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A portfolio that thinks diversification means buying different ETFs that do the same thing

Report created on May 6, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is like ordering different flavors of vanilla ice cream and expecting a rainbow sherbet experience. With 80% in various flavors of U.S. equities, mainly large caps, and a timid toe-dip into international waters, it's "moderately diversified" in the same way a diet of pizza, pasta, and breadsticks is "varied." The real kicker? Two stocks tacked on like afterthoughts, as if to say, "Look, we can be adventurous too!"

Growth Info

Historically, this portfolio has been the financial equivalent of a roller coaster designed by a cautious engineer: thrilling highs with a safety net. A CAGR of 12.64% is respectable, but let's be honest, when 90% of your returns come from 27 days, it's less about strategic genius and more about being in the right place at the right time. The max drawdown of -35.19% should be a wake-up call. This isn't a diversified portfolio; it's a high-stakes gamble with a fancy name.

Projection Info

Monte Carlo simulations are like weather forecasts for your money, and this portfolio's forecast has all the predictability of a British summer. Sure, the median projection looks sunny with a 311.3% increase, but the range from a chilly 10.8% to a scorching 505.5% suggests you should pack both sunscreen and a raincoat. And with 960 out of 1,000 simulations positive, it seems great—until you remember that Monte Carlo also assumes the past is a good predictor of the future, which, in finance, is like trusting a drunk with directions.

Asset classes Info

  • Stocks
    100%

"Stocks only" seems to be the motto here, with a 100% allocation that screams "YOLO" louder than a frat boy in Vegas. The lack of bonds, commodities, or even a hint of cash is like going on a road trip with no spare tire, map, or idea of where you're going. This isn't investing; it's hoping the stock market only goes up forever, which is about as realistic as a toddler's Christmas list to Santa.

Sectors Info

  • Technology
    23%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    9%
  • Consumer Staples
    8%
  • Industrials
    8%
  • Telecommunications
    8%
  • Energy
    7%
  • Real Estate
    6%
  • Basic Materials
    2%
  • Utilities
    2%

The sector spread is like deciding to diversify your diet by eating different kinds of junk food. Sure, you've got a slice from every pie—technology, healthcare, consumer goods—but when nearly a quarter of your portfolio is tech, it's like betting your nutritional health on pizza. The heavy lean on financial services and healthcare isn't much better. It's the equivalent of adding a diet cola and calling it a balanced meal.

Regions Info

  • North America
    90%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%

With 90% in North America, this portfolio has the global exposure of someone who thinks international travel means driving to the Canadian border for maple syrup. The token gesture towards Europe and Asia is like saying you're worldly because you once ate at an Italian restaurant and own a sushi set. This isn't diversification; it's geographical myopia.

Market capitalization Info

  • Large-cap
    43%
  • Mega-cap
    35%
  • Mid-cap
    19%
  • Small-cap
    2%

Big and mega caps dominate this portfolio like a schoolyard bully, making up 78% of the allocation. It's the investment equivalent of only making friends with the big kids, hoping they'll protect you when trouble starts. Sure, it might work, but what about when all the big kids are out sick? That tiny 2% in small caps isn't going to save you from a market downturn.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The correlation between the Vanguard S&P 500 ETF and the Schwab U.S. Large-Cap Growth ETF is like having twins in different outfits and thinking no one will notice they're related. This isn't diversification; it's duplication with extra steps. The portfolio's strategy seems to be throwing darts at the same dartboard and hoping for different results.

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.

Talking about optimization for this portfolio is like discussing water conservation strategies while leaving the tap running. The first step to "optimization" would be recognizing that holding highly correlated assets and calling it diversification is like putting two left shoes on and expecting to walk straight. Before we even talk about the Efficient Frontier, let's try aiming for a portfolio that doesn't mimic the S&P 500 with extra steps.

Dividends Info

  • Ares Capital Corporation 9.40%
  • Realty Income Corp 5.10%
  • Schwab U.S. Dividend Equity ETF 4.00%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 2.60%

The dividends here are like finding loose change under the couch cushions; nice to have, but you're not funding a vacation with it. A total yield of 2.60% is decent, but when your growth strategy is as aggressive as a caffeinated squirrel, it's like putting a band-aid on a broken leg. The high yields from Ares Capital and Realty Income are like consolation prizes for a portfolio that's sprinting when it should be pacing itself.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

At least the costs are low, with a Total TER of 0.04%. This is the one area where the portfolio doesn't shoot itself in the foot. It's like finding a cheap, reliable car; it's great for your wallet but doesn't change the fact that you're using it to drive in circles.

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