High-risk portfolio with significant concentration in Tesla and healthcare

Report created on Aug 18, 2025

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily concentrated, with 50% in Tesla Inc and 30% in UnitedHealth Group Incorporated, leading to a high-risk classification. The remaining 20% is spread across five other stocks in various sectors, but this does little to mitigate overall risk due to the dominant positions of the top two holdings. Such concentration in a few stocks, especially with half the portfolio in a single company, significantly increases volatility and exposure to idiosyncratic risk.

Growth Info

The historical performance shows a Compound Annual Growth Rate (CAGR) of 18.23%, which is impressive. However, the Max Drawdown of -49.73% highlights the portfolio's volatility. The days contributing to 90% of returns being so few indicates that the portfolio's performance is highly dependent on exceptional gains on limited occasions, which can be a risky proposition for investors seeking consistent growth or income.

Projection Info

Monte Carlo simulations suggest a wide range of outcomes, with a 5th percentile projection at a staggering -98.5% loss and a median (50th percentile) at -33.5%, indicating a significant risk of loss. However, the 67th percentile showing a 67.7% gain and 413 out of 1,000 simulations with positive returns suggest potential for high rewards. This illustrates the portfolio's aggressive risk-reward profile, emphasizing the importance of understanding one's risk tolerance.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, lacking diversification across different asset classes such as bonds or real estate. This singular focus on equities, particularly in such concentrated positions, amplifies both the potential for high returns and the risk of significant losses. Diversifying across asset classes can help mitigate risk and smooth out returns over time.

Sectors Info

  • Consumer Discretionary
    60%
  • Health Care
    30%
  • Technology
    4%
  • Industrials
    3%
  • Financials
    2%
  • Telecommunications
    1%

Sectoral allocation shows a heavy tilt towards Consumer Cyclicals and Healthcare, constituting 90% of the portfolio. While these sectors can offer growth, such concentration increases susceptibility to sector-specific downturns. The minimal exposure to Technology, Industrials, Financial Services, and Communication Services further narrows the diversification, potentially limiting the portfolio's ability to capitalize on growth across the broader economy.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

Geographic allocation is almost entirely focused on North America (99%), with a nominal exposure to Developed Europe (1%). This geographic concentration in the US market increases exposure to country-specific economic risks and misses out on potential growth opportunities in emerging markets and other developed regions. Expanding geographic diversification could reduce risk and tap into global growth trends.

Market capitalization Info

  • Mega-cap
    80%
  • Large-cap
    15%
  • Mid-cap
    4%
  • Small-cap
    1%

The portfolio's allocation leans heavily towards Mega and Big cap stocks, making up 95% of the portfolio. This bias towards larger companies may provide some stability compared to smaller caps, but it also limits exposure to the potentially higher growth rates of Medium and Small cap stocks. Incorporating a broader range of market caps could enhance growth potential and 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.

Given the current high-risk profile, optimizing the portfolio using the Efficient Frontier could significantly enhance the risk-return ratio. This would involve adjusting asset allocations to achieve the best possible returns for a given level of risk, rather than maximizing returns without regard to risk. The current lack of diversification and heavy concentration in a few stocks suggests there is substantial room for improvement in achieving a more efficient portfolio.

Dividends Info

  • Delta Air Lines Inc 0.70%
  • UnitedHealth Group Incorporated 2.80%
  • Weighted yield (per year) 0.86%

The portfolio's overall dividend yield is relatively low at 0.86%, reflecting the growth-oriented nature of the holdings. For investors seeking income, this may not be sufficient. However, for those focused on capital appreciation, reinvesting dividends from the few income-generating stocks could contribute to compounding growth over time.

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