A growth-focused portfolio with high concentration in a single ETF and limited geographic diversity

Report created on Apr 25, 2025

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 with 90% in the Vanguard Total Stock Market Index Fund ETF, complemented by two small-cap stocks, Liquidmetal Technologies and Palantir Technologies, each at 5%. This composition leans towards a growth strategy with limited diversification. A more diversified portfolio might include additional asset classes like bonds or commodities to mitigate risk. By spreading investments across various asset types, you can potentially reduce volatility and enhance stability.

Growth Info

Historically, the portfolio has demonstrated impressive growth with a CAGR of 18.59%, outpacing many benchmarks. However, it also faced a significant maximum drawdown of -29.59%, indicating vulnerability to market downturns. While past performance shows strong growth, it's important to remember that such returns are not guaranteed in the future. Consider balancing high-growth assets with more stable investments to cushion against potential losses during market corrections.

Projection Info

The Monte Carlo simulation, which uses historical data to predict potential outcomes, suggests a wide range of future returns, from a 5th percentile loss of -87.4% to a 67th percentile gain of 5,368.8%. This highlights the portfolio's high-risk, high-reward nature. While the median projection is positive, the variability underscores the importance of planning for various scenarios. Diversifying further could help stabilize potential outcomes, offering more predictable returns.

Asset classes Info

  • Stocks
    100%

With 100% allocation in stocks, the portfolio lacks diversification across asset classes. Stocks can offer high returns but also come with increased risk. Incorporating other asset classes, such as bonds or real estate, could provide a buffer during stock market volatility. A diverse mix of assets typically leads to a smoother investment journey, allowing for better risk management and potentially more consistent returns over time.

Sectors Info

  • Technology
    32%
  • Financials
    13%
  • Industrials
    13%
  • Health Care
    10%
  • Consumer Discretionary
    10%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    2%

The sector allocation shows a technology-heavy portfolio with 32% in tech, followed by financial services and industrials at 13% each. This concentration in tech could lead to higher volatility, especially during economic downturns or interest rate hikes. Balancing sector investments by including more consumer staples or utilities could reduce risk. A well-rounded sector allocation helps protect against sector-specific downturns, ensuring a more resilient portfolio.

Regions Info

  • North America
    100%

Geographically, the portfolio is entirely focused on North America, lacking exposure to international markets. This can limit diversification and increase vulnerability to regional economic shifts. Introducing international equities, particularly from emerging markets, could enhance diversification and provide growth opportunities. A global approach can help balance regional economic cycles, offering a more comprehensive investment strategy.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    32%
  • Mid-cap
    18%
  • Micro-cap
    7%
  • Small-cap
    6%

The portfolio is diversified across market capitalizations, with a significant 37% in mega-cap stocks and a balanced mix of big, medium, small, and micro caps. This variety can help mitigate risk as different market cap segments often perform differently under various market conditions. Maintaining this balance is beneficial, but consider adjusting weights if market conditions shift to ensure continued alignment with growth objectives.

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 asset allocation does not align with the Efficient Frontier, which represents the best possible risk-return ratio. By adjusting the weights of existing assets, the portfolio could achieve a more optimal balance. This doesn't necessarily mean adding new assets but reallocating within the current holdings to align with desired risk levels. Optimizing for the Efficient Frontier can enhance returns without increasing risk.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Weighted yield (per year) 1.26%

The portfolio's dividend yield is moderate at 1.26%, primarily from the Vanguard ETF. While dividends contribute to returns, the focus remains on capital appreciation. For income-focused investors, increasing exposure to high-dividend-paying stocks or dividend-focused funds could boost income. Balancing growth and income can provide a steady cash flow while still benefiting from potential market gains.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from low costs, with the Vanguard ETF's TER at just 0.03%. Low fees enhance long-term returns by minimizing the drag on performance. Maintaining low-cost investments is crucial for maximizing net returns, especially in a growth-focused strategy. Continuously monitoring and optimizing costs ensures that more of your investment earnings contribute directly to your financial goals.

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