A balanced portfolio with a strong focus on technology and global diversification

Report created on Dec 31, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of a mix of funds and individual stock, with a significant focus on equities. The Schwab S&P 500 Index Fund holds the highest allocation at 38%, followed by two ETFs and a common stock in NVIDIA. This composition suggests a balanced approach, with a tilt towards growth-oriented assets. Compared to typical balanced portfolios, this one leans more heavily on equities, potentially increasing growth prospects. To ensure alignment with personal risk tolerance, consider evaluating the equity-heavy nature, especially if market volatility is a concern.

Growth Info

Historically, the portfolio has demonstrated a strong Compound Annual Growth Rate (CAGR) of 16.86%. This indicates robust past performance, especially compared to average market returns. However, it's important to note the significant maximum drawdown of -57.21%, reflecting potential volatility. While past performance can guide expectations, it doesn't guarantee future results. Monitoring market conditions and adjusting allocations in response to economic changes can help manage risk and sustain performance.

Projection Info

The forward projection, using Monte Carlo simulations, suggests a wide range of potential outcomes, with an annualized return of 24.67%. This method uses historical data to simulate future performance, offering insights into possible scenarios. It's noteworthy that 993 out of 1,000 simulations showed positive returns, indicating a strong probability of growth. However, simulations are based on past data, which may not reflect future market conditions. Regularly reviewing and adjusting the portfolio in response to changing economic landscapes can help optimize future performance.

Asset classes Info

  • Stocks
    84%
  • Bonds
    16%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, comprising 83.62% of the total allocation, with bonds making up 15.76%. This allocation aligns with a growth-oriented strategy, but it may expose the portfolio to higher volatility. Compared to typical balanced portfolios, which often have a higher bond allocation, this one leans more towards equities. To enhance stability, consider increasing bond exposure, especially if a more conservative approach is desired. Balancing asset classes can help manage risk and provide more consistent returns over time.

Sectors Info

  • Technology
    42%
  • Financials
    9%
  • Industrials
    7%
  • Health Care
    6%
  • Telecommunications
    5%
  • Consumer Discretionary
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Consumer Discretionary
    2%
  • Utilities
    2%
  • Real Estate
    1%

The portfolio's sector allocation is heavily concentrated in technology, at 41.80%, which could lead to higher volatility during tech market corrections. Other sectors like financial services and industrials are represented but with significantly lower allocations. This concentration aligns with a growth-focused strategy but may lack diversification. To mitigate sector-specific risks, consider diversifying into underrepresented sectors. A more balanced sector allocation can help protect against downturns in any single industry and provide steadier returns.

Regions Info

  • North America
    64%
  • Europe Developed
    8%
  • Asia Emerging
    4%
  • Japan
    3%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Australasia
    1%

Geographically, the portfolio is predominantly focused on North America, with 64.11% of assets allocated there. While this provides stability from a developed market, it may limit exposure to growth opportunities in other regions. Compared to global benchmarks, the portfolio is underexposed to emerging markets. To enhance diversification and capture potential growth, consider increasing allocations to other regions. A more globally diversified portfolio can help balance risks and tap into various economic cycles worldwide.

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 suggests potential for optimization using the Efficient Frontier, which seeks the best risk-return ratio. This involves adjusting asset weights to achieve maximum return for a given level of risk. While the portfolio is already balanced, exploring different allocations could uncover more efficient combinations. It's important to note that optimization focuses solely on existing assets and may not address broader diversification goals. Regularly reassessing the portfolio can help maintain optimal efficiency.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • First Trust NASDAQ Cybersecurity ETF 0.20%
  • Schwab S&P 500 Index Fund 1.20%
  • Vanguard FTSE All-World ex-US Index Fund ETF Shares 1.60%
  • Weighted yield (per year) 1.37%

The portfolio's total dividend yield is 1.37%, with contributions from various funds. While dividends provide a steady income stream, this yield is relatively modest, reflecting the growth-oriented nature of the portfolio. For investors seeking income, it might be beneficial to explore higher-yielding assets. However, it's important to balance income needs with growth objectives. Maintaining a mix of growth and income-generating investments can help achieve both capital appreciation and regular income.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • First Trust NASDAQ Cybersecurity ETF 0.59%
  • Schwab S&P 500 Index Fund 0.02%
  • Vanguard FTSE All-World ex-US Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is impressively low at 0.13%, with individual fund costs ranging from 0.02% to 0.59%. Keeping costs low is crucial for maximizing long-term returns, as high fees can erode gains over time. This cost structure aligns well with best practices in portfolio management. Ensuring that expenses remain low while maintaining quality investments can help enhance overall performance. Regularly reviewing and comparing fund fees can further optimize cost efficiency.

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