A concentrated high growth stock portfolio with strong US focus and elevated volatility risk

Report created on Aug 26, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is 100% invested in individual US stocks plus a 25% position in a broad market ETF. That ETF gives nice baseline diversification, but the remaining 75% sits in a relatively small group of handpicked companies, which creates concentration risk. Compared with a broad growth benchmark that holds hundreds or thousands of positions, this lineup is much narrower. That narrowness makes wins and losses more extreme. Keeping the ETF as the “core” is a strong move; to build on that, shifting a bit from single names into more broad funds could smooth the ride while still keeping a clear tilt toward growth and innovation.

Growth Info

Historically, this mix has been a rocket: a 34.88% CAGR means $10,000 would hypothetically have grown to about $47,000 in five years if that rate persisted. That’s far above typical broad equity benchmarks. But there’s a trade‑off: a max drawdown near ‑39% shows that large drops have already happened. Also, 90% of returns came from just 42 trading days, which means missing a few big up days would have hurt a lot. This pattern is normal for growth‑heavy portfolios. It’s useful to treat this great track record as a bonus, not a baseline, and avoid assuming such high returns will repeat.

Projection Info

The Monte Carlo results show a huge spread: at the 5th percentile the portfolio just roughly doubles, while the median and upper ranges explode into massive gains. Monte Carlo is a simulation method that uses random paths based on past volatility and returns to create many possible futures. It’s helpful to picture “what could happen,” but it’s still just math built on history. The 97% rate of positive simulations looks exciting, but real markets can behave very differently from the past. Treat these numbers as a rough weather forecast, not a promise, and consider whether you’d be comfortable if actual returns land closer to the low end.

Asset classes Info

  • Stocks
    100%

Everything here is in stocks, with 0% cash and 0% bonds. That lines up with a classic growth profile and can be very powerful over long horizons, because stocks historically outpace bonds and cash over decades. The flip side is that in big market downturns, there is nowhere to hide; everything tends to fall together, and there’s no stabilizing ballast. Many broad benchmarks mix in some defensive assets to cushion falls, especially for shorter‑term goals. Keeping a high equity share makes sense for long‑term growth, but gradually adding a modest piece of lower‑volatility assets could help reduce the severity of future drawdowns without fully giving up the growth orientation.

Sectors Info

  • Technology
    34%
  • Industrials
    17%
  • Health Care
    12%
  • Financials
    8%
  • Consumer Discretionary
    8%
  • Consumer Staples
    6%
  • Energy
    6%
  • Utilities
    6%
  • Telecommunications
    3%

Sector‑wise, the portfolio leans heavily into technology at 34%, with meaningful stakes in industrials and healthcare, then smaller slices in finance, consumer areas, energy, utilities, and communication services. This is more tech‑tilted than a typical broad US benchmark, which helps explain both the strong returns and the high volatility. Tech and related growth companies usually shine when rates are low and optimism is high, but they can drop sharply when interest rates rise or markets de‑risk. The solid presence of industrials, healthcare, and defensives is a big positive. To make the risk profile smoother, slowly nudging the sector mix closer to broader market weights could help without removing the growth flavor.

Regions Info

  • North America
    100%

Geographically, everything is in North America, effectively all in the US. That home‑country focus is common for US investors and has worked very well in the last decade, since US markets have outperformed many others. However, it does mean the portfolio’s fortunes are tightly tied to the US economy, policy, and currency. Global benchmarks usually give a sizable slice to non‑US companies, which can sometimes zig when the US zags. Adding even a modest allocation to broad international stocks could improve diversification, potentially softening country‑specific shocks, while still keeping the US as the main growth engine.

Market capitalization Info

  • Mega-cap
    57%
  • Large-cap
    39%
  • Mid-cap
    4%

By market cap, the portfolio is dominated by mega and large companies, with 57% in mega‑caps and 39% in big caps, leaving only 4% in mid caps and nothing in small caps. This is very much in line with major broad indices, which are also heavily skewed toward the largest companies. That alignment is a strength; mega‑caps tend to be more liquid and somewhat more resilient than smaller, more speculative names. The lack of small caps limits exposure to some of the market’s more entrepreneurial growth areas, but it also avoids their higher volatility. If more diversification is desired, slowly layering in broad exposure to mid and small companies could add another growth dimension.

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.

On a risk–return basis, this portfolio sits toward the aggressive end of the Efficient Frontier for stock‑only mixes. The Efficient Frontier is just the curve showing the best possible trade‑off between risk (volatility) and reward (return) using available holdings and different weightings. Within these current assets, there’s room to tweak weights so that for the same expected return you might accept less volatility, or for the same volatility you might chase slightly higher expected return. “Efficiency” here is purely about that math trade‑off, not about having perfect diversification or matching any benchmark. Regularly re‑running this analysis as holdings and markets change can help keep the portfolio on that efficient curve.

Dividends Info

  • Apple Inc 0.40%
  • AbbVie Inc 2.90%
  • Broadcom Inc 0.70%
  • Bank of America Corp 1.40%
  • Carpenter Technology Corporation 0.20%
  • Diamondback Energy Inc 2.60%
  • Nextera Energy Inc 2.80%
  • Vanguard S&P 500 ETF 1.10%
  • Waste Management Inc 1.10%
  • Walmart Inc 0.60%
  • Weighted yield (per year) 1.06%

The portfolio’s total dividend yield of about 1.06% is modest and sits roughly in line with a typical growth‑oriented equity mix. Some holdings, like AbbVie, Diamondback, and NextEra, provide attractive income, while others are more focused on reinvesting profits into future growth rather than paying shareholders. Dividends can act like a “paycheck” from investments and help cushion returns during flat or down markets, but for a growth profile, lower yield is not a problem if total return is strong. If income becomes more important over time, steadily increasing the share of higher‑yielding, stable businesses or income‑oriented funds could help boost the cash flow without completely abandoning growth.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.01%

Costs are a real bright spot. The Vanguard S&P 500 ETF charges just 0.03%, and the overall estimated total expense ratio around 0.01% is impressively low. Low fees are one of the few things investors can control, and shaving a fraction of a percent each year compounds significantly over decades. This cost structure is better than what many active strategies offer and aligns nicely with best practices for long‑term investing. As the portfolio evolves, keeping new positions in similarly low‑cost vehicles, and avoiding expensive, complex products, will help ensure that more of the market’s returns stay in the account rather than going to fees.

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