Balanced portfolio with focus on U.S. equities and slight gold exposure

Report created on Apr 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is structured with a strong emphasis on U.S. equities, comprising 80% of the total allocation. The inclusion of gold at 20% provides some diversification, but overall, the portfolio leans heavily towards stocks. Against a benchmark, the allocation is less diversified, as it lacks exposure to international equities and other asset classes. This composition could benefit from increased diversification to mitigate risk. Consider introducing more varied asset classes, such as bonds or international equities, to enhance stability and reduce risk, especially during market downturns.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.06%, which is a strong performance indicator. However, it experienced a maximum drawdown of -23.64%, showing vulnerability during market downturns. Compared to benchmarks, this performance is commendable, but the drawdown suggests potential volatility. To manage this, consider strategies that cushion against losses, such as diversifying into asset classes that typically perform well during downturns, like bonds or defensive stocks.

Projection Info

Using Monte Carlo simulations, which analyze potential future outcomes based on historical data, the portfolio shows promising forward projections. With an annualized return of 13.05% and a high probability of positive returns, the outlook is optimistic. However, remember that simulations are based on past data and assumptions, so these projections are not guaranteed. To prepare for uncertainty, regularly review the portfolio's performance and adjust allocations to align with changing market conditions and personal investment goals.

Asset classes Info

  • Stocks
    80%

The portfolio's asset allocation is heavily weighted towards stocks at 80%, with no allocation to bonds or other asset classes. This concentration limits diversification benefits and may increase volatility. Compared to benchmarks, which typically include a mix of stocks and bonds, the portfolio could benefit from a more balanced asset class distribution. Consider introducing fixed-income securities or alternative investments to enhance diversification and potentially stabilize returns during volatile market periods.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Consumer Discretionary
    8%
  • Telecommunications
    8%
  • Health Care
    7%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    1%
  • Basic Materials
    1%

Sector-wise, the portfolio is concentrated in technology (26%) and financial services (17%). While these sectors have shown strong growth, they can also be volatile, especially during economic shifts or interest rate changes. Compared to benchmarks, this concentration may increase risk. To mitigate this, consider diversifying into other sectors, such as healthcare or consumer staples, which may provide more stability and reduce sector-specific risks, particularly during economic downturns.

Regions Info

  • North America
    79%

Geographically, the portfolio is heavily concentrated in North America, with 79% exposure. This lack of international diversification can increase vulnerability to regional economic downturns. Compared to global benchmarks, which typically have a more balanced geographic distribution, the portfolio could benefit from increased exposure to international markets. Consider adding international equities to diversify geographically, potentially reducing risk and capturing growth opportunities in emerging and developed markets outside the U.S.

Market capitalization Info

  • Mega-cap
    41%
  • Large-cap
    22%
  • Mid-cap
    12%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio is primarily invested in large-cap stocks, with 41% in mega-cap and 22% in big-cap companies. This focus can provide stability and lower risk, as large companies tend to be more resilient. However, it limits exposure to the potentially higher growth rates of smaller companies. Compared to benchmarks, which often include a mix of market caps, the portfolio might benefit from increased exposure to small and mid-cap stocks to capture growth opportunities and enhance diversification.

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 could be optimized using the Efficient Frontier, which seeks the best risk-return ratio by adjusting current assets. While the current portfolio has a projected return of 13.05%, optimization could increase this to 15.56% with a similar risk level. This involves reallocating existing investments to achieve a better balance between risk and return. Consider consulting with an investment advisor to explore rebalancing strategies, aiming to enhance portfolio efficiency without increasing overall risk.

Dividends Info

  • JPMorgan Chase & Co 1.70%
  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.50%
  • Weighted yield (per year) 0.98%

The portfolio's dividend yield is 0.98%, with contributions from JPMorgan Chase & Co and the Vanguard Total Stock Market ETF. While dividends are not the primary focus, they can provide a steady income stream. Compared to benchmarks, this yield is moderate. For investors seeking income, consider increasing exposure to dividend-paying stocks or funds. However, ensure that the focus on dividends aligns with overall investment goals, as high yields can sometimes indicate higher risk.

Ongoing product costs Info

  • iShares® Gold Trust Micro 0.09%
  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is impressively low at 0.06%, which supports better long-term performance by minimizing costs. Compared to industry averages, this is highly efficient. Keeping costs low is crucial, as it directly impacts net returns. Continue to monitor expense ratios and consider low-cost investment options when rebalancing. This cost efficiency aligns well with best practices, ensuring more of your investment returns are retained over time, enhancing overall portfolio growth.

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