A balanced and broadly diversified investment portfolio with a strong focus on stocks and low costs

Report created on Aug 4, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with 70% in a total stock market ETF and 15% in an international stock ETF. This is complemented by a 10% allocation to a dividend-focused ETF, and a small 5% combined allocation to domestic and international bond ETFs. This composition suggests a growth-oriented strategy with a balanced approach to risk, leveraging the stability of bonds to mitigate the inherent volatility of stocks. The broad diversification across asset classes and sectors is commendable, aligning well with a balanced risk profile.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.23%, with a maximum drawdown of -33.39%. The days contributing most to returns highlight the portfolio's susceptibility to market volatility, yet it demonstrates resilience and potential for recovery. This performance, while impressive, underscores the need for investors to brace for fluctuations and emphasizes the importance of a long-term perspective to navigate through periods of market stress.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with a median increase of 165% in portfolio value, suggesting a robust potential for growth. However, the simulation also indicates a possibility of lower percentile outcomes, which serves as a reminder of the inherent uncertainties in investing. These projections, while useful, are based on historical data and assumptions that may not fully account for future market conditions, emphasizing the importance of regular portfolio reviews.

Asset classes Info

  • Stocks
    94%
  • Bonds
    5%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks (94%), with a minor allocation to bonds (5%). This composition is typical of a growth-focused strategy, aiming for higher returns at the expense of higher volatility. While the stock-heavy allocation capitalizes on equity market growth, the small bond component provides a cushion against market downturns. Investors should consider whether this allocation aligns with their risk tolerance and investment horizon.

Sectors Info

  • Technology
    25%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    7%
  • Energy
    5%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is well-diversified, with technology (25%) and financial services (14%) leading the way. This sector distribution reflects a modern investment approach, capitalizing on the growth potential of tech and the stability of financial services. However, such a concentration can introduce sector-specific risks, potentially impacting portfolio performance during downturns in these sectors. Diversifying across additional sectors could further mitigate risk.

Regions Info

  • North America
    81%
  • Europe Developed
    6%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America (81%), with modest exposure to developed Europe (6%) and emerging Asian markets (2%). This concentration in the U.S. market leverages its historical strength but may limit exposure to potential growth in other regions. Expanding geographic diversification could capture global growth opportunities and reduce the impact of regional downturns.

Market capitalization Info

  • Mega-cap
    35%
  • Large-cap
    32%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's market capitalization exposure is balanced across mega (35%), big (32%), and medium (19%) cap stocks, with a smaller allocation to small (6%) and micro (2%) caps. This distribution suggests a moderate risk approach, balancing stability offered by larger companies with the growth potential of smaller firms. Considering a slight increase in small and micro-cap exposures could enhance growth prospects, albeit with higher volatility.

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.

Regarding risk vs. return optimization, the portfolio appears to be positioned near the Efficient Frontier, indicating an effective balance between risk and expected return. This optimization suggests that the current allocation is close to providing the highest possible return for the given level of risk. Regular re-evaluation can ensure the portfolio continues to maintain this balance as market conditions evolve.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.50%
  • Vanguard Total International Bond Index Fund ETF Shares 4.10%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.85%

The dividend yields from the ETFs contribute to the portfolio's income, with yields ranging from 1.20% to 4.10%. This income stream can provide a buffer during market downturns and contribute to total returns. Given the portfolio's growth orientation, the current dividend strategy appears balanced. However, investors seeking higher income might consider increasing allocations to higher-yielding assets.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Bond Index Fund ETF Shares 0.07%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) of 0.04% is impressively low, maximizing the potential for net returns. Keeping costs low is crucial for long-term investment success, as even small differences in fees can significantly impact compounded returns over time. The focus on low-cost ETFs is commendable and should be maintained.

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