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A tech-heavy aggressive portfolio with high risk and potential for substantial returns

Report created on Dec 28, 2024

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification
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Positions

This portfolio is heavily concentrated in technology stocks, with a significant 29% allocation to NVIDIA alone. The top three holdings, including Netflix and Amazon, make up over 50% of the portfolio, indicating a high concentration risk. While this composition can lead to substantial gains in a bull market, it also exposes the investor to significant volatility. Diversifying the asset allocation by reducing individual stock weightings and adding more sectors could help mitigate risk and enhance stability.

Growth Info

Historically, this portfolio has shown impressive growth, with a CAGR of 37.94%. However, the maximum drawdown of -58.3% highlights its vulnerability during market downturns. This performance suggests that while the portfolio can deliver high returns, it also carries considerable risk. Investors should be prepared for significant fluctuations and consider whether their risk tolerance aligns with such a volatile performance history.

Projection Info

Forward projections using Monte Carlo simulations indicate a wide range of potential outcomes, reflecting the portfolio's high-risk nature. With 1,000 simulations, the 50th percentile suggests a return of 292.84%, while the 5th percentile projects a potential loss of -87.11%. These simulations rely on historical data, which may not predict future performance accurately. Diversifying the portfolio further could help narrow this range and provide more predictable outcomes.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of common stocks, lacking exposure to other asset classes like bonds or real estate. This single asset class focus increases the potential for high returns but also heightens risk. Introducing a mix of asset classes can enhance diversification and reduce overall portfolio volatility, aligning better with a balanced investment strategy.

Sectors Info

  • Technology
    55%
  • Telecommunications
    26%
  • Consumer Discretionary
    13%
  • Financials
    4%
  • Consumer Staples
    2%

With 55% of the portfolio in technology, there's a notable sector concentration that could lead to increased volatility, especially during tech downturns. The remaining sectors, such as consumer cyclicals and communication services, provide some diversification but are still limited. Expanding into underrepresented sectors could help stabilize returns and reduce reliance on tech performance.

Regions Info

  • North America
    96%
  • Asien Schwellenländer
    2%
  • Unbekannt
    1%
  • Australasia
    1%

The portfolio is heavily weighted towards North American assets, with 96% exposure. This geographic concentration may limit diversification benefits and expose the portfolio to regional economic risks. Considering investments in other global regions could enhance diversification, providing a buffer against North American market fluctuations and potentially capturing growth in emerging 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.

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The Efficient Frontier analysis suggests that the current portfolio could be optimized for a better risk-return ratio. By adjusting asset allocations, the portfolio could achieve a higher expected return of 39.47% with the same risk level. This optimization focuses on maximizing returns for a given risk, offering a more efficient investment strategy without altering the overall risk profile.

Dividends Info

  • Apple Inc 0.40%
  • Broadcom Inc 0.70%
  • Costco Wholesale Corp 0.50%
  • Salesforce.com Inc 0.40%
  • Walt Disney Company 0.40%
  • Alphabet Inc Class C 0.30%
  • Meta Platforms Inc. 0.30%
  • Microsoft Corporation 0.70%
  • Micron Technology Inc 0.50%
  • Qualcomm Incorporated 2.10%
  • Royal Caribbean Cruises Ltd 0.20%
  • Tencent Holdings Ltd ADR 0.80%
  • T-Mobile US Inc 1.30%
  • Taiwan Semiconductor Manufacturing 0.90%
  • Walmart Inc 0.70%
  • Weighted yield (per year) 0.13%

The portfolio's dividend yield is relatively low at 0.13%, reflecting its focus on growth stocks rather than income generation. While low dividends are typical for growth-oriented portfolios, investors seeking regular income may need to adjust their strategy. Adding dividend-paying stocks or other income-generating assets could provide a more balanced return profile.

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