A portfolio that thinks diversification is just a fancy word for playing it safe
Report created on May 28, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
FX Fidelity 500 Index Fund
FXAIX - US3159117502 75.00% -
FZ FIDELITY ZERO INTERNATIONAL INDEX FUND
FZILX 25.00%
Let's start with the obvious: this portfolio loves the stock market like a kid loves candy, with a 100% allocation to stocks. It's like putting all your eggs in one basket and then asking why all the eggs are broken after a trip down the stairs. The 75% in a domestic index fund and 25% in an international index fund split screams, "I'm diversified!" while still ignoring entire asset classes. It's like saying you're a foodie because you eat both McDonald's and Burger King.
Growth
Historically, with a Compound Annual Growth Rate (CAGR) of 12.88%, this portfolio has been riding the bull market like a pro surfer. But remember, even the best surfers wipe out, as hinted by that -33.61% max drawdown. It's like enjoying the rollercoaster's highs so much you forget about the stomach-turning drops. Those 16 days making up 90% of returns? It's akin to betting your retirement on hitting green at the roulette wheel a couple of times.
Projection
Monte Carlo simulations, which are less about gambling in Monaco and more about predicting future portfolio performance, show a wide range of outcomes. With a median 285.8% growth, it suggests you might be onto something. However, the 5th percentile at a measly 7.3% growth is like planning a moon trip but barely making it to the stratosphere. It's a stark reminder that for all its past success, this portfolio could either be a space shuttle or a bottle rocket.
Asset classes
- Stocks 100%
Diving into asset classes, or in this case, asset class, since it's stocks or bust here. This approach is akin to playing soccer with only forwards; sure, you might score some goals, but you're leaving your net wide open. Diversifying across asset classes is like having a balanced team; it might not always be as exciting, but it'll likely save you some heartache when the market decides to play rough.
Sectors
- Technology 27%
- Financials 16%
- Health Care 11%
- Consumer Discretionary 10%
- Industrials 9%
- Telecommunications 9%
- Consumer Staples 6%
- Energy 4%
- Basic Materials 3%
- Utilities 3%
- Real Estate 2%
The sector spread is like a kid's first attempt at a balanced diet: heavily skewed towards what they like. With technology at 27%, it's like betting your house on the belief that Silicon Valley can do no wrong. The financial services and healthcare follow suit, suggesting a belief in the eternal growth of banks and hospitals. It's not the worst idea, but it's a bit like assuming sunny weather year-round and forgetting what rain looks like.
Regions
- North America 77%
- Europe Developed 10%
- Japan 4%
- Asia Emerging 3%
- Asia Developed 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
Geographically, this portfolio is heavily leaning on North America (77%), with a side of Europe and a sprinkle of everywhere else. It's as if you've decided that the world outside the US and Europe is just a myth. While home bias is common, this level of it is like refusing to acknowledge that good food exists outside your hometown.
Market capitalization
- Mega-cap 48%
- Large-cap 34%
- Mid-cap 17%
- Small-cap 1%
The market cap distribution is like someone who only shops at big-box retailers, ignoring the potential gems in small boutiques. With 48% in mega-caps, it's clear you're putting a lot of faith in the giants. While there's some diversification into big and medium caps, the tiny sliver in small caps (1%) is like tipping the waiter with the change you found under your couch cushions.
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.
Looking at risk vs. return optimization, this portfolio is like a muscle car—great on straightaways but questionable on turns. The heavy stock allocation without much else for balance means you're optimized for growth in good times but left vulnerable when the market gets choppy. It's a bit like wearing flip-flops all year because it's sunny in July; come winter, you'll wish you had some boots.
Dividends
- Fidelity 500 Index Fund 1.30%
- FIDELITY ZERO INTERNATIONAL INDEX FUND 2.60%
- Weighted yield (per year) 1.62%
The dividend yield strategy here is modest, with an overall yield of 1.62%. It's like owning a lemonade stand that only operates on days when it's not too hot or too cold; sure, it brings in some money, but it's hardly a reliable income stream. Relying on dividends from a portfolio heavily skewed toward growth stocks is like expecting a cheetah to be a good house pet; it's not what they're built for.
Ongoing product costs
- Fidelity 500 Index Fund 0.02%
- Weighted costs total (per year) 0.02%
On the bright side, the total expense ratio (TER) of 0.02% is impressively low. It's like finding a luxury car with the fuel efficiency of a scooter. In a world where fees can eat into your returns like termites in a wooden house, this portfolio is built from bricks—at least in terms of costs.
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