A balanced portfolio with strong dividend focus and moderate geographic diversification

Report created on Jan 1, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is evenly split across four ETFs, each accounting for 25% of the total. This structure ensures a balanced approach, with a focus on dividend growth and large-cap stocks. While this provides stability, it may limit exposure to smaller, potentially higher-growth opportunities. A common benchmark for balanced portfolios includes a mix of stocks and bonds, suggesting a potential gap in fixed income exposure here. Consider diversifying by adding other asset classes like bonds to reduce risk and enhance stability.

Growth Info

Historically, the portfolio has performed well with a CAGR of 13.42%, indicating strong growth over time. This is impressive compared to typical market benchmarks, which often yield lower annualized returns. However, the max drawdown of -32.73% highlights vulnerability during market downturns. This indicates a need for caution, especially in volatile markets. While past performance is no guarantee of future results, maintaining a diversified approach and regularly reviewing asset allocation can help manage risk.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, with a 50th percentile return of 429.66%. This method uses historical data to estimate future performance, but it's important to note that these are not predictions and come with inherent uncertainties. The 97.37% return at the 5th percentile and 649.64% at the 67th percentile highlight the variability of potential outcomes. Regularly reviewing and adjusting the portfolio to align with changing market conditions can help improve the likelihood of achieving desired returns.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99.48% in equities. This high concentration can lead to significant growth potential but also increases exposure to market volatility. A more balanced allocation typically includes bonds or other asset classes to mitigate risk. Consider introducing fixed income or alternative investments to enhance diversification and reduce overall portfolio risk. This can lead to more stable returns, especially during periods of market stress.

Sectors Info

  • Technology
    27%
  • Financials
    13%
  • Health Care
    12%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Consumer Staples
    8%
  • Telecommunications
    8%
  • Energy
    6%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio has a notable concentration in the technology sector, accounting for 26.91% of the total allocation. This is higher than typical benchmark allocations, which may lead to increased volatility, especially during periods of tech sector downturns. While tech stocks can drive growth, it's important to maintain sector balance to mitigate risk. Diversifying into underrepresented sectors like utilities or real estate could provide stability and reduce overall portfolio risk.

Regions Info

  • North America
    91%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    1%
  • Asia Developed
    1%

The portfolio is heavily concentrated in North America, with 91.2% exposure, limiting geographic diversification. This can increase vulnerability to regional economic downturns. Common benchmarks often have more balanced geographic allocations, including greater exposure to emerging markets. Consider increasing investments in regions like Asia or Europe to enhance diversification and capture growth opportunities in different economic environments. This can help reduce regional risks and improve overall portfolio resilience.

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 could be optimized using the Efficient Frontier, a concept that identifies the best possible risk-return ratio. This approach involves adjusting asset weights to achieve maximum returns for a given level of risk. While the portfolio is balanced, exploring optimization opportunities could enhance performance without significantly increasing risk. Regularly reviewing and rebalancing the portfolio can ensure it remains aligned with the investor's risk tolerance and financial goals.

Dividends Info

  • WisdomTree U.S. Quality Dividend Growth Fund 1.50%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total World Stock Index Fund ETF Shares 2.00%
  • Weighted yield (per year) 1.88%

With a total dividend yield of 1.88%, the portfolio provides a reasonable income stream, particularly from the Schwab U.S. Dividend Equity ETF, which yields 3.6%. Dividends can offer a steady income and help cushion against market volatility. However, the focus on dividend-paying stocks may limit growth potential. Consider balancing dividend-focused investments with growth-oriented assets to achieve a more comprehensive return profile, catering to both income and capital appreciation needs.

Ongoing product costs Info

  • WisdomTree U.S. Quality Dividend Growth Fund 0.28%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) is 0.11%, which is impressively low. This cost efficiency supports better long-term performance by minimizing the drag on returns. Low costs are a significant advantage in maintaining portfolio value over time. Continue to monitor expense ratios and seek opportunities to reduce costs further if possible, such as switching to lower-cost funds or negotiating fees with financial service providers. Keeping costs low is a key component of successful investing.

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