Moderately Diversified Growth Portfolio with Strong Tech Focus and Impressive Historical Returns

Report created on Jun 30, 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 of a mix of individual stocks and an ETF, with a strong emphasis on technology companies. The Vanguard S&P 500 ETF takes up 30% of the portfolio, providing a broad market exposure. The rest is allocated to individual stocks like Apple, Microsoft, and NVIDIA, which are all major players in the tech sector. This composition leans heavily towards growth, with a significant portion of assets concentrated in tech. This setup is relevant as it offers both diversification and potential high returns, but it might be susceptible to tech sector volatility. Consider balancing the tech exposure with other sectors to mitigate risks.

Growth Info

Historically, the portfolio has performed exceptionally well, boasting a CAGR of 26.17%. This impressive growth rate indicates strong past performance, likely driven by the high allocation to technology stocks, which have seen significant growth in recent years. However, the max drawdown of -32.34% suggests that the portfolio has experienced substantial declines, highlighting its susceptibility to market downturns. While past performance is not indicative of future results, this historical data suggests the portfolio has been well-positioned to capitalize on market upswings. Maintaining a diversified approach can help sustain growth while managing potential drawdowns.

Projection Info

Using a Monte-Carlo simulation, which models potential future returns by running numerous random scenarios, the portfolio shows promising projections. With a hypothetical initial investment, the median outcome suggests a potential growth of 2,603.77%, with a high likelihood of positive returns, as 996 out of 1,000 simulations were profitable. The annualized return across simulations is 33.11%, indicating robust potential. However, it's important to note that these projections are based on historical data and assumptions, and actual future performance can vary. Continuously reviewing and adjusting the portfolio can help align it with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted in stocks, with a staggering 99.98% allocation, while cash comprises a minuscule 0.02%. This concentration in equities aligns with a growth-oriented strategy, aiming for higher returns at the cost of increased risk. Stocks typically offer higher growth potential compared to other asset classes like bonds or cash. However, this lack of diversification across asset classes can expose the portfolio to higher volatility. To reduce risk, consider incorporating other asset classes, such as bonds, which can provide stability and income, especially during market downturns.

Sectors Info

  • Technology
    50%
  • Health Care
    13%
  • Consumer Discretionary
    13%
  • Telecommunications
    13%
  • Financials
    4%
  • Industrials
    2%
  • Consumer Staples
    2%
  • Energy
    1%
  • Utilities
    1%
  • Real Estate
    1%
  • Basic Materials
    1%

Sector-wise, the portfolio is highly concentrated in technology, making up nearly half of the total allocation. This focus on tech stocks can drive significant growth, given the sector's rapid expansion and innovation. However, it also means the portfolio is vulnerable to sector-specific risks, such as regulatory changes or market saturation. While the presence of healthcare, consumer cyclicals, and communication services adds some diversity, the portfolio could benefit from further exposure to other sectors. Balancing sector allocation can help mitigate risks and capture opportunities across different areas of the economy.

Regions Info

  • North America
    80%
  • Europe Developed
    10%
  • No data
    10%

Geographically, the portfolio is predominantly invested in North American assets, accounting for nearly 80% of the allocation. This focus on the U.S. market can be advantageous, given its size and stability. However, it also means the portfolio might miss out on growth opportunities in other regions. The small exposure to European and Asian markets provides some international diversification, but it's quite limited. Expanding geographic diversification can help capture growth in emerging markets and reduce the portfolio's reliance on the U.S. economy. Consider increasing exposure to international markets to enhance 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.

The portfolio optimization chart suggests that there is room for improvement in balancing risk and return. By moving along the efficient frontier, the portfolio can achieve a more optimal mix of assets, either increasing potential returns or reducing risk. For those seeking a riskier profile, increasing allocation to high-growth stocks may be beneficial. Conversely, for a more conservative approach, incorporating bonds or other low-volatility assets can help stabilize returns. It's important to focus on aligning the portfolio with personal financial goals and risk tolerance, ensuring it remains adaptable to changing market conditions.

Dividends Info

  • Apple Inc 0.40%
  • AstraZeneca PLC ADR 2.20%
  • McDonald’s Corporation 1.70%
  • Microsoft Corporation 0.50%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.88%

The portfolio's dividend yield stands at 0.88%, with contributions from stocks like AstraZeneca and McDonald's, known for their consistent payouts. While the yield is modest, it adds a layer of income generation to the growth-focused strategy. Dividends can provide a steady cash flow, which is beneficial during periods of market turbulence. However, the tech-heavy allocation, typically associated with lower dividends, limits the overall yield. To boost income, consider incorporating more dividend-paying stocks or funds. Balancing growth and income can enhance the portfolio's total return potential while providing some financial stability.

Ongoing product costs Info

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

The portfolio benefits from low costs, with the Vanguard S&P 500 ETF's expense ratio at just 0.03% and a Total TER of 0.01%. Low investment costs are crucial as they directly impact net returns, allowing more of the portfolio's growth to be retained. Keeping costs minimal is a smart strategy, especially for long-term investors, as it can significantly enhance compounding effects over time. While the current cost structure is efficient, it's important to regularly review and compare fees to ensure they remain competitive. Maintaining a focus on low-cost investments can support better overall performance.

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