Highly Speculative Single-Focused Portfolio with Strong Technology Bias

Report created on Jun 12, 2024

Risk profile Info

7/7
Speculative
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily concentrated in technology stocks, with MongoDB and NVIDIA making up over 80% of the total allocation. This single-focused approach increases risk but offers potential high returns. The Vanguard S&P 500 ETF provides a slight diversification, but the portfolio remains predominantly tech-centric. This lack of diversification could lead to significant volatility. To mitigate this, consider adding assets from different sectors and asset classes to balance the risk.

Growth Info

Historically, the portfolio has shown impressive performance with a CAGR of 43.12%. However, this comes with a significant downside risk, evidenced by a maximum drawdown of -71.13%. The high returns are concentrated in just 24 days, indicating a volatile nature. While the historical performance is appealing, the high drawdown suggests a need for caution. Diversifying the portfolio could help in reducing the impact of such drawdowns.

Projection Info

A Monte Carlo simulation was conducted with 1,000 iterations to project future performance. Assuming a hypothetical initial investment, the results show a wide range of outcomes. The 5th percentile projects a return of 214.98%, while the 50th percentile estimates 3,984.2%, and the 67th percentile forecasts an impressive 8,936.37%. This variability highlights the speculative nature of the portfolio. To achieve more stable returns, consider adjusting the asset allocation.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly invested in stocks, accounting for 99.98% of the total allocation, with a negligible amount in cash. This heavy reliance on equities increases the risk and potential for high returns but also exposes the portfolio to significant market volatility. Incorporating other asset classes, such as bonds or commodities, could provide a buffer against market downturns and improve risk-adjusted returns.

Sectors Info

  • Technology
    90%
  • Telecommunications
    2%
  • Financials
    2%
  • Health Care
    2%
  • Consumer Discretionary
    1%
  • Industrials
    1%
  • Consumer Staples
    1%
  • Energy
    1%

Technology dominates the portfolio, making up 90.09% of the total allocation. Other sectors like Communication Services, Financial Services, and Healthcare have minimal representation. This heavy sector concentration increases vulnerability to industry-specific risks. To reduce this risk, consider diversifying into sectors like Consumer Staples, Utilities, and Energy, which can offer more stability during economic downturns.

Regions Info

  • North America
    100%

The portfolio is almost exclusively invested in North American assets, with 99.92% allocated to this region. This geographic concentration exposes the portfolio to regional economic and political risks. Adding international exposure, especially from emerging markets and developed economies outside North America, could provide diversification benefits and reduce regional risk.

Dividends Info

  • Apple Inc 0.50%
  • Meta Platforms Inc. 0.20%
  • Microsoft Corporation 0.70%
  • Vanguard S&P 500 ETF 1.40%
  • Weighted yield (per year) 0.20%

The portfolio's dividend yield is not provided, but given the high concentration in technology stocks, it's likely to be low. Tech companies often reinvest profits rather than pay dividends. For investors seeking income, this portfolio may not be ideal. To increase dividend income, consider adding stocks from sectors known for higher yields, such as Utilities and Consumer Staples.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%

The portfolio's costs are minimal, with the Vanguard S&P 500 ETF having an expense ratio of just 0.03%. Low costs are beneficial as they don't eat into returns. However, the high concentration in individual stocks could incur trading costs and potential tax implications. Maintaining a focus on low-cost investments while diversifying could enhance overall returns.

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