A growth-focused portfolio with a strong emphasis on technology and healthcare stocks

Report created on Dec 7, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed entirely of common stocks, with a notable emphasis on technology and healthcare sectors, each making up a significant portion. This structure suggests a growth-oriented approach, with technology constituting 36% and healthcare 28% of the total allocation. A single asset class, stocks, indicates limited diversification across different types of investments like bonds or real estate. This concentration can lead to higher volatility, but also the potential for significant returns. To reduce risk, consider diversifying into other asset classes such as bonds or commodities, which can provide stability and reduce overall portfolio volatility.

Growth Info

Historically, this portfolio has performed well with a compound annual growth rate (CAGR) of 14.74%. However, it has also experienced significant volatility, as indicated by a maximum drawdown of -32.96%. This means that while the portfolio has the potential for high returns, it can also suffer substantial losses during market downturns. Understanding past performance is crucial, but remember that it doesn’t guarantee future results. To mitigate potential losses, consider strategies like stop-loss orders or rebalancing your portfolio periodically to maintain desired risk levels.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns. With 1,000 simulations, the portfolio's median outcome is a 276.15% increase, while the worst-case scenario shows a -57.85% loss. This highlights the inherent uncertainty in investing, as simulations rely on past performance and market conditions, which may not repeat. Given these projections, it’s important to regularly review and adjust your investment strategy to align with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is exclusively invested in stocks, lacking exposure to other asset classes like bonds, commodities, or cash. This singular focus on equities can lead to high volatility, as stocks are susceptible to market fluctuations. While equities offer potential for high returns, they also carry significant risk. To enhance diversification and reduce risk, consider adding other asset classes. For example, bonds can provide steady income and act as a buffer against stock market downturns, while commodities can offer protection against inflation.

Sectors Info

  • Technology
    36%
  • Health Care
    28%
  • Telecommunications
    12%
  • Real Estate
    12%
  • Consumer Discretionary
    6%
  • Consumer Staples
    6%

Sector allocation is heavily weighted towards technology and healthcare, comprising 64% of the portfolio. While these sectors offer growth potential, the lack of balance may expose the portfolio to sector-specific risks, such as regulatory changes or technological disruptions. Diversifying across more sectors can help mitigate these risks and provide a more stable return. Consider exploring sectors like energy or financials, which may perform differently in various economic cycles, thus providing a hedge against downturns in the technology and healthcare sectors.

Regions Info

  • North America
    88%
  • Europe Developed
    6%
  • Asia Emerging
    6%

The portfolio is predominantly focused on North American stocks, accounting for 88% of the allocation, with minimal exposure to Europe and Asia. This geographic concentration can lead to increased risk due to regional economic or political events. Diversifying geographically can help spread risk and capture growth opportunities in emerging markets or other developed regions. Consider increasing exposure to international markets, which can provide a hedge against domestic economic downturns and benefit from global growth trends.

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 can potentially be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio with the current assets. This involves adjusting the allocation among existing stocks to maximize returns for a given level of risk or minimize risk for a given level of return. By identifying the optimal asset mix, you can enhance portfolio efficiency without necessarily increasing diversification. Regularly reassess your portfolio's position on the Efficient Frontier to ensure alignment with your risk tolerance and investment goals.

Dividends Info

  • AbbVie Inc 3.50%
  • ASML Holding NV 1.00%
  • Alibaba Group Holding Ltd 1.90%
  • Bristol-Myers Squibb Company 4.00%
  • Comcast Corp 2.80%
  • Cisco Systems Inc 2.70%
  • Alphabet Inc Class A 0.20%
  • Hewlett Packard Enterprise Co 2.20%
  • Johnson & Johnson 2.50%
  • Lam Research Corp 1.10%
  • Realty Income Corp 5.10%
  • Pfizer Inc 6.50%
  • Qualcomm Incorporated 1.60%
  • Skyworks Solutions Inc 2.30%
  • Target Corporation 2.60%
  • VICI Properties Inc 5.30%
  • Weighted yield (per year) 2.98%

The portfolio has a moderate dividend yield of 2.98%, with contributions from companies like Pfizer and Realty Income Corp offering higher yields. Dividends can provide a steady income stream and help cushion against market volatility. However, the focus on growth stocks means that dividend income is not the primary driver of returns. To increase income, consider allocating a portion of the portfolio to high-dividend-paying stocks or dividend-focused funds, which can provide stability and enhance total returns, especially during periods of market uncertainty.

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