A growth-focused portfolio heavily concentrated in technology stocks with low geographic diversification

Report created on Dec 31, 2024

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 heavily concentrated in technology stocks, with Apple Inc alone accounting for 64% of the total. This lack of diversification is risky because if Apple faces challenges, it could significantly impact overall performance. A more balanced portfolio typically includes a variety of asset types, such as bonds or real estate, to spread risk. Consider diversifying by adding different asset classes to reduce reliance on a single stock. This could help cushion the portfolio against sector-specific downturns and provide a more stable return.

Growth Info

Historically, the portfolio has performed well, boasting a Compound Annual Growth Rate (CAGR) of 25.67%. This impressive growth rate indicates strong past performance, especially compared to typical market averages. However, past performance does not guarantee future results, and the portfolio's maximum drawdown of -32.82% highlights significant volatility. It's important to prepare for similar fluctuations in the future. Regularly reviewing the portfolio and considering diversification can help manage risk and maintain growth potential over time.

Projection Info

Using Monte Carlo simulations, which analyze potential future outcomes based on historical data, the portfolio shows promising growth potential. The median projection indicates a 756.07% increase, while the 5th percentile shows a 15.58% return, suggesting a wide range of possible outcomes. Although simulations provide valuable insights, they are not foolproof and should be used as one of many tools in planning. To enhance accuracy, consider running simulations regularly and adjusting the portfolio based on updated results and market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is 100% in stocks, which limits diversification and increases exposure to market volatility. A well-diversified portfolio typically includes multiple asset classes like bonds, real estate, and commodities. These can provide stability and reduce risk during stock market downturns. Consider gradually introducing other asset classes to create a more balanced and resilient investment strategy. This approach can help achieve a better risk-return balance and potentially improve long-term performance.

Sectors Info

  • Technology
    64%
  • Telecommunications
    22%
  • Health Care
    6%
  • Consumer Discretionary
    4%
  • Consumer Staples
    2%
  • Energy
    2%

The portfolio is heavily weighted towards the technology sector, comprising 64% of its holdings, followed by communication services at 22%. This concentration increases susceptibility to sector-specific risks, such as regulatory changes or technological disruptions. While technology has been a strong performer, diversifying into other sectors like healthcare or consumer goods could provide more stability. By spreading investments across various sectors, the portfolio can better withstand economic cycles and reduce the impact of adverse events in any single industry.

Regions Info

  • North America
    100%

With 100% of investments in North America, the portfolio lacks geographic diversification. This focus on a single region can expose the portfolio to regional economic risks, such as changes in trade policies or currency fluctuations. Diversifying into international markets can help mitigate these risks and tap into growth opportunities abroad. Consider adding exposure to emerging markets or developed economies outside North America to enhance diversification and potentially improve overall returns.

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's current allocation may not be optimized along the Efficient Frontier, which represents the best possible risk-return trade-off. By adjusting the mix of assets, it's possible to achieve a more efficient portfolio that maximizes returns for a given level of risk. Consider exploring different asset combinations and rebalancing periodically to maintain optimal efficiency. This strategy can help achieve investment goals while managing risk effectively, ensuring a more robust and resilient portfolio over time.

Dividends Info

  • Apple Inc 0.40%
  • Alphabet Inc Class A 0.30%
  • Mondelez International Inc 2.20%
  • Schlumberger NV 2.20%
  • Thermo Fisher Scientific Inc 0.20%
  • Weighted yield (per year) 0.42%

The portfolio's total dividend yield is relatively low at 0.42%, reflecting its growth-oriented focus. While dividends are not the primary goal for growth investors, they can provide a steady income stream and enhance total returns. For those seeking income, consider incorporating higher-yielding stocks or dividend-focused funds. Balancing growth and income can offer a more comprehensive approach to wealth accumulation and provide additional financial security during market fluctuations.

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