A highly concentrated speculative portfolio with dominant technology stocks and significant risk exposure

Report created on Dec 24, 2024

Risk profile Info

7/7
Speculative
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily concentrated, with over 80% allocated to just three stocks: Palantir Technologies, KULR Technology Group, and Tesla. Such concentration can lead to high volatility, as the portfolio's performance is tied closely to these few companies. Common benchmark compositions typically feature a more diversified allocation across a broader range of stocks and asset classes. To mitigate risk, consider diversifying by adding more varied assets, such as bonds or international equities, to balance exposure and potentially stabilize returns.

Growth Info

Historically, this portfolio has shown an impressive CAGR of 62.54%, indicating substantial growth over time. However, it has also experienced a significant maximum drawdown of -68.88%, highlighting its high volatility. When compared to more diversified benchmarks, this performance suggests a higher risk-return profile. It's crucial to understand that past performance doesn't guarantee future results, and such high volatility could lead to substantial losses. Consider implementing risk management strategies to protect gains during downturns.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, shows a wide range of potential results for this portfolio. With a 5th percentile return of -32.53% and a 67th percentile return of 18,416.52%, the projections highlight the portfolio's speculative nature. While the median projection suggests positive growth, it's important to remember that simulations are based on past data and cannot predict future performance with certainty. Regularly reviewing and adjusting the portfolio can help manage risks and align with evolving goals.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly invested in stocks, with nearly 100% of assets in equities. This lack of diversification across asset classes can increase risk, as stocks are more volatile compared to bonds or other fixed-income investments. Common benchmark allocations typically include a mix of stocks, bonds, and cash to balance risk and return. To enhance diversification, consider incorporating other asset classes, such as bonds or real estate, which can provide stability and reduce overall portfolio risk.

Sectors Info

  • Technology
    68%
  • Consumer Discretionary
    24%
  • Telecommunications
    4%
  • Health Care
    1%
  • Financials
    1%
  • Industrials
    1%

The portfolio is heavily weighted towards the technology sector, comprising over 67% of the total allocation. While technology stocks can offer high growth potential, they also tend to be more volatile, especially during market downturns or interest rate hikes. Compared to common benchmarks, this sector concentration suggests higher risk. To mitigate potential volatility, consider diversifying into other sectors, such as healthcare or consumer goods, which may provide more stable returns and reduce the portfolio's overall risk.

Regions Info

  • North America
    100%

Geographically, the portfolio is almost entirely focused on North America, with a negligible allocation to Asia Developed markets. This lack of geographic diversification can expose the portfolio to regional economic downturns or policy changes. Common benchmarks often include a more balanced global allocation to spread risk across different markets. To enhance diversification and reduce regional risk, consider adding international equities or funds that provide exposure to emerging or developed markets outside North America.

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's current allocation may not lie on the Efficient Frontier, which represents the optimal risk-return trade-off. By adjusting the asset mix, it's possible to potentially achieve a better balance between risk and return. The Efficient Frontier is a concept that helps identify the most efficient portfolios by maximizing expected returns for a given level of risk. Consider rebalancing the portfolio to align more closely with this optimal balance, focusing on diversification and risk management.

Dividends Info

  • Meta Platforms Inc. 0.30%
  • Vanguard Growth Index Fund ETF Shares 0.30%
  • Weighted yield (per year) 0.05%

The portfolio's dividend yield is minimal, with a total yield of just 0.05%. This low yield indicates that the portfolio is primarily focused on growth rather than income generation. For investors seeking regular income, dividend-paying stocks or funds could be a valuable addition. While growth stocks can offer substantial appreciation, incorporating a mix of dividend-paying assets can provide a steady income stream and help cushion the impact of market volatility.

Ongoing product costs Info

  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.01%

The portfolio benefits from low costs, with the Vanguard Growth Index Fund ETF having a Total Expense Ratio (TER) of just 0.04%. Low costs are advantageous as they support better long-term performance by minimizing the drag on returns. Compared to many actively managed funds, this cost structure is favorable. However, it's important to regularly review all investment costs to ensure they remain competitive and do not erode potential gains over time.

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