A high-growth tech-focused portfolio with limited diversification and significant North American exposure

Report created on Jan 8, 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 weighted towards technology stocks, with Microsoft and NVIDIA making up 50% of the allocation. This concentration in a single sector can increase risk, as downturns in tech could significantly impact performance. Compared to a more balanced benchmark, this portfolio lacks diversification across different industries and asset types. It's important to consider adding non-tech stocks or different asset classes to reduce potential volatility and improve overall stability.

Growth Info

Historically, the portfolio has delivered impressive returns, with a Compound Annual Growth Rate (CAGR) of 37.92%. However, it's crucial to note the significant drawdown of -56.56%, indicating vulnerability during market downturns. While past performance shows potential for high returns, it also highlights the portfolio's riskiness. Investors should be prepared for periods of substantial volatility and consider strategies to mitigate this risk, such as diversifying into less correlated assets.

Projection Info

The forward projection using Monte Carlo simulations suggests a wide range of potential outcomes, with an annualized return of 46.36%. Monte Carlo analysis uses historical data to simulate various future scenarios, providing insight into possible returns. However, it's important to remember that these projections are not guarantees. The high variability in outcomes underscores the need for a balanced approach, possibly incorporating more conservative investments to manage risk effectively.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, which can lead to greater volatility compared to a diversified mix of asset classes. Stocks generally offer higher growth potential, but also come with increased risk. By incorporating bonds or other fixed-income assets, the portfolio could achieve a better risk-return balance. This approach can help cushion against stock market fluctuations and provide more stable returns over time.

Sectors Info

  • Technology
    74%
  • Financials
    14%
  • Consumer Discretionary
    8%
  • Telecommunications
    5%

With 73.5% of the portfolio in technology, there's a heavy reliance on this sector. While tech has been a strong performer, it can be susceptible to rapid changes due to innovation cycles and regulatory shifts. The financial services and consumer cyclical sectors provide some diversification, but their combined allocation is relatively small. Broadening sector exposure could help mitigate sector-specific risks and enhance long-term stability.

Regions Info

  • North America
    100%

The portfolio's 100% allocation to North American stocks limits geographic diversification. While North America is a major economic hub, global exposure can offer additional growth opportunities and risk mitigation. International investments can provide access to emerging markets and different economic cycles. Expanding geographic reach could enhance diversification and potentially improve overall returns.

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 risk-return profile can potentially be optimized using the Efficient Frontier, a concept that identifies the best possible risk-return ratio for a given set of assets. This involves adjusting asset weights to achieve maximum returns for a specific level of risk. While the current allocation is growth-focused, exploring different combinations could uncover a more efficient balance. This process can help align the portfolio with individual risk appetites and investment goals.

Dividends Info

  • Mastercard Inc 0.40%
  • Microsoft Corporation 0.70%
  • Visa Inc. Class A 0.70%
  • Weighted yield (per year) 0.30%

The portfolio's dividend yield is relatively low at 0.3%, reflecting its growth-oriented nature. Dividends can provide a steady income stream, which is valuable for investors seeking regular cash flow. While growth stocks often reinvest profits rather than pay dividends, introducing dividend-paying stocks could enhance income generation. This strategy can offer a balance between growth and income, catering to different investment goals.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey