Cautious Single-Focused Portfolio with High Dividend Yield and Strong Historical Performance

Report created on Dec 3, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio consists of two ETFs, each making up 50% of the total. It is heavily focused on these specific funds, which means that the diversification is limited. While this can simplify management, it also implies a reliance on the performance of these particular ETFs. Single-focused portfolios can be less resilient to market fluctuations. To improve diversification, consider adding more varied assets to reduce risk and enhance potential returns.

Growth Info

Historically, the portfolio has performed well with a compound annual growth rate (CAGR) of 13.46% and a maximum drawdown of -13.39%. This suggests that the portfolio has been able to generate strong returns while managing risk effectively. However, relying on past performance alone can be misleading. It's important to regularly review and adjust the portfolio to align with current market conditions and personal financial goals to maintain this performance.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio shows promising future potential. A hypothetical initial investment could grow significantly, with the 5th percentile projecting a 161.64% increase and the median projection at 531.76%. This simulation provides a range of possible outcomes, helping to understand the potential risks and rewards. Regularly reviewing these projections can assist in making informed adjustments to align with risk tolerance and investment objectives.

Asset classes Info

  • Stocks
    84%
  • No data
    15%
  • Cash
    1%

The portfolio is primarily composed of stocks, accounting for 84.42% of the total. There's a small cash allocation and an unclassified portion. This heavy stock allocation can drive growth but also increases volatility. Balancing stocks with other asset classes like bonds can reduce risk and provide stability. Consider diversifying into other asset classes to create a more balanced portfolio that can weather different market conditions.

Sectors Info

  • Technology
    35%
  • Consumer Discretionary
    12%
  • Telecommunications
    11%
  • Health Care
    10%
  • Industrials
    9%
  • Consumer Staples
    8%
  • Financials
    7%
  • Utilities
    3%
  • Energy
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

The sector allocation is heavily weighted towards technology, which makes up over 35% of the portfolio. This concentration can lead to increased risk if the technology sector underperforms. While sector-specific investments can provide high returns, they also expose the portfolio to sector-specific risks. To mitigate these risks, consider diversifying into sectors that have different performance drivers and risks, creating a more balanced sector allocation.

Regions Info

  • North America
    97%
  • Europe Developed
    2%

The portfolio is predominantly invested in North America, accounting for 97.36% of the geographic allocation. This heavy regional focus can limit exposure to growth opportunities in other parts of the world. While investing in familiar markets can feel safer, geographic diversification can reduce risk and enhance returns. Consider gradually adding exposure to other regions to benefit from global economic growth and reduce regional risk.

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 the current setup is efficient for a cautious investor. However, there's room for optimization by moving along the efficient frontier. To achieve a riskier portfolio, consider increasing stock exposure or adding more volatile assets. For a more conservative approach, introduce bonds or other low-risk investments. Focus on optimizing asset allocation to align with risk tolerance and financial goals, ensuring a balanced approach to risk and return.

Dividends Info

  • JPMorgan Equity Premium Income ETF 6.40%
  • JPMorgan Nasdaq Equity Premium Income ETF 8.50%
  • Weighted yield (per year) 7.45%

The portfolio offers an attractive dividend yield of 7.45%, with individual ETFs yielding 6.4% and 8.5%. High dividend yields can provide a steady income stream, which is particularly beneficial for income-focused investors. However, high yields can sometimes indicate higher risk. Regularly assess the sustainability of these dividends and consider reinvesting them to compound returns or allocate them to other investments for further diversification.

Ongoing product costs Info

  • JPMorgan Equity Premium Income ETF 0.35%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Weighted costs total (per year) 0.35%

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