A well-diversified portfolio with a strong focus on large-cap stocks and U.S. exposure

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor with moderate risk tolerance and a focus on growth, seeking broad market exposure. The substantial equity allocation indicates a preference for capital appreciation over income, suitable for a long-term investment horizon. This investor values cost efficiency and diversification but is comfortable with some volatility. The emphasis on large-cap stocks and U.S. exposure suggests a belief in the stability and growth potential of established markets. This approach is ideal for those aiming to build wealth steadily over time.

Positions

  • Vanguard Total World Stock Index Fund ETF Shares
    VT - US9220427424
    30.00%
  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    30.00%
  • Berkshire Hathaway Inc
    BRK-B - US0846707026
    15.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    10.00%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    7.00%
  • Raytheon Technologies Corp
    RTX - US75513E1010
    5.00%
  • Defiance Quantum
    QTUM - US26922A4206
    3.00%

This portfolio is composed primarily of ETFs, with a notable allocation to Vanguard Total World Stock Index Fund ETF Shares and Vanguard Total Stock Market Index Fund ETF Shares, each at 30%. Additionally, it includes individual stocks like Berkshire Hathaway and Raytheon Technologies. This structure indicates a focus on broad market exposure and a mix of passive and active investments. Compared to a typical balanced benchmark, the portfolio leans heavily on equities, which can enhance growth potential but also increase volatility. Ensuring a balance between these elements is crucial for maintaining risk within acceptable limits.

Growth Info

The portfolio's historical performance, with a CAGR of 13.71%, is impressive, indicating strong growth over time. This is particularly noteworthy when compared to typical market benchmarks, which often achieve lower rates. However, the maximum drawdown of -23.85% reveals periods of significant volatility, underscoring the importance of maintaining a diversified asset base. While past performance is no guarantee of future results, understanding these trends can help in setting realistic expectations and preparing for potential downturns.

Projection Info

Monte Carlo simulations, which use historical data to predict future outcomes, suggest a wide range of potential returns. The portfolio's 50th percentile projection indicates a substantial growth potential of 619.7%, while even the 5th percentile shows positive returns. With 995 out of 1,000 simulations yielding positive outcomes, the forward projection appears optimistic. However, it's essential to remember that these simulations rely on historical data, which may not account for future market changes or unforeseen events.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio is heavily concentrated in stocks, with 99% of assets in this class. This allocation can drive growth but also exposes the portfolio to market volatility. A more balanced approach might include bonds or alternative investments to mitigate risk. Compared to typical balanced benchmarks, this stock-heavy allocation may outperform in bull markets but could underperform during downturns. Diversifying across asset classes can help smooth returns and reduce overall portfolio risk.

Sectors Info

  • Financials
    27%
  • Technology
    24%
  • Industrials
    13%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    7%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio's sector allocation is well-distributed, with significant exposure to financial services and technology, comprising 27% and 24% respectively. This aligns with common benchmarks but may introduce sector-specific risks, particularly in technology, which can be volatile during interest rate changes. Maintaining sector balance is crucial to avoid overexposure to any single industry. Regularly reviewing sector trends and rebalancing can help ensure alignment with broader market movements and personal investment goals.

Regions Info

  • North America
    79%
  • Europe Developed
    9%
  • Japan
    4%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

With 79% of assets in North America, the portfolio is heavily weighted towards the U.S. market. This concentration can limit diversification benefits and increase vulnerability to regional economic shifts. Expanding international exposure, particularly in emerging markets, could enhance diversification and reduce reliance on the U.S. economy. While the current geographic allocation aligns with many U.S.-focused benchmarks, a more global approach may offer additional growth opportunities and risk mitigation.

Market capitalization Info

  • Mega-cap
    49%
  • Large-cap
    30%
  • Mid-cap
    15%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization allocation is skewed towards mega and big-cap stocks, making up 49% and 30% respectively. This focus on larger companies can provide stability and lower volatility compared to small-cap stocks. However, it may also limit growth potential. Incorporating more mid and small-cap stocks could enhance diversification and capture higher growth opportunities. Balancing exposure across different market caps can optimize risk-return dynamics and align with long-term investment objectives.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Vanguard Total World Stock Index Fund ETF Shares
    High correlation

The portfolio includes highly correlated assets, particularly the Vanguard Total Stock Market Index Fund ETF Shares and Vanguard Total World Stock Index Fund ETF Shares. High correlation means these assets tend to move together, which can reduce diversification benefits. During market downturns, this could lead to increased risk. Consider replacing one of these ETFs with a less correlated asset to enhance diversification and manage risk more effectively. This adjustment could improve the portfolio's overall resilience.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • Defiance Quantum 0.50%
  • Raytheon Technologies Corp 1.90%
  • Vanguard Total World Stock Index Fund ETF Shares 1.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.00%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.21%

The portfolio's total dividend yield is 1.21%, with contributions from various holdings like Raytheon Technologies and Vanguard ETFs. While not exceptionally high, dividends provide a steady income stream and can enhance total returns, especially in volatile markets. For investors seeking income, focusing on higher-yielding assets might be beneficial. However, balancing yield with growth potential is essential to maintain an optimal risk-return profile. Regularly reviewing dividend policies of holdings can ensure alignment with income goals.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Defiance Quantum 0.40%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.06%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.06%. This cost efficiency supports better long-term returns by minimizing the drag on performance. Low-cost ETFs like those from Vanguard contribute to this advantage. While costs are well-managed, it's important to regularly review expense ratios and seek opportunities to reduce them further. Keeping costs low without compromising on diversification or growth potential is key to optimizing portfolio performance over time.

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.

The portfolio can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio. Currently, overlapping assets limit diversification benefits. By addressing these overlaps, the portfolio's expected return could increase to 22.05% with a risk level of 16.38%. This optimization involves reallocating existing assets rather than introducing new ones. It's important to remember that efficiency focuses on maximizing returns for a given risk level, not necessarily achieving broader diversification or other specific goals.

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