Highly speculative portfolio with concentrated holdings in industrials and technology sectors

Report created on Dec 15, 2024

Risk profile Info

7/7
Speculative
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily concentrated, with a significant 72.61% allocation in Rocket Lab USA Inc., indicating a strong reliance on this single stock's performance. The other holdings are much smaller, with KULR Technology Group Inc. being the second largest at 16.1%. Such concentration can expose the portfolio to substantial risk if Rocket Lab underperforms. It is crucial to understand that diversification helps mitigate risk by spreading investments across various assets. To reduce risk, consider reallocating some funds to diversify the holdings, potentially exploring other sectors or even different asset classes.

Growth Info

Historically, the portfolio has shown an impressive compound annual growth rate (CAGR) of 43.69%, but with a significant maximum drawdown of -74.6%. This indicates that while the portfolio has experienced high growth, it is also prone to large losses. Historical performance provides an understanding of how the portfolio has reacted to market conditions in the past, but it is important to note that past performance is not indicative of future results. To manage potential drawdowns, consider strategies such as stop-loss orders or diversifying into less volatile assets.

Projection Info

Using Monte Carlo simulations, the portfolio's potential future outcomes have been projected, showing a wide range of possibilities. While the median scenario suggests a 74.64% return, the worst-case scenario could lead to a near-total loss (-99.94%). Monte Carlo simulations use historical data to simulate thousands of potential future outcomes, providing insight into possible risks and returns. However, they rely on historical data, which may not fully capture future market dynamics. To prepare for various scenarios, consider stress-testing the portfolio under different market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of common stocks, which means it lacks diversification across asset classes. This concentration in a single asset class heightens the portfolio's risk, as it is entirely dependent on the equity market's performance. Diversifying into other asset classes, such as bonds, real estate, or commodities, can help reduce volatility and provide a more balanced risk-return profile. Consider exploring options to include a mix of asset classes to achieve better diversification.

Sectors Info

  • Industrials
    80%
  • Technology
    19%
  • Health Care
    2%

The portfolio is predominantly invested in the industrials sector, comprising 79.7% of the holdings, followed by technology at 18.52%. This sectoral concentration can expose the portfolio to industry-specific risks, such as regulatory changes or technological disruptions. Diversifying across more sectors can mitigate these risks and provide a buffer against sector-specific downturns. Consider reallocating investments to include exposure to sectors like consumer goods, healthcare, or financials to achieve a more balanced sectoral allocation.

Regions Info

  • North America
    100%

With 100% of the portfolio's assets based in North America, there is no geographic diversification, which could expose the portfolio to regional economic and political risks. Geographic diversification can help manage these risks by spreading investments across different regions, potentially benefiting from growth in emerging markets or other global economies. Consider exploring international stocks or funds to diversify geographically and reduce reliance on the North American market.

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 could be optimized using the Efficient Frontier to achieve a better risk-return ratio. This involves adjusting the asset allocation to maximize expected returns for a given level of risk. The analysis suggests that an optimized portfolio could achieve a 99.26% expected return with a lower risk level. To optimize the portfolio, consider reallocating among the current assets, focusing on achieving the best possible balance between risk and return without adding new assets.

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