Balanced Risk Portfolio with High Stock Allocation and Strong Performance Potential

Report created on Dec 3, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of ETFs, with a significant allocation to the Vanguard Total Stock Market Index Fund ETF Shares, making up 65% of the portfolio. This indicates a strong emphasis on broad market exposure. The remaining positions include other ETFs and a mutual fund, offering a diversified approach. The balance between domestic and international exposure suggests a moderately diversified strategy, aiming to capture growth from various markets. This composition reflects a balanced risk profile, suitable for investors seeking growth while managing risk through diversification.

Growth Info

With a historical CAGR of 13.75%, the portfolio has demonstrated strong performance, although it experienced a maximum drawdown of -25.91%. This indicates that while the portfolio has delivered impressive returns, it has also been subject to significant volatility. The concentrated days that make up 90% of returns suggest that the portfolio's performance has been driven by a few key periods. This highlights the importance of maintaining a long-term perspective and not reacting to short-term market fluctuations, as the overall growth potential remains robust.

Projection Info

The Monte Carlo simulation, using a hypothetical initial investment, projects a wide range of potential outcomes. With 1,000 simulations, the portfolio shows a 5th percentile return of 31.6% and a 67th percentile return of 521.46%, with an annualized return of 13.23%. This suggests a strong potential for growth while acknowledging the inherent uncertainty in future market conditions. The majority of simulations resulted in positive returns, reinforcing the portfolio's potential for long-term success. Investors should remain focused on their long-term goals and risk tolerance when considering these projections.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.67% of the allocation in this asset class. This high stock allocation indicates a focus on growth, with minimal exposure to other asset classes like cash or bonds. While this can lead to higher potential returns, it also increases exposure to market volatility. Investors may consider incorporating additional asset classes, such as bonds, to further diversify the portfolio and potentially reduce risk. Balancing the portfolio with various asset classes can help achieve a more stable performance over time.

Sectors Info

  • Technology
    26%
  • Financials
    23%
  • Health Care
    10%
  • Consumer Discretionary
    10%
  • Industrials
    8%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    2%

The sector allocation of the portfolio is concentrated, with significant exposure to Technology and Financial Services, making up nearly half of the portfolio. This concentration can lead to higher volatility, as these sectors can be sensitive to economic changes. While the diverse sector allocation provides exposure to various industries, a more balanced distribution could help mitigate sector-specific risks. Investors should consider reviewing their sector exposure to ensure it aligns with their risk tolerance and investment goals, potentially adjusting allocations to achieve a more balanced sector representation.

Regions Info

  • North America
    88%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is heavily skewed towards North America, with 88.4% of the allocation, while other regions like Europe and Asia have minimal representation. This concentration in North America may limit the portfolio's ability to capture growth opportunities in other regions. Diversifying the geographic allocation can help reduce regional risk and increase exposure to global growth trends. Investors might consider gradually increasing their international exposure to achieve a more balanced geographic distribution, aligning with their risk tolerance and long-term investment objectives.

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 optimization chart suggests that investors can further optimize their portfolio by adjusting their position along the efficient frontier. Moving towards a riskier portfolio may involve increasing exposure to high-growth sectors or regions, while a more conservative approach could involve adding bonds or reducing stock allocation. However, before making these adjustments, investors should first focus on ensuring their portfolio aligns with their risk tolerance and financial goals. By doing so, they can achieve a balance between risk and return that suits their investment strategy.

Dividends Info

  • Gabelli MultiMedia Mutual Fund 17.50%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 3.24%

The portfolio has a total dividend yield of 3.24%, with the Gabelli MultiMedia Mutual Fund providing a notably high yield of 17.5%. This suggests a focus on income generation, complementing the growth potential of the portfolio. The inclusion of dividend-paying ETFs like Schwab U.S. Dividend Equity ETF and Vanguard Total International Stock Index Fund ETF Shares further enhances the income aspect. Investors seeking regular income may find this yield attractive. However, it's essential to ensure that the pursuit of dividends does not compromise the overall growth and diversification strategy.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is a low 0.04%, reflecting cost-effective management. This low TER is primarily due to the inclusion of low-cost ETFs like the Vanguard Total Stock Market Index Fund ETF Shares. Keeping investment costs low is crucial for maximizing net returns over time. Investors should continue prioritizing low-cost investment options to enhance overall portfolio performance. Regularly reviewing and comparing expense ratios of existing and potential investments can help maintain a cost-efficient strategy, ensuring that more of the portfolio's returns are retained.

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