A single-focused portfolio with a heavy concentration in Berkshire Hathaway and gold exposure

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor with a balanced risk tolerance seeking growth through a concentrated approach. It emphasizes capital appreciation with a focus on a few key holdings, appealing to those comfortable with potential volatility. The investment horizon should be long-term, allowing time for market fluctuations to even out. While the portfolio's concentration may limit diversification, it offers strong growth potential for investors who prioritize returns over broad diversification. This approach is ideal for individuals who are confident in the chosen assets and willing to accept associated risks.

Positions

  • Berkshire Hathaway Inc
    BRK-B - US0846707026
    34.00%
  • SPDR® Gold Shares
    GLD - US78463V1070
    33.00%
  • Invesco QQQ Trust
    QQQ - US46090E1038
    33.00%

This portfolio is composed of three main holdings: Berkshire Hathaway Inc., SPDR® Gold Shares, and Invesco QQQ Trust, each holding a roughly equal weight. This structure results in a concentrated portfolio with a significant bias towards a few assets, which limits diversification. A benchmark portfolio typically includes a broader range of asset types and sectors, offering more balance. To enhance diversification, consider adding additional asset types or sectors to reduce reliance on the current holdings. This can help in spreading risk and potentially improving long-term returns.

Growth Info

Historically, this portfolio has delivered a strong CAGR of 14.39%, indicating robust growth over time. The maximum drawdown of -24.64% highlights potential volatility, yet the portfolio has managed to recover effectively. Compared to a balanced benchmark, this performance is impressive, though it suggests a higher risk tolerance. To maintain this growth trajectory, consider periodic reviews to ensure alignment with market conditions. While past performance is encouraging, it's crucial to remember that it doesn't guarantee future results, so stay vigilant about market changes.

Projection Info

The Monte Carlo simulation, using 1,000 scenarios, projects a range of potential outcomes based on historical data. With a 50th percentile return of 497.4% and a 67th percentile return of 761.9%, the portfolio shows potential for substantial growth. However, the 5th percentile return of 91.3% highlights possible downside risks. These projections rely on historical patterns, which may not predict future performance accurately. Regularly revisiting the portfolio's composition and adjusting for new economic conditions can help optimize outcomes while preparing for different market environments.

Asset classes Info

  • Stocks
    67%
  • Other
    33%
  • Cash
    0%

The portfolio's asset allocation is heavily skewed towards stocks (67%) and other assets (33%), with no cash holdings. This allocation suggests a focus on growth, with limited liquidity for immediate needs. Compared to a balanced benchmark, this allocation is less diversified, potentially increasing volatility. To mitigate risks, consider integrating additional asset classes, such as bonds or real estate, which can help stabilize returns. Balancing growth with stability can enhance the portfolio's resilience against market fluctuations and provide a more comprehensive investment strategy.

Sectors Info

  • Financials
    34%
  • Technology
    17%
  • Telecommunications
    5%
  • Consumer Discretionary
    4%
  • Consumer Staples
    2%
  • Health Care
    2%
  • Industrials
    1%
  • Basic Materials
    0%
  • Utilities
    0%
  • Energy
    0%
  • Real Estate
    0%

Sector-wise, financial services dominate the portfolio at 34%, followed by technology at 17%. This concentration indicates a reliance on these sectors for performance, which can introduce sector-specific risks. In contrast, a diversified benchmark would spread exposure across more sectors. To reduce vulnerability to sector downturns, consider broadening sector exposure. Including sectors like healthcare or consumer staples can provide balance and potentially reduce volatility, especially during economic shifts that impact specific industries differently.

Regions Info

  • North America
    66%
  • Europe Developed
    0%
  • Latin America
    0%
  • Asia Emerging
    0%

Geographically, the portfolio is concentrated in North America, accounting for 66% of the holdings. This focus limits exposure to international markets, which can offer diversification benefits and access to growth opportunities abroad. A typical benchmark would have a more global allocation. To enhance geographic diversification, consider increasing exposure to developed and emerging markets. This can help mitigate risks associated with regional economic downturns and capitalize on global growth trends, potentially improving long-term returns.

Market capitalization Info

  • Mega-cap
    52%
  • Unknown
    33%
  • Large-cap
    11%
  • Mid-cap
    4%

The portfolio is heavily weighted towards mega-cap stocks (52%), with smaller allocations to big and medium caps. This skew towards larger companies can provide stability but may limit exposure to the growth potential of smaller firms. A balanced benchmark would typically have a more even distribution across market capitalizations. To capture growth opportunities, consider diversifying into small- and mid-cap stocks. This can enhance the portfolio's growth prospects while maintaining a balanced risk profile, as smaller companies often offer higher growth potential.

Dividends Info

  • Invesco QQQ Trust 0.50%
  • Weighted yield (per year) 0.16%

The portfolio's dividend yield is modest, with Invesco QQQ Trust yielding 0.50% and a total yield of 0.16%. This suggests a focus on capital appreciation rather than income generation. For investors seeking income, higher-yielding assets could be integrated to boost cash flow. In contrast, a benchmark might include a mix of growth and income-generating assets. If income is a priority, consider adding dividend-focused investments to enhance cash flow while maintaining growth potential. This balance can provide a steady income stream alongside capital appreciation.

Ongoing product costs Info

  • SPDR® Gold Shares 0.40%
  • Invesco QQQ Trust 0.20%
  • Weighted costs total (per year) 0.20%

The portfolio's costs are relatively low, with SPDR® Gold Shares having a TER of 0.40% and Invesco QQQ Trust at 0.20%. Keeping costs low is beneficial for long-term returns, as high fees can erode gains. Compared to industry averages, these costs are competitive. To further optimize returns, regularly review expense ratios and consider cost-effective alternatives if available. Maintaining a focus on cost-efficiency can significantly impact overall performance, ensuring more of your returns are retained over time.

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.

The portfolio can be optimized using the Efficient Frontier, which helps identify the best risk-return ratio based on current assets. This approach doesn't necessarily improve diversification but enhances the allocation among existing assets. By adjusting the weightings, the portfolio can achieve a more efficient balance, potentially increasing returns for a given level of risk. Regularly revisiting the allocation strategy and making necessary adjustments can ensure the portfolio remains aligned with your risk tolerance and investment goals.

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