Balanced portfolio with strong US focus and low costs emphasizing stock market growth

Report created on Jul 31, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is predominantly invested in the stock market, with an 80% allocation to the Vanguard Total Stock Market Index Fund Admiral Shares and a 20% allocation to the Vanguard Developed Markets Index Fund Admiral Shares. Such a structure suggests a focus on broad market exposure, heavily weighted towards the US market. The inclusion of developed markets provides some international diversification, albeit limited. The portfolio's asset class composition being almost entirely in stocks (99%) indicates a growth-oriented strategy, albeit with a higher risk profile than more diversified portfolios.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 12.81%, the portfolio has demonstrated strong historical performance. The maximum drawdown of -34.82% indicates a significant but not unusual level of volatility for equity-focused investments. Notably, a small number of days (28) contributed to 90% of the returns, highlighting the impact of short-term market movements on long-term gains. This performance, while impressive, should be viewed with the understanding that past success is not a reliable indicator of future results.

Projection Info

The Monte Carlo simulation, using 1,000 iterations, suggests a wide range of potential outcomes, from a 28.4% increase at the 5th percentile to a 435.3% increase at the 67th percentile. With 973 simulations showing positive returns, the forward-looking projection is optimistic. However, it's crucial to remember that Monte Carlo simulations are based on historical data and assumptions that might not accurately predict future market conditions.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is almost entirely in stocks, with a negligible cash position. This high equity exposure is conducive to growth but comes with increased market risk. The absence of bonds or alternative investments limits the portfolio's ability to hedge against stock market volatility. Investors might consider whether introducing other asset classes could provide better risk-adjusted returns.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation shows a heavy emphasis on technology and financial services, which have historically offered strong growth but can be volatile. The presence of industrials, consumer cyclicals, and healthcare provides some balance, yet the concentration in high-growth sectors may increase susceptibility to market swings. Diversifying into more defensive sectors could offer stability in down markets.

Regions Info

  • North America
    82%
  • Europe Developed
    11%
  • Japan
    4%
  • Asia Developed
    1%
  • Australasia
    1%

Geographic allocation heavily favors North America (82%), with modest exposure to developed markets in Europe and Japan. This US-centric approach has likely benefited from the strong performance of American markets but leaves the portfolio exposed to regional economic and political risks. Increasing exposure to emerging markets or underrepresented developed regions could enhance diversification and potential for growth.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's market capitalization breakdown shows a preference for mega and large-cap stocks, which are typically more stable than smaller companies. However, this focus might limit opportunities for outsized gains from small and micro-cap investments. Considering a slightly increased allocation to smaller caps could introduce higher growth potential, albeit with added volatility.

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.

Considering the Efficient Frontier, this portfolio may not be fully optimized for the best possible risk-return ratio due to its heavy stock concentration and limited asset class diversification. Rebalancing to include assets with lower correlation to equities could improve the portfolio's position on the Efficient Frontier, enhancing returns for a given level of risk.

Dividends Info

  • VANGUARD DEVELOPED MARKETS INDEX FUND ADMIRAL SHARES 1.90%
  • Vanguard Total Stock Market Index Fund Admiral Shares 0.90%
  • Weighted yield (per year) 1.10%

The portfolio's dividend yield stands at 1.10%, with the developed markets fund contributing a higher yield. While dividends provide a steady income stream and can contribute to total returns, the portfolio's overall yield is relatively modest, reflecting its growth orientation. Investors seeking higher income might explore opportunities with higher dividend yields or fixed income assets.

Ongoing product costs Info

  • VANGUARD DEVELOPED MARKETS INDEX FUND ADMIRAL SHARES 0.05%
  • Vanguard Total Stock Market Index Fund Admiral Shares 0.04%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from exceptionally low costs, with a total expense ratio (TER) of 0.04%. Low costs are crucial for long-term investment success, as they directly enhance net returns. This cost efficiency is a significant strength, particularly in a low-yield environment, and should be maintained.

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