A growth-focused portfolio with significant concentration in financial services and North American assets

Report created on Jan 6, 2025

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 heavily concentrated, with over half allocated to Berkshire Hathaway Inc., followed by Occidental Petroleum Corporation. This skew towards two companies limits diversification, which is crucial for managing risk and capitalizing on various market opportunities. A more balanced allocation across a broader range of assets could enhance stability, particularly during market volatility. Consider diversifying into additional stocks or asset types to better spread risk and potentially improve returns.

Growth Info

Historically, the portfolio has delivered impressive returns, with a Compound Annual Growth Rate (CAGR) of 26.48%. However, it also experienced a maximum drawdown of -18.93%, indicating significant volatility. While past performance is promising, it's important to remember that it doesn't guarantee future results. To mitigate potential downturns, consider strategies that can provide downside protection, such as diversifying into less volatile asset classes or sectors.

Projection Info

Using Monte Carlo simulations, which predict future outcomes based on historical data, the portfolio shows a wide range of potential future values. The median outcome suggests substantial growth, but the results also highlight the inherent uncertainty and risk. It's crucial to maintain a flexible strategy that can adapt to changing market conditions. Regularly reviewing and adjusting the portfolio can help align it with evolving financial goals and risk tolerance.

Asset classes Info

  • Stocks
    100%

The portfolio is almost entirely composed of stocks, with a negligible amount in cash. This heavy reliance on equities could lead to high volatility, especially during market downturns. Although stocks can offer significant growth, incorporating other asset classes like bonds or real estate could provide more balanced risk and return dynamics. Diversifying into different asset classes can help cushion against stock market fluctuations and stabilize returns over time.

Sectors Info

  • Financials
    55%
  • Energy
    25%
  • Technology
    12%
  • Telecommunications
    3%
  • Consumer Discretionary
    2%
  • Consumer Staples
    1%
  • Health Care
    1%
  • Industrials
    1%

The portfolio is predominantly weighted towards the financial services sector, with significant exposure to energy and technology. This concentration may lead to increased volatility, particularly if these sectors underperform. Balancing the sector allocation by including more consumer defensive or healthcare stocks could reduce risk and improve stability. Keeping an eye on sector trends and adjusting allocations accordingly can help manage sector-specific risks.

Regions Info

  • North America
    96%
  • Europe Developed
    4%

With 95.68% of the portfolio's assets in North America, there's limited geographic diversification. This concentration exposes the portfolio to regional economic and political risks. Increasing exposure to other regions, such as Europe or Asia, could enhance diversification and potentially tap into growth opportunities in emerging markets. A more globally diversified portfolio can help mitigate risks associated with any single country's economic fluctuations.

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 could potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio for a given set of assets. By adjusting the allocation among existing assets, you might achieve a more efficient portfolio that balances risk and return. It's essential to periodically review the portfolio's performance and make necessary adjustments to maintain alignment with financial goals and risk tolerance.

Dividends Info

  • ASML Holding NV 0.90%
  • Occidental Petroleum Corporation 1.30%
  • Invesco NASDAQ 100 ETF 0.60%
  • Weighted yield (per year) 0.46%

The portfolio's dividend yield is relatively low at 0.46%, which is typical for growth-focused strategies that prioritize capital appreciation over income generation. For investors seeking income, incorporating higher-yielding assets could enhance cash flow. However, if the primary goal is growth, maintaining a focus on stocks with strong growth potential may be more beneficial. Balancing growth and income can be achieved by periodically reviewing dividend policies.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Weighted costs total (per year) 0.02%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.02%, which supports better long-term performance by minimizing fees. Maintaining low costs is crucial for enhancing net returns. Continuously monitoring and comparing the fees of existing holdings with alternative investments can ensure cost-efficiency. Consider reallocating to lower-cost options if available, as this can contribute to improved overall returns over time.

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