A high-risk aggressive portfolio with strong growth potential and significant sector exposure

Report created on Jan 31, 2025

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is composed of three ETFs and one common stock, with each ETF making up 30% of the portfolio and the small cap ETF at 10%. This allocation leans heavily towards equities, reflecting a high-risk, high-reward strategy. The balance between international and domestic ETFs provides a degree of diversification, yet the significant stake in ProShares Ultra QQQ and Sirius XM Holding Inc suggests a strong domestic technology and communication services focus. Consider if this aligns with your risk tolerance and investment goals.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 14.37%. However, it also experienced a significant maximum drawdown of -42.41%, highlighting its volatility. This performance suggests high potential returns but also substantial risk. Comparing to a benchmark could provide further insights into performance relative to market indices. Ensure that your risk appetite can accommodate such volatility and consider whether the potential returns justify the risks.

Projection Info

Using Monte Carlo simulations, which predict future performance based on historical data, the portfolio shows a wide range of outcomes. The median projection is a 226% increase, but the 5th percentile predicts a -70.1% drop. This variability underscores the portfolio's risk. While historical data informs these projections, it's important to remember that past performance doesn't guarantee future results. Regularly review and adjust your portfolio to align with changing market conditions and personal goals.

Asset classes Info

  • Stocks
    96%
  • Cash
    4%

With 96% allocated to stocks and 4% to cash, the portfolio is heavily skewed towards equities. This high stock allocation can drive growth but also increases exposure to market volatility. Compared to typical benchmarks, this allocation is more aggressive. Consider whether this aligns with your risk tolerance and investment horizon. Diversifying into other asset classes like bonds or real estate could help mitigate risk and provide more stability during market downturns.

Sectors Info

  • Telecommunications
    36%
  • Technology
    20%
  • Financials
    9%
  • Consumer Discretionary
    9%
  • Industrials
    7%
  • Health Care
    4%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio is concentrated in communication services (36%) and technology (20%), which are known for growth but can be volatile. This sector concentration could lead to higher returns in bullish markets but also increased risk during downturns, especially if these sectors underperform. Diversifying into less represented sectors like healthcare or consumer defensives might reduce risk and provide more balanced growth. Ensure the sector allocation aligns with your investment strategy and risk profile.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (72%), with limited exposure to other regions. This concentration may benefit from the strong performance of U.S. markets but also increases vulnerability to regional economic downturns. Expanding exposure to emerging markets or underrepresented regions could enhance diversification and reduce geographic risk. Compare this geographic allocation to global benchmarks to ensure it aligns with your diversification goals.

Market capitalization Info

  • Mid-cap
    38%
  • Mega-cap
    25%
  • Large-cap
    17%
  • Small-cap
    6%
  • Micro-cap
    5%

The portfolio's market capitalization is diversified, with a significant portion in medium (38%) and mega-cap (25%) stocks. This mix provides a balance between stability and growth potential. However, the small (6%) and micro-cap (5%) allocations could add volatility. Consider whether this balance aligns with your risk tolerance. Adjusting the allocation to include more large-cap stocks might provide more stability, while increasing small-cap exposure could enhance growth potential.

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 can be optimized using the Efficient Frontier, which seeks the best risk-return balance. Currently, the allocation is aggressive, focusing on high-growth potential. Adjusting the weights of existing assets could improve the risk-return ratio. Remember, optimization doesn't guarantee diversification or meet all investment goals, but it can enhance efficiency. Regularly reassess the portfolio to ensure it remains aligned with your risk tolerance and financial objectives.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • ProShares Ultra QQQ 0.20%
  • Sirius XM Holding Inc 2.60%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.96%

The portfolio's dividend yield is 1.96%, with the Vanguard Total International Stock Index Fund ETF Shares contributing the most. Dividends can provide a steady income stream, which is beneficial for reinvesting or income generation. However, the focus on growth stocks like ProShares Ultra QQQ may limit dividend income. Consider whether dividend yield aligns with your investment goals. If income is a priority, increasing exposure to high-dividend stocks or funds might be advantageous.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • ProShares Ultra QQQ 0.95%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.33%

The portfolio's Total Expense Ratio (TER) is 0.33%, which is relatively low and supports better long-term performance. Lower costs mean more of your returns stay in your pocket, enhancing compounding over time. It's important to regularly review fees to ensure they remain competitive. Consider if the cost aligns with the value provided by each investment. Reducing costs further, if possible, could enhance returns, especially in a long-term investment strategy.

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