A growth-focused portfolio with high risk and concentrated US exposure

Report created on Jan 19, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily weighted towards common stocks, comprising over 80% of the total allocation. It includes a mix of individual stocks, index funds, and ETFs. Compared to typical growth portfolios, this one is more concentrated, with a significant portion in financial services and technology. This composition suggests a focus on capital appreciation, but it may lack the diversification seen in more balanced portfolios. To enhance diversification, consider including more asset classes such as international equities or real estate investments.

Growth Info

The portfolio has delivered a strong historical CAGR of 20.95%, indicating robust growth over time. However, it also experienced a significant max drawdown of -49.13%, highlighting its vulnerability during market downturns. Compared to benchmarks, this performance suggests a high-risk, high-reward strategy. While past performance is not indicative of future results, it emphasizes the importance of balancing risk and return. Regularly reviewing and adjusting the portfolio can help manage risk and sustain growth.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential returns. The median projection indicates a substantial growth of 950.05%, while the 5th percentile shows a more modest increase of 28.93%. These projections highlight the portfolio's potential for significant growth but also its exposure to risk. It's crucial to remember that these simulations are based on past data and cannot predict future market conditions. Regularly reassessing risk tolerance and investment goals can help align expectations with potential outcomes.

Asset classes Info

  • Stocks
    84%
  • Bonds
    12%
  • Cash
    3%

The portfolio is primarily composed of stocks, with a small allocation to bonds and minimal cash holdings. This asset class distribution aligns with a growth-oriented strategy but may expose the portfolio to higher volatility. Compared to benchmark norms, the lack of fixed income and alternative assets could limit downside protection. To mitigate risk, consider incorporating more diverse asset classes, such as international bonds or commodities, which can provide stability during market fluctuations.

Sectors Info

  • Financials
    30%
  • Technology
    27%
  • Consumer Staples
    12%
  • Telecommunications
    5%
  • Health Care
    4%
  • Consumer Discretionary
    3%
  • Industrials
    3%
  • Consumer Discretionary
    1%
  • Energy
    1%
  • Utilities
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

Sector allocation reveals a heavy concentration in financial services and technology, together making up over 50% of the portfolio. While this focus can drive growth, it also increases exposure to sector-specific risks. For instance, technology-heavy portfolios may face volatility during interest rate hikes. Compared to common benchmarks, this allocation lacks balance across sectors. Diversifying into underrepresented sectors, like healthcare or energy, could enhance stability and reduce reliance on a few sectors for returns.

Regions Info

  • North America
    87%

The portfolio is overwhelmingly concentrated in North American assets, with over 87% allocated to this region. This geographic focus may limit exposure to growth opportunities in emerging markets and other developed regions. Compared to global benchmarks, this allocation is less diversified, potentially increasing vulnerability to regional economic downturns. Expanding geographic exposure by adding assets from Europe, Asia, or Latin America can improve diversification and capture growth in different markets.

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 asset allocation can be optimized using the Efficient Frontier, which seeks the best risk-return ratio. This optimization focuses on reallocating existing assets to achieve maximum efficiency without necessarily adding new ones. By adjusting the weights of high-performing and low-risk assets, the portfolio can potentially enhance returns while managing risk. However, it's essential to periodically reassess the portfolio to ensure it remains aligned with changing market conditions and investment goals.

Dividends Info

  • Broadcom Inc 0.90%
  • Fidelity Contrafund 0.10%
  • Fidelity 500 Index Fund 1.20%
  • JPMorgan Chase & Co 1.40%
  • iShares 20+ Year Treasury Bond ETF 4.30%
  • ProShares UltraPro QQQ 1.20%
  • Walmart Inc 0.90%
  • Weighted yield (per year) 1.48%

The portfolio's dividend yield stands at 1.48%, with notable contributions from the iShares 20+ Year Treasury Bond ETF and JPMorgan Chase & Co. While dividends provide a steady income stream, they play a minor role in this growth-focused portfolio. For investors seeking income, increasing exposure to high-dividend stocks or funds could be beneficial. However, it's essential to balance income needs with growth objectives, ensuring the portfolio aligns with overall investment goals.

Ongoing product costs Info

  • Fidelity Contrafund 0.39%
  • Fidelity 500 Index Fund 0.02%
  • iShares 20+ Year Treasury Bond ETF 0.15%
  • ProShares UltraPro QQQ 0.88%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is relatively low and supports better long-term returns. The Fidelity 500 Index Fund and iShares 20+ Year Treasury Bond ETF contribute to this cost-effectiveness with their low fees. High-cost assets, like the ProShares UltraPro QQQ, could be reviewed for potential replacements with lower-cost alternatives. Keeping costs in check is crucial, as it directly impacts net returns over time.

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