This portfolio has only about 4.8 years 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.

High-Growth Portfolio with Broad Diversification and Strong Historic Performance

Report created on Jul 24, 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 composed of six positions, with a mix of large-cap stocks and ETFs. Each position holds an equal weight of approximately 16.67%. This setup ensures broad diversification across various sectors and asset classes. Having a mix of individual stocks and ETFs helps in balancing the risk and potential returns. Diversification is a crucial aspect of risk management, and this portfolio achieves it effectively by spreading investments across multiple sectors and asset classes.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 12.06%, which is quite impressive. However, it has also experienced a significant maximum drawdown of -42.09%. This indicates that while the portfolio has the potential for high returns, it is also susceptible to considerable volatility. Understanding this helps in setting realistic expectations and preparing for potential market downturns. To mitigate such risks, it might be wise to consider adding more stable, low-volatility assets.

Projection Info

Using a Monte Carlo simulation with 1,000 runs, the portfolio's future performance was projected. A Monte Carlo simulation uses random sampling to predict the probability of different outcomes. Assuming a hypothetical initial investment, the median return (50th percentile) is 399.74%, while the 67th percentile shows a return of 733.1%. The 5th percentile indicates a potential loss of -8.9%. This range of outcomes highlights the portfolio's potential for high returns but also underscores the importance of being prepared for less favorable scenarios.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, comprising 99.51% of the total assets. There is a minimal allocation to cash and other asset classes. This high concentration in stocks aligns with the growth objective but also increases the portfolio's risk. Stocks are known for their higher volatility compared to other asset classes like bonds or cash. To reduce risk, it might be beneficial to diversify into other asset classes, such as bonds, which can provide more stability.

Sectors Info

  • Financials
    44%
  • Energy
    21%
  • Industrials
    9%
  • Consumer Discretionary
    7%
  • Technology
    5%
  • Basic Materials
    3%
  • Health Care
    3%
  • Consumer Staples
    3%
  • Real Estate
    2%
  • Telecommunications
    1%
  • Utilities
    1%

The portfolio is diversified across various sectors, with a significant allocation to Financial Services (43.68%) and Energy (21.18%). Other sectors like Industrials, Consumer Cyclicals, and Technology are also represented but to a lesser extent. Sector diversification helps in spreading risk and capturing growth opportunities across different parts of the economy. To further enhance this diversification, consider rebalancing to ensure no single sector is overly dominant, which can reduce sector-specific risks.

Regions Info

  • North America
    84%
  • Europe Developed
    7%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Latin America
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is predominantly allocated to North America (84.08%), with smaller exposures to Europe, Japan, and emerging markets. This heavy concentration in North America could be a risk if the region underperforms. Geographic diversification is essential for mitigating regional risks and taking advantage of growth opportunities in different parts of the world. Increasing the allocation to international markets could provide a more balanced geographic exposure.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Chevron Corp 4.10%
  • JPMorgan Chase & Co 2.10%
  • SPDR® S&P MIDCAP 400 ETF Trust 1.20%
  • Visa Inc. Class A 0.80%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 2.13%

The current portfolio composition suggests a focus on growth rather than income, as the dividend yield is not a significant component. While growth stocks and ETFs can offer substantial capital appreciation, they may not provide consistent income. For investors seeking regular income, incorporating dividend-paying stocks or ETFs could be a valuable addition. This can provide a steady income stream and potentially enhance total returns through reinvested dividends.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • SPDR® S&P MIDCAP 400 ETF Trust 0.24%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is relatively low at 0.09%, which is beneficial for long-term returns. Lower costs mean more of the investment returns stay in the portfolio, rather than being eroded by fees. Keeping investment costs low is a fundamental principle of sound investing. Regularly reviewing and minimizing fees can significantly impact the portfolio's performance over time. Consider maintaining this low-cost approach while exploring other investment opportunities.

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