A portfolio that loves the S&P 500 a little too much and thinks global diversification is just a fancy term
Report created on Aug 1, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
VT Vanguard Total World Stock Index Fund ETF Shares
VT - US9220427424 50.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 30.00% -
SP Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 10.00% -
VG Vanguard Information Technology Index Fund ETF Shares
VGT - US92204A7028 10.00%
This portfolio is like that one friend who says they're adventurous because they once added pepper to their ketchup. With 80% in S&P 500 flavored ETFs (including a momentum ETF that's really just more of the same with extra steps) and a "global" fund that's mostly just more US stocks, it's like betting on the home team in every game. The token 10% in tech isn't diversification; it's just seasoning on an already tech-heavy S&P 500 diet.
Growth
Historically, this portfolio might look like it's been hitting the gym with a 17.28% CAGR, but let's not forget that past performance is about as reliable as a weather forecast during a hurricane. With such heavy reliance on the US market and tech, the -33.43% max drawdown is a reminder that what goes up can come down hard. It's like enjoying the rollercoaster until it goes off the rails.
Projection
The Monte Carlo simulation must feel like a fortune-teller telling you you're going to be rich, with a 50th percentile projection of 1,253.8% growth. But remember, Monte Carlo is more about generating possibilities than promises. Betting the farm on this would be like planning your retirement around winning the lottery. Sure, 1,000 simulations all came back positive, but in the real world, markets don't always play nice.
Asset classes
- Stocks 99%
- Cash 1%
With 99% in stocks and a lonely 1% in cash, this portfolio is all gas and no brakes. It's like driving a sports car on the highway—exciting until you hit traffic (or a market downturn). Diversification across asset classes isn't just a suggestion; it's like having both a seatbelt and airbags in that sports car. Maybe consider bonds or real estate as passengers?
Sectors
- Technology 34%
- Financials 15%
- Consumer Discretionary 10%
- Industrials 9%
- Telecommunications 8%
- Health Care 8%
- Consumer Staples 6%
- Energy 3%
- Basic Materials 2%
- Utilities 2%
- Real Estate 2%
Tech at 34%? This portfolio loves technology more than Silicon Valley on launch day. While tech can offer explosive growth, it can also deliver explosive declines. And with financials and consumer cyclicals taking up the rear, it's like having a three-legged stool where one leg is a lot longer than the others. A little more balance wouldn't hurt unless you enjoy wobbly investments.
Regions
- North America 82%
- Europe Developed 8%
- Asia Emerging 3%
- Japan 3%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
With 82% in North America, calling this portfolio "globally diversified" is like calling a hamburger a world cuisine tour. Yes, the US market is a big deal, but ignoring other continents is like eating at the same restaurant every day. You're missing out on a lot of flavors (and possibly gains) from around the world.
Market capitalization
- Mega-cap 46%
- Large-cap 32%
- Mid-cap 17%
- Small-cap 4%
- Micro-cap 1%
Leaning 46% on mega-caps is like trusting giants to do all the heavy lifting. Sure, they're strong, but even giants can stumble. And with only 5% in small and micro-caps, it's like ignoring the little guys who could be the next big thing. Diversifying across market caps is like having both Goliath and David on your team—they each bring something to the table.
Redundant positions
-
High correlationVanguard S&P 500 ETFVanguard Total World Stock Index Fund ETF Shares
The love affair between the Vanguard S&P 500 ETF and the Total World Stock Index Fund is a classic case of overlapping interests—like dating two people from the same small town. It's not adding the diversification you think it is. It's time to see other ETFs, ones that don't just rehash the same holdings in a slightly different package.
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.
Talking about optimizing this portfolio without addressing its love for correlated assets is like rearranging deck chairs on the Titanic. Sure, it might look better, but it doesn't solve the fundamental issue. Before you even think about efficient frontiers, let's get some real diversification in there. It's not just about having a lot of different things; it's about having different things that actually behave differently.
Dividends
- Invesco S&P 500® Momentum ETF 0.60%
- Vanguard Information Technology Index Fund ETF Shares 0.50%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total World Stock Index Fund ETF Shares 1.80%
- Weighted yield (per year) 1.37%
With a total yield of 1.37%, this portfolio is like a part-time job that doesn't quite cover rent. It's nice to have some income, but don't plan your financial future around these dividends. If income is a goal, it might be time to look at assets that work a little harder for you, instead of ones that are just doing it for exposure.
Ongoing product costs
- Invesco S&P 500® Momentum ETF 0.13%
- Vanguard Information Technology Index Fund ETF Shares 0.10%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total World Stock Index Fund ETF Shares 0.07%
- Weighted costs total (per year) 0.07%
The total expense ratio of 0.07% is like finding a parking spot in the city that's actually free—it's surprisingly good. At least here, you're not bleeding money on fees. It's like the one oasis in a desert of questionable choices. Keep clutching onto those low costs like a life raft; they're one of the few things in this portfolio that's unequivocally positive.
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