A three-legged stool in a world craving for sofas: Overconcentration and missed opportunities
Report created on Jun 25, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VI Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares
VIOV - US9219327783 34.00% -
VG Vanguard Information Technology Index Fund ETF Shares
VGT - US92204A7028 33.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 33.00%
This portfolio is like a three-course meal where every course is a variation of potatoes. With 34% in small-cap value, 33% in tech, and another 33% in the S&P 500, it's a bold move that screams, "I love roller coasters!" But here's the thing: investing shouldn't make your stomach drop. The overconcentration in just three ETFs under the guise of diversification is like putting all your eggs in one basket and then watching the basket.
Growth
Historically, this portfolio has a CAGR of 15.39%, which isn't too shabby until you realize it's like celebrating a touchdown when you're still 20 yards from the end zone. The -35.15% max drawdown is a harsh reminder that what goes up can come crashing down, especially when you're riding high on tech and small caps. Those 32 days making up 90% of returns? That's not strategy; that's luck, my friend.
Projection
Monte Carlo simulations are like weather forecasts for your investments, and this portfolio's forecast has a chance of hurricanes. With projections showing a wide range from 64.1% to a whopping 826.7%, it's clear there's potential. But remember, high volatility is the price of admission here. Betting big on tech and small caps makes for a bumpy ride. Prepare for the possibility of needing a financial umbrella or two.
Asset classes
- Stocks 99%
- Cash 1%
Stocks, stocks, and oh, wait, more stocks. With 99% in equities and a lonely 1% in cash, this portfolio is all in on the stock market. It's like going to Vegas and betting everything on black because "stocks only go up," right? Wrong. A little asset class diversification could prevent a future financial hangover. Maybe consider bonds or real estate as a chaser.
Sectors
- Technology 47%
- Financials 12%
- Consumer Discretionary 9%
- Industrials 8%
- Health Care 6%
- Telecommunications 4%
- Real Estate 4%
- Consumer Staples 3%
- Basic Materials 3%
- Energy 2%
- Utilities 2%
With nearly half the portfolio in tech, it's like having a diet that's 50% caffeine—great until it's not. The financial services and consumer cyclicals make guest appearances, but let's face it, this portfolio is attending the tech party and ignoring the rest of the invitees. Diversifying across sectors isn't just polite; it's smart investing. Don't be a one-party investor.
Regions
- North America 99%
This portfolio loves America more than apple pie, with a whopping 99% in North American assets. It's like refusing to travel anywhere else because you think there's no place like home. While home bias is common, international diversification could add some exotic flavors to this all-American diet, reducing risk and potentially enhancing returns.
Market capitalization
- Mega-cap 32%
- Micro-cap 21%
- Large-cap 20%
- Small-cap 15%
- Mid-cap 10%
The market cap allocation is like someone who can't decide between being a big fish in a small pond or a small fish in a big pond, so they awkwardly split their time between both. With a tilt towards mega and micro-caps, it's a bipolar approach to size that could use some middle ground. Balancing across market caps could help smooth out the ride.
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.
With an optimal portfolio suggesting a 22.22% expected return at a similar risk level, it's like realizing you've been using dial-up internet when fiber was available. The current setup is leaving money on the table for the sake of... what, exactly? Embracing a more balanced approach could turn that dial-up into high-speed wealth accumulation.
Dividends
- Vanguard Information Technology Index Fund ETF Shares 0.50%
- Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares 2.00%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.24%
The dividend yield here is trying, but it's like bringing a knife to a gunfight. With a total yield of 1.24%, it's clear income isn't the priority. But in a market downturn, those dividends could be the lifeline your portfolio needs. Maybe ramp up the income-producing assets? A little more cash flow never hurt anybody.
Ongoing product costs
- Vanguard Information Technology Index Fund ETF Shares 0.10%
- Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares 0.15%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.09%
The total expense ratio (TER) of 0.09% is like finding a dollar on the sidewalk: pleasantly surprising and rare in the investment world. Kudos for keeping costs low, but let's not throw a parade just yet. The real cost here is the opportunity lost by not diversifying more. Cheap can be good, but not if it's the only thing you're celebrating.
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