A balanced and moderately diversified portfolio with a strong focus on US stocks and bonds

Report created on Jul 31, 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 predominantly invested in the Vanguard Total Stock Market Index Fund Admiral Shares, constituting 85% of the portfolio, with the remaining 15% almost equally split between the Vanguard Total Bond Market Index Fund Admiral Shares and the Vanguard Wellesley Income Fund. This composition suggests a strong preference for equity exposure, complemented by a conservative allocation to bonds for risk mitigation. The allocation mirrors a balanced profile but leans towards aggressive due to the high stock concentration.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.37%, with a maximum drawdown of -32.16%. The days contributing to 90% of the returns number just 30, indicating significant returns are concentrated in short, volatile bursts. This performance pattern underscores the portfolio's reliance on equity markets, which can offer high returns but come with heightened risk and volatility.

Projection Info

Using Monte Carlo simulations, which project future outcomes based on historical data (though not guaranteeing future results), the portfolio shows a wide range of potential outcomes. With 957 out of 1,000 simulations yielding positive returns, the median projected growth is 127.4%, and the 5th percentile at 6.2%, suggesting a reasonable likelihood of positive returns but with significant variability, highlighting the importance of risk tolerance in investment decisions.

Asset classes Info

  • Stocks
    87%
  • Bonds
    12%
  • Cash
    1%

The asset class distribution, with 87% in stocks and 12% in bonds, indicates a strategy focused on growth through equity investments. This heavy allocation towards stocks is typical for investors with a higher risk tolerance and a longer time horizon, aiming for capital appreciation. The small bond allocation serves as a buffer against market volatility, though it may not significantly dampen the impact of severe market downturns.

Sectors Info

  • Technology
    27%
  • Financials
    14%
  • Health Care
    10%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    3%
  • Basic Materials
    2%

Sector allocation is heavily weighted towards Technology (27%), Financial Services (14%), and Healthcare (10%), reflecting a portfolio that may be more sensitive to economic cycles, regulatory changes, and sector-specific risks. This concentration in high-growth sectors can enhance returns but also increases volatility and sector-specific risk, suggesting a need for periodic review to ensure alignment with investment objectives and risk tolerance.

Regions Info

  • North America
    91%
  • No data
    8%
  • Europe Developed
    1%

Geographically, this portfolio is overwhelmingly concentrated in North America (91%), with minimal exposure to international markets. This heavy domestic focus may limit diversification benefits and exposure to potential growth in international markets, particularly in emerging economies. Diversifying geographically can reduce risk and capitalize on global economic growth.

Market capitalization Info

  • Mega-cap
    35%
  • Large-cap
    27%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown shows a preference for larger companies, with Mega and Big caps comprising 62% of the portfolio. This bias towards larger, more established companies can offer stability and lower volatility but may also limit growth potential compared to smaller, more agile companies. Considering a broader range of market caps could enhance diversification and growth prospects.

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.

Considering the Efficient Frontier, this portfolio could potentially be optimized for a better risk-return ratio by diversifying across more asset classes and geographic regions. While the current allocation is well-suited for growth-oriented investors with a balanced risk profile, exploring additional diversification opportunities could enhance returns and reduce volatility without significantly increasing risk.

Dividends Info

  • Vanguard Total Bond Market Index Fund Admiral Shares 3.50%
  • Vanguard Total Stock Market Index Fund Admiral Shares 0.90%
  • Vanguard Wellesley Income Fund 2.70%
  • Weighted yield (per year) 1.23%

The portfolio's dividend yield stands at 1.23%, with the bond fund contributing a 3.50% yield, which is significant for income-focused investors. While the overall yield is modest due to the large equity position, dividends can provide a steady income stream and contribute to total returns, especially in volatile or declining markets.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund Admiral Shares 0.04%
  • Vanguard Total Stock Market Index Fund Admiral Shares 0.04%
  • Vanguard Wellesley Income Fund 0.23%
  • Weighted costs total (per year) 0.05%

The portfolio's costs are impressively low, with a total expense ratio (TER) of 0.05%, which supports better long-term performance by minimizing the drag on returns. Keeping costs low is a fundamental principle of successful investing, as high fees can significantly erode long-term growth.

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