This portfolio has only about 10 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 and Broadly Diversified Portfolio with Strong Historical Performance

Report created on Jul 30, 2024

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 composed of three ETFs: Vanguard S&P 500 ETF (55%), Schwab U.S. Dividend Equity ETF (25%), and Vanguard Total International Stock Index Fund ETF Shares (20%). This composition reflects a balanced approach with a strong focus on U.S. equities, supplemented by international exposure. The allocation suggests a preference for large-cap stocks and dividend-paying equities, which can provide both growth and income. To optimize, consider periodically reviewing the allocation to ensure it aligns with long-term goals and risk tolerance.

Growth Info

Historically, the portfolio has shown a solid performance with a compound annual growth rate (CAGR) of 11.32%. However, it experienced a maximum drawdown of -33.69%, indicating significant volatility during market downturns. This performance suggests that while the portfolio can generate strong returns, it is not immune to market fluctuations. To mitigate such risks, consider maintaining a diversified mix of assets and possibly incorporating more stable investments like bonds.

Projection Info

Using a Monte-Carlo simulation with 1,000 iterations, the portfolio's future performance was projected. The simulation, assuming a hypothetical initial investment, shows that the 5th percentile end value is 31.54%, the median (50th percentile) is 271.43%, and the 67th percentile is 405.34%. With 980 out of 1,000 simulations showing positive returns and an annualized return of 11.27%, the portfolio demonstrates a high probability of achieving positive outcomes. Regularly reviewing and rebalancing the portfolio can help maintain these favorable projections.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted in stocks, with 99.33% allocated to equities, a small portion in cash (0.65%), and negligible amounts in other categories. This concentration in stocks aligns with a growth-oriented strategy but can increase volatility. Diversifying into other asset classes, such as bonds or alternative investments, could reduce risk and provide more stability during market downturns. This approach would help balance growth potential with risk management.

Sectors Info

  • Technology
    22%
  • Financials
    15%
  • Health Care
    12%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Consumer Staples
    8%
  • Telecommunications
    7%
  • Energy
    7%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio spans multiple sectors, with significant allocations in Technology (21.75%), Financial Services (15.24%), and Healthcare (12.42%). These sectors are known for their growth potential but also come with varying degrees of risk. The broad sector diversification helps mitigate sector-specific risks. To further enhance stability, consider periodically reviewing sector allocations and adjusting to maintain a balanced exposure across different economic cycles.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America (81.08%), with smaller allocations in Europe Developed (8.34%), Japan (3.31%), and other regions. This heavy North American focus aligns with the portfolio's core holdings in U.S. equities. While this can be beneficial given the strength of the U.S. market, increasing exposure to other regions could provide additional diversification benefits and reduce geographic risk. Consider gradually increasing investments in international markets.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.40%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 2.16%

The portfolio includes the Schwab U.S. Dividend Equity ETF, which focuses on dividend-paying stocks. This provides a steady income stream, complementing the growth potential of the other ETFs. Dividends can be particularly beneficial during market downturns as they provide a source of income even when capital gains are not realized. Reinvesting dividends can also enhance long-term growth through compounding. Regularly reviewing dividend yields and ensuring they align with income goals is recommended.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, with individual costs for the Schwab U.S. Dividend Equity ETF at 0.06%, Vanguard S&P 500 ETF at 0.03%, and Vanguard Total International Stock Index Fund ETF Shares at 0.08%. Low costs are crucial as they directly impact net returns. Maintaining a focus on low-cost investments can significantly enhance long-term performance. Periodically reviewing and comparing costs with similar investment options can ensure continued cost efficiency.

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