growth opportunities in emerging markets. While the U.S. market has been strong, diversifying geographically could reduce regional risk and enhance returns. Consider increasing allocations to international markets, especially those with high growth potential, to balance the portfolio's geographic exposure.

Market capitalization Info

  • No data
    30%
  • Mega-cap
    25%
  • Large-cap
    18%
  • Mid-cap
    11%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization distribution includes 25% in mega-cap, 18% in big-cap, and smaller allocations in medium, small, and micro-caps. This mix provides a balance between stability and growth. Mega-cap stocks offer stability, while smaller caps can provide growth opportunities. However, 30% of the portfolio is categorized as 'Unknown', likely due to the gold allocation. This distribution aligns with benchmark norms, providing a diversified approach. Regularly review the market cap distribution to ensure it aligns with your risk tolerance and market outlook, making adjustments as necessary.

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 could potentially be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio for a given set of assets. This means adjusting allocations to achieve the maximum return for a given level of risk. The current asset mix is balanced, but exploring optimization could enhance performance. It's important to note that optimization focuses on risk-return balance, not necessarily diversification or other goals. Consider consulting with a financial advisor to explore optimization strategies and ensure alignment with your overall investment objectives.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.50%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 1.42%

The portfolio's total dividend yield is 1.42%, with contributions from the Vanguard Total Bond Market (3.40%) and Vanguard Total International Stock (3.30%). Dividends provide a steady income stream, which can be particularly valuable for cautious investors seeking stability. While the yield is modest, it aligns with the portfolio's balanced approach. Ensure the dividend income aligns with your financial goals and consider reinvesting dividends to enhance long-term growth. Regularly review dividend yields and adjust allocations if necessary to optimize income and growth potential.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • SPDR® Gold Shares 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) is 0.14%, which is impressively low. This cost efficiency supports better long-term performance, as lower fees mean more of your returns stay in your pocket. The Vanguard ETFs are particularly cost-effective, contributing to the portfolio's overall low costs. Keeping costs low is crucial for maximizing returns, especially over the long term. While the current cost structure is highly efficient, continue monitoring expense ratios and consider cost-effective alternatives if necessary to maintain this advantage.

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