High-risk high-reward portfolio with significant concentration in speculative assets

Report created on Jul 22, 2025

Risk profile Info

7/7
Speculative
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily concentrated, with over 56% allocated to a single ETF focused on U.S. value factors and nearly 43% in two common stocks within the speculative domain. This structure is indicative of a high-risk, potentially high-return strategy but lacks diversification across asset classes and sectors. The heavy reliance on a few positions amplifies both potential gains and vulnerabilities to specific market movements.

Growth Info

Historically, this portfolio has shown an extraordinary Compound Annual Growth Rate (CAGR) of 49.64%, though it's accompanied by a substantial maximum drawdown of -55.73%. Such volatility underscores the speculative nature of the investments. The performance data highlights days where significant returns were concentrated, suggesting that the portfolio's success hinges on a few critical trading days, which may not be replicable moving forward.

Projection Info

Monte Carlo simulations, projecting future performance based on historical data, indicate a wide range of potential outcomes, with a significant portion resulting in losses. The analysis suggests a high degree of uncertainty and risk, with only about 28.5% of simulations yielding positive returns. This reinforces the speculative nature of the portfolio and the need for caution.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, with no exposure to other asset classes like bonds or real estate. This lack of diversification can lead to higher volatility and risk, especially given the speculative nature of the chosen stocks. Broadening the asset class mix could help mitigate some of this risk while potentially smoothing out returns over time.

Sectors Info

  • Health Care
    30%
  • Energy
    27%
  • Financials
    15%
  • Consumer Discretionary
    7%
  • Industrials
    6%
  • Technology
    4%
  • Basic Materials
    4%
  • Consumer Staples
    4%
  • Telecommunications
    3%

Sector allocation shows a heavy emphasis on healthcare and energy, followed by financial services. While these sectors can offer growth opportunities, the portfolio's concentration in them increases susceptibility to sector-specific downturns. Diversifying across a broader range of sectors could reduce risk and improve the portfolio's resilience to market fluctuations.

Regions Info

  • North America
    99%

Geographic exposure is almost exclusively North American, which limits the portfolio's ability to capitalize on global growth opportunities and increases its vulnerability to regional economic cycles. Expanding into developed European or emerging Asian markets could offer additional growth potential and risk mitigation through geographic diversification.

Market capitalization Info

  • Micro-cap
    60%
  • Small-cap
    14%
  • Mid-cap
    13%
  • Large-cap
    12%
  • Mega-cap
    1%

The portfolio's market capitalization breakdown reveals a heavy tilt towards micro-cap stocks, which are typically more volatile and risky than larger-cap stocks. While they offer high growth potential, their susceptibility to market swings and liquidity issues could pose significant risks. Balancing with medium to large-cap investments might provide a more stable growth trajectory.

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.

Considering the portfolio's current risk-return profile, there's room for optimization towards achieving a more efficient frontier. This would involve adjusting the asset allocation to achieve the best possible risk-return ratio. Diversifying across more asset classes and sectors, and incorporating investments with different risk profiles, could enhance the portfolio's efficiency.

Dividends Info

  • Vanguard U.S. Value Factor 2.40%
  • Weighted yield (per year) 1.35%

The portfolio's dividend yield from the Vanguard U.S. Value Factor ETF provides some income, albeit the overall yield is relatively low due to the speculative nature of the portfolio. For investors seeking income, increasing exposure to assets with higher dividend yields could offer a more consistent income stream alongside potential capital gains.

Ongoing product costs Info

  • Vanguard U.S. Value Factor 0.13%
  • Weighted costs total (per year) 0.07%

With an overall Total Expense Ratio (TER) of 0.07%, the portfolio benefits from low costs, which is commendable. Keeping investment costs low is crucial for maximizing long-term returns, especially in a high-risk portfolio where every percentage point of return is valuable.

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