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Growth-focused portfolio with a strong tilt towards technology and consumer cyclicals stocks

Report created on Dec 14, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards common stocks, with a significant concentration in a few large-cap technology companies such as Apple and Tesla. The top five holdings make up over 66% of the portfolio, indicating a concentrated investment strategy. This concentration can lead to higher volatility, as the performance of these few stocks will significantly impact the overall portfolio value. For those seeking to balance risk, it may be beneficial to consider diversifying into other asset types or increasing the number of holdings to reduce reliance on a few companies.

Growth Info

Historically, the portfolio has delivered impressive returns, with a compound annual growth rate (CAGR) of 28.45%. However, it has also experienced significant drawdowns, with a maximum drop of 35.36% from peak to trough. This highlights the high-risk, high-reward nature of the portfolio. While past performance is not indicative of future results, understanding these trends helps set realistic expectations. Investors should be prepared for potential volatility and consider strategies to mitigate risk, such as setting stop-loss orders or diversifying further.

Projection Info

Monte Carlo simulations project a wide range of potential outcomes for this portfolio, using historical data to model future scenarios. With 1,000 simulations, the median outcome suggests a potential return of 516.27%, but the 5th percentile indicates a possible loss of 66.49%. This demonstrates the uncertainty and risk inherent in the current asset allocation. While simulations provide valuable insights, they are based on historical patterns and assumptions, which may not hold in the future. Regular portfolio reviews and adjustments can help align with evolving market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, offering no exposure to other asset classes like bonds or real estate. This lack of diversification can lead to increased risk, especially during market downturns when stock prices generally fall. Diversifying across different asset classes can help mitigate risk by spreading exposure. Introducing bonds or alternative investments could provide stability and reduce volatility. Investors might consider rebalancing to include a mix of asset classes that align with their risk tolerance and financial goals.

Sectors Info

  • Technology
    46%
  • Consumer Discretionary
    30%
  • Consumer Staples
    10%
  • Energy
    4%
  • Financials
    4%
  • Industrials
    2%
  • Telecommunications
    2%
  • Health Care
    2%

There is a notable concentration in technology and consumer cyclicals, comprising over 76% of the portfolio. While these sectors have driven growth historically, they also carry sector-specific risks. For example, technology stocks can be highly volatile due to rapid innovation cycles and regulatory changes. Balancing sector exposure by investing in underrepresented areas, such as healthcare or financial services, can help mitigate these risks. A more balanced sector allocation may provide more stable returns and reduce the impact of sector-specific downturns.

Regions Info

  • North America
    90%
  • Europe Developed
    6%
  • Desconocido
    4%

The portfolio is predominantly invested in North American companies, accounting for over 90% of the holdings. This geographic concentration exposes the portfolio to regional economic and political risks. Diversifying geographically can help mitigate these risks by spreading exposure across different markets. Including international stocks from developed and emerging markets could enhance diversification and potentially offer new growth opportunities. Investors should consider the benefits of global diversification to reduce dependence on a single region's economic performance.

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.

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The portfolio can be optimized using the Efficient Frontier concept, which seeks the best possible risk-return ratio. The current allocation could potentially achieve a higher expected return of 33.61% with a similar risk level by adjusting the weights of existing assets. This involves reallocating funds among current holdings to maximize returns for the same level of risk. However, optimization does not guarantee success and should be revisited regularly to align with changing market conditions and personal financial goals.

Dividends Info

  • Apple Inc 0.40%
  • AbbVie Inc 3.60%
  • Costco Wholesale Corp 2.00%
  • Delta Air Lines Inc 0.80%
  • Alphabet Inc Class A 0.20%
  • JPMorgan Chase & Co 1.90%
  • Lowe's Companies Inc 1.70%
  • Mastercard Inc 0.50%
  • Nike Inc 1.40%
  • Starbucks Corporation 2.40%
  • Target Corporation 3.30%
  • T-Mobile US Inc 1.20%
  • Visa Inc. Class A 0.70%
  • Exxon Mobil Corp 3.50%
  • Weighted yield (per year) 0.68%

The portfolio's dividend yield is relatively low at 0.68%, reflecting its focus on growth stocks rather than income-generating assets. While dividends can provide a steady income stream, growth stocks often reinvest earnings to fuel expansion. Investors seeking income may want to consider increasing exposure to high-dividend stocks or dividend-focused funds. Balancing growth and income can help meet financial goals, especially for those approaching retirement or seeking more predictable cash flows.

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