This portfolio has only about 4.2 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced Portfolio with Moderate Diversification and Low Costs

Report created on Jul 25, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed primarily of ETFs, with the Vanguard Total Stock Market Index Fund ETF Shares making up 72%. This heavy allocation towards a single fund indicates a strong bias towards broad U.S. market exposure. Additionally, the portfolio includes international stocks, a small cap value fund, and a bond fund, contributing to moderate diversification. The presence of a bond fund adds some stability, reducing overall volatility. However, the portfolio could benefit from a more balanced allocation to further mitigate risk and enhance returns.

Growth Info

Historically, the portfolio has shown a compound annual growth rate (CAGR) of 15.71%, which is quite impressive. However, the maximum drawdown of -23.88% indicates significant volatility during market downturns. This performance suggests that while the portfolio has the potential for high returns, it also carries substantial risk. The fact that 90% of returns are generated in just 24 days highlights the importance of staying invested during volatile periods. To better manage risk, it's essential to consider diversifying further or including more stable asset classes.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was analyzed. The simulation assumes a hypothetical initial investment and projects a wide range of possible outcomes. The median (50th percentile) projection shows a 451.5% increase, while the 5th percentile shows a 102.15% increase. This indicates a high probability of positive returns, with 998 out of 1,000 simulations showing gains. The annualized return across all simulations is 13.99%, suggesting a strong potential for future growth, albeit with some risk.

Asset classes Info

  • Stocks
    94%
  • Bonds
    4%
  • No data
    1%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, comprising 94.23% of the total allocation. Bonds make up a mere 3.96%, while other asset classes like cash and unclassified assets hold minimal percentages. This heavy stock allocation aligns well with a growth-focused strategy but may not suit investors looking for stability or income. To better balance risk and reward, consider increasing the allocation to bonds or other fixed-income assets. This can help cushion against market volatility and provide more consistent returns.

Sectors Info

  • Technology
    24%
  • Financials
    14%
  • Health Care
    11%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    5%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The sector allocation is diverse, with technology leading at 24.44%, followed by financial services and healthcare. This spread across various sectors helps mitigate sector-specific risks. However, the high concentration in technology could expose the portfolio to significant volatility if the tech sector underperforms. To further enhance diversification, consider reducing the weight in technology and increasing exposure to more stable sectors like consumer defensive or utilities. This approach can help smooth out returns and provide a more balanced risk profile.

Regions Info

  • North America
    84%
  • Europe Developed
    5%
  • Japan
    2%
  • Asia Emerging
    2%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is heavily skewed towards North America, which accounts for 84.27% of the allocation. Other regions like Europe Developed and Japan hold minor percentages. This concentration in North America exposes the portfolio to regional risks, such as economic downturns or policy changes. To diversify geographically, consider increasing exposure to emerging markets or other developed regions. This can help reduce the impact of regional economic fluctuations and provide opportunities for growth in different markets.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Total Bond Market Index Fund ETF Shares 3.40%
  • JPMorgan Equity Premium Income ETF 7.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 2.15%

The portfolio's dividend yield is not explicitly provided, but given the inclusion of funds like the JPMorgan Equity Premium Income ETF, it likely generates some income. Dividends can provide a steady income stream, which is particularly beneficial during periods of market volatility. To enhance the income potential, consider increasing the allocation to high-dividend-paying assets or funds. This can provide a more balanced approach, combining growth with income, and help meet both short-term and long-term financial goals.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • JPMorgan Equity Premium Income ETF 0.35%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) is impressively low at 0.07%, which is advantageous for long-term growth. Low costs mean more of the investment returns are retained, enhancing overall performance. Each ETF in the portfolio has a reasonable expense ratio, with the highest being 0.35% for the JPMorgan Equity Premium Income ETF. Keeping costs low is a crucial aspect of successful investing. To maintain this advantage, continue to monitor expense ratios and consider low-cost alternatives when rebalancing or adding new investments.

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