A broadly diversified portfolio with cautious risk profile and strong historical performance

Report created on Dec 24, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of ETFs, with a significant allocation to stocks at 69.6%, cash at 15.4%, bonds at 10%, and real estate at 5%. This structure is a common approach for balanced portfolios, providing a mix of growth and stability. The high stock allocation suggests a focus on growth, while the inclusion of bonds and cash offers a buffer against market volatility. Consider whether this balance aligns with your risk tolerance and investment goals, as adjusting the mix could enhance alignment with your financial objectives.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 13.12%. The maximum drawdown of -19.3% indicates the worst peak-to-trough decline, which is moderate for a portfolio with significant stock exposure. This performance aligns with a cautious risk profile, balancing growth potential with risk management. While past performance is not indicative of future results, these metrics suggest the portfolio has been resilient. Regularly reviewing performance against personal benchmarks can ensure continued alignment with your financial goals.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, shows a wide range of possibilities. With a median return of 222.12% and 988 out of 1,000 simulations yielding positive returns, the outlook is optimistic. However, remember that simulations rely on past data and assumptions, which may not hold in the future. Regularly reassessing projections as market conditions change can help maintain realistic expectations and guide strategic adjustments to the portfolio.

Asset classes Info

  • Stocks
    70%
  • Cash
    15%
  • Bonds
    10%
  • Real Estate
    5%

The asset class distribution is predominantly in stocks, followed by cash, bonds, and real estate. This allocation provides a broad diversification across asset classes, helping to mitigate risk while capturing growth. Stocks typically offer higher returns but come with increased volatility, while bonds and cash provide stability. This balance aligns well with a cautious risk profile. Consider whether the current allocation matches your long-term financial goals, as adjusting the weightings could enhance alignment with your risk tolerance and investment horizon.

Sectors Info

  • Technology
    19%
  • Financials
    11%
  • Health Care
    8%
  • Consumer Discretionary
    7%
  • Industrials
    7%
  • Real Estate
    7%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%

The portfolio is diversified across several sectors, with the largest allocations in technology, financial services, and healthcare. This sectoral balance reflects a typical market composition, providing exposure to various economic drivers. Technology-heavy portfolios can experience higher volatility, especially during interest rate changes, while financial services and healthcare offer stability. Regularly reviewing sector weights and adjusting as needed can help ensure the portfolio remains aligned with market trends and personal investment objectives.

Regions Info

  • North America
    61%
  • 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, with limited exposure to Europe, Asia, and other regions. This concentration can impact diversification, as regional economic shifts may affect performance. While North America has historically been a strong performer, diversifying further geographically could reduce risk and capture growth in emerging markets. Consider whether increasing exposure to underrepresented regions aligns with your investment strategy and risk tolerance.

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 can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio. This optimization focuses on reallocating existing assets to maximize returns for a given level of risk. While the current allocation is well-balanced, exploring potential adjustments could enhance efficiency. Consider whether optimizing the portfolio aligns with your financial goals, as changes could improve performance without increasing risk, contributing to a more strategic investment approach.

Dividends Info

  • Direxion Auspice Broad Commodity Strategy ETF 3.30%
  • iShares® 0-3 Month Treasury Bond ETF 5.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.90%
  • Vanguard Total International Stock Index Fund ETF Shares 1.70%
  • The Real Estate Select Sector SPDR Fund 2.40%
  • Weighted yield (per year) 1.46%

The portfolio's dividend yield is 1.46%, with contributions from various ETFs. Dividends provide a steady income stream, which can be reinvested for growth or used for income. This yield is moderate and aligns with a cautious risk profile, offering some protection against market volatility. Consider whether the current dividend strategy meets your financial needs, as adjusting the focus on income versus growth could enhance alignment with your investment goals.

Ongoing product costs Info

  • Direxion Auspice Broad Commodity Strategy ETF 0.80%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • WisdomTree Bloomberg U.S. Dollar Bullish Fund 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • The Real Estate Select Sector SPDR Fund 0.09%
  • Weighted costs total (per year) 0.17%

The portfolio's total expense ratio (TER) is 0.17%, which is relatively low and supports better long-term performance by minimizing costs. Lower fees mean more of your investment's returns are retained, enhancing compounding benefits over time. This cost efficiency aligns well with best practices for portfolio management. Regularly reviewing fees and exploring lower-cost alternatives can help maintain cost-effectiveness and improve overall returns, contributing to a more efficient investment strategy.

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