Highly concentrated tech-heavy portfolio with significant exposure to NVIDIA and Apple

Report created on Feb 28, 2025

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily concentrated, with NVIDIA and Apple making up over 54% of the total. The remaining assets are split among a mix of ETFs and other stocks, with Vanguard Total Stock Market Index Fund ETF Shares being the largest ETF holding. Such concentration can lead to high volatility, especially since the portfolio leans heavily on individual stock performance. To align with broader benchmarks, consider diversifying into additional sectors or regions. This can help mitigate risk and provide more stable returns over time.

Growth Info

Historically, the portfolio has shown impressive performance, with a CAGR of 37.34%. However, this comes with a significant max drawdown of -49.20%, indicating high volatility. The portfolio's returns are concentrated in just 25 days, suggesting that a few key events or periods drive most gains. While past performance can offer insights, it's important to remember that it doesn't guarantee future results. Evaluating risk tolerance and considering diversification could help stabilize returns and reduce potential drawdowns.

Projection Info

Using Monte Carlo simulations, which assess potential future outcomes based on historical data, the portfolio shows a wide range of possible returns. The median projection is a 236.2% increase, but there’s a 5% chance of a -77.6% decline. While simulations provide a range of scenarios, they rely on past data and can't predict future market conditions. To prepare for volatility, consider balancing high-risk investments with more stable options, potentially improving the probability of achieving desired outcomes.

Asset classes Info

  • Stocks
    100%

This portfolio is entirely composed of stocks, lacking diversification across asset classes. While stocks can offer strong growth, they also come with higher risk. Introducing other asset classes, such as bonds or real estate, can provide more stability and reduce overall risk. A diversified portfolio can help smooth out returns over time, especially during market downturns. Aligning asset allocation with personal risk tolerance and investment goals is key to long-term success.

Sectors Info

  • Technology
    63%
  • Consumer Discretionary
    8%
  • Financials
    7%
  • Industrials
    5%
  • Health Care
    5%
  • Consumer Staples
    4%
  • Telecommunications
    4%
  • Real Estate
    2%
  • Energy
    1%
  • Basic Materials
    1%
  • Utilities
    1%

With 63% of the portfolio in technology, it is heavily skewed towards this sector. While tech has been a strong performer, it can be volatile, especially during interest rate changes. Other sectors like consumer cyclicals and financial services are underrepresented. Balancing sector exposure can help mitigate risk and offer more consistent returns. Consider reallocating some funds to sectors like healthcare or energy, which may provide growth opportunities and stability.

Regions Info

  • North America
    100%

The portfolio is entirely focused on North America, missing out on international diversification. While the U.S. market has been robust, global diversification can reduce risk and capture opportunities in emerging markets. Over-reliance on one region can lead to increased vulnerability to local economic downturns. Consider adding international stocks or funds to balance geographic exposure and potentially enhance long-term growth prospects.

Market capitalization Info

  • Mega-cap
    68%
  • Large-cap
    20%
  • Mid-cap
    7%
  • Small-cap
    4%

Dominated by mega-cap stocks at 68%, the portfolio leans towards large, established companies. While these can provide stability, smaller-cap stocks often offer higher growth potential. Balancing exposure across different market capitalizations can enhance diversification and capture opportunities in smaller, potentially faster-growing companies. Adjusting the allocation to include more small and mid-cap stocks can better align with growth objectives.

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 composition could be optimized for risk versus return using the Efficient Frontier. This approach identifies the best possible risk-return ratio based on existing assets and allocation changes. By adjusting the weightings, the portfolio can potentially achieve higher returns for a given level of risk or reduce risk while maintaining returns. Regularly reassessing the allocation can ensure it remains aligned with investment goals and market conditions.

Dividends Info

  • Apple Inc 0.40%
  • Ford Motor Company 4.80%
  • Alphabet Inc Class C 0.40%
  • Pfizer Inc 4.80%
  • STAG Industrial Inc 3.80%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 0.85%

The portfolio's dividend yield is relatively low at 0.85%, reflecting its growth-oriented nature. While dividends contribute to returns, they are less critical for aggressive investors focused on capital appreciation. However, incorporating more dividend-paying stocks can provide a steady income stream and reduce reliance on capital gains. Balancing growth and income investments can enhance overall portfolio resilience.

Ongoing product costs Info

  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.01%

The portfolio benefits from low costs, with a total expense ratio (TER) of just 0.01%. This cost efficiency supports better long-term performance, as lower fees mean more returns stay in the portfolio. Maintaining low costs is crucial for maximizing returns over time. Regularly reviewing and optimizing expenses can ensure that the portfolio remains cost-effective, especially when considering new investments.

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