This portfolio has only about 10 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced and Broadly Diversified Portfolio with Strong Historical Performance and Low Costs

Report created on Jul 30, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of four ETFs, with the Vanguard S&P 500 ETF making up 50%, the Vanguard Total International Stock Index Fund ETF Shares at 20%, the Schwab U.S. Dividend Equity ETF at 15%, and the Vanguard Total Stock Market Index Fund ETF Shares at 15%. This broad diversification helps spread risk across different markets and sectors. Diversification is crucial for managing risk and capturing growth opportunities from various parts of the market. To maintain this balance, it's important to periodically review the portfolio and make adjustments as needed.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 11.36%. However, it has experienced a maximum drawdown of -33.86%, indicating significant volatility during market downturns. Understanding these metrics helps gauge the risk and reward profile of the portfolio. While the high CAGR is attractive, the drawdown shows potential for substantial losses. It's essential to be prepared for such volatility and ensure it aligns with the risk tolerance.

Projection Info

A Monte Carlo simulation, which uses random sampling to model potential future outcomes, was run with 1,000 simulations. Assuming a hypothetical initial investment, the 5th percentile end value is 48.19%, and the 50th percentile end value is 312.62%. The 67th percentile end value is 451.93%, with an annualized return of 11.78%. This suggests a wide range of possible outcomes, highlighting the uncertainty in future returns. Diversifying further or adjusting asset allocation can help manage this uncertainty.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio primarily consists of stocks (99.28%), with minimal allocations to cash (0.69%) and other assets. This heavy reliance on equities aligns with a growth-oriented strategy but comes with higher risk. A more balanced approach might include bonds or other fixed-income assets to reduce volatility and provide stability. Regularly revisiting the asset allocation can help ensure it remains aligned with investment goals and risk tolerance.

Sectors Info

  • Technology
    24%
  • Financials
    15%
  • Health Care
    12%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    7%
  • Consumer Staples
    7%
  • Energy
    6%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The sector allocation is diverse, with the highest concentrations in Technology (23.72%), Financial Services (14.84%), and Healthcare (12.15%). This broad exposure across various sectors helps mitigate the risk of any single sector underperforming. Sector diversification is essential for reducing the impact of sector-specific downturns. Monitoring sector performance and making periodic adjustments can help maintain a balanced and resilient portfolio.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (81.11%), with smaller allocations to Europe Developed (8.31%), Japan (3.31%), and other regions. While the focus on North America might capture growth from a strong market, it also exposes the portfolio to regional risks. Increasing exposure to international markets can provide additional diversification and growth opportunities. Periodic rebalancing can ensure geographic diversification aligns with global economic trends.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.40%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.97%

The portfolio includes the Schwab U.S. Dividend Equity ETF, which likely contributes to a steady dividend yield. Dividends can provide a reliable income stream and help cushion against market volatility. Reinvesting dividends can also enhance long-term growth through compounding. Keeping track of dividend yields and considering reinvestment strategies can optimize income and growth potential.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • 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 has very low costs, with an average Total Expense Ratio (TER) of 0.04%. Low costs are crucial for maximizing returns, as high fees can erode gains over time. Maintaining a focus on low-cost investments helps ensure more of the returns are retained. Regularly reviewing expense ratios and seeking cost-effective investment options can help keep costs low and improve overall performance.

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