A concentrated growth-focused portfolio with high risk and limited geographic diversification

Report created on Jan 4, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is entirely composed of common stocks, with significant allocations to individual companies, such as Sprouts Farmers Market and Royal Caribbean Cruises. This concentration in equities and reliance on few holdings is common in growth-focused portfolios but can increase risk due to lack of diversification. Typically, a balanced portfolio might include bonds or other asset classes to mitigate risk. Consider diversifying across more asset classes to reduce potential volatility and improve stability.

Growth Info

Historically, the portfolio has achieved an impressive Compound Annual Growth Rate (CAGR) of 33.04%, indicating strong growth performance. However, it also experienced a significant maximum drawdown of -36.94%, highlighting its vulnerability to market downturns. While past performance can provide insights, it should not be solely relied upon for future expectations. Consider strategies to manage drawdown risks, such as diversification or incorporating defensive assets, to protect gains during market volatility.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns, with a median return of 2,464.46%. While promising, these projections are based on past data and assumptions, which may not hold true in the future. The simulation's high variability underscores the portfolio's risk. To better prepare for uncertain market conditions, consider regularly reviewing and adjusting the portfolio to align with evolving market trends and personal investment goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted in stocks, with no allocation to other asset classes like bonds or real estate. This lack of asset class diversification can lead to higher volatility and risk, especially during equity market downturns. A more diversified asset allocation can help mitigate risk and provide more stable returns over time. Consider adding fixed income or alternative investments to balance the portfolio and reduce its sensitivity to stock market fluctuations.

Sectors Info

  • Consumer Discretionary
    27%
  • Technology
    22%
  • Financials
    19%
  • Consumer Staples
    14%
  • Industrials
    12%
  • Telecommunications
    6%

The portfolio is concentrated in the Consumer Cyclicals and Technology sectors, which together comprise nearly half of the total allocation. While these sectors can offer growth opportunities, they are also subject to higher volatility, especially during economic downturns or interest rate changes. A more balanced sector allocation could reduce risk and enhance stability. Consider evaluating sector exposures and potentially redistributing investments to include more defensive sectors like Consumer Defensive or Utilities.

Regions Info

  • North America
    100%

With 100% of the portfolio invested in North American stocks, geographic diversification is notably lacking. This concentration exposes the portfolio to regional economic and political risks. A more globally diversified portfolio can help mitigate these risks by spreading investments across different regions and markets. Consider exploring opportunities in international markets to enhance diversification and potentially benefit from growth in other regions.

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 be optimized for a better risk-return ratio, as indicated by the Efficient Frontier analysis. This theoretical optimization suggests a potential expected return of 58.94% at the current risk level. However, achieving this involves reallocating assets within the portfolio. While optimization can enhance returns, it may also alter the portfolio's risk profile. Consider working with a financial advisor to explore optimization strategies that align with your risk tolerance and investment goals.

Dividends Info

  • Argan Inc 0.90%
  • The Allstate Corporation 1.90%
  • General Motors Company 0.90%
  • Alphabet Inc Class A 0.30%
  • Manulife Financial Corp 4.20%
  • Powell Industries Inc 0.30%
  • Royal Caribbean Cruises Ltd 0.20%
  • Reinsurance Group of America 1.60%
  • Synchrony Financial 1.50%
  • T-Mobile US Inc 1.30%
  • Weighted yield (per year) 0.40%

The portfolio's dividend yield is relatively low at 0.4%, reflecting its growth-oriented nature. While dividends are not a primary focus here, they can provide a steady income stream and enhance total returns. For investors seeking income, incorporating higher-yielding assets could be beneficial. Consider balancing growth stocks with dividend-paying stocks to create a more income-generating portfolio, if income is a priority.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey