When putting all your eggs in one basket was a strategy, not a cautionary tale
Report created on Nov 26, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SP Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 80.00% -
FC Fidelity Contrafund
FCNTX - US3160711095 20.00%
Glancing at this portfolio, it's as if diversification was a concept left on the cutting room floor. With a whopping 80% parked in a single ETF and the rest in a mutual fund, it's like betting on a horse race where you only know two horses. It's a bold strategy, Cotton; let's see if it pays off. This approach makes the portfolio about as balanced as a one-legged flamingo. The aim here should be to spread risks, not concentrate them like you're hoarding the last pieces of candy.
Growth
With a CAGR of 21.47%, it's tempting to pat yourself on the back until you remember that this performance came with a max drawdown of -30.62%. That's like celebrating a roller coaster ride for its highs while ignoring the fact that it nearly threw you out of your seat. Historical performance is helpful, but it's like relying on yesterday's weather forecast to plan a picnic—a risky bet at best. It's crucial to remember that past performance is not indicative of future results, especially with such a concentrated portfolio.
Projection
The Monte Carlo simulation seems to predict a sunny day at the races, with a median projected growth of 1,585.8%. However, relying on this without considering the thunderstorms (read: market volatility) is like planning a beach day based solely on a weather app's sunny icon. Monte Carlo simulations are useful for seeing potential outcomes, but they're essentially educated guesses. They can't predict market mood swings or account for the unique risks of a highly concentrated portfolio.
Asset classes
- Stocks 99%
- Cash 1%
- Other 1%
Stocks make up 99% of this portfolio, with a symbolic nod to cash at 1%. This is like going to a buffet and only loading up on the carbs—sure, it's delicious, but you're missing out on the nutritional balance. Diversifying across different asset classes can help cushion against the inevitable stock market tantrums and could provide more consistent returns over time.
Sectors
- Technology 34%
- Financials 20%
- Telecommunications 17%
- Industrials 9%
- Consumer Staples 5%
- Health Care 4%
- Consumer Discretionary 4%
- Utilities 3%
- Consumer Discretionary 2%
- Real Estate 1%
- Energy 1%
With a third of the portfolio in tech, it's apparent there's a bit of a tech addiction problem. While tech can offer explosive growth, it also comes with the volatility of a soap opera plotline. Diversification across sectors is like having friends in different social circles; when one group is going through drama, you have others to fall back on. This portfolio needs to branch out before it's left swiping for better returns in a downturn.
Regions
- North America 99%
This portfolio is the financial equivalent of "America First," with a 99% allocation to North America. While patriotic, it's also myopic. Ignoring the rest of the world's markets is like refusing to eat any food that's not from your hometown diner—you're missing out on a lot of flavors (and opportunities). Expanding geographically could introduce some much-needed variety and potential for growth.
Market capitalization
- Mega-cap 47%
- Large-cap 37%
- Mid-cap 14%
The mix of market caps shows a preference for the big guys, with 47% in mega and 37% in big caps. While this may seem like playing it safe, it's more like only hanging out with the popular kids. Including more mid-caps could add some spice and potential for growth, as they often represent companies on the rise, not just those that have already made it.
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.
This portfolio's idea of "optimization" seems to be sticking with what's comfortable rather than what's efficient. The current setup is leaving potential returns on the table for the sake of sticking with familiar names. It's like continuing to wear shoes that are a size too small because you like the color. Rebalancing towards a more efficient mix could provide better returns for the same level of risk, essentially giving your investments room to breathe and grow.
Dividends
- Fidelity Contrafund 8.40%
- Invesco S&P 500® Momentum ETF 0.70%
- Weighted yield (per year) 2.24%
The dividend yield strategy here is intriguing, with a high yield from the Fidelity Contrafund contrasting sharply with the ETF's modest payout. It's like having one worker bee and one queen bee; the balance could be better. Relying too much on dividends from a single source can be risky if market conditions change. Diversifying dividend sources could provide a steadier income stream and reduce risk.
Ongoing product costs
- Fidelity Contrafund 0.63%
- Invesco S&P 500® Momentum ETF 0.13%
- Weighted costs total (per year) 0.23%
The overall cost seems low, which is commendable. It's like finding a deal on a two-item buffet—it's great that it's cheap, but you're still leaving hungry. While keeping costs down is smart, it's also important to ensure you're not sacrificing potential growth and diversification for the sake of saving a few pennies. Sometimes, a little more expense can pay off in terms of broader market exposure and risk management.
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