A cautious portfolio with strong diversification and moderate bond exposure

Report created on Apr 8, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is composed of three main funds: Vanguard Total Stock Market Index Fund (42%), Vanguard Total Bond Market Index Fund (40%), and Vanguard Total International Stock Index Fund (18%). This allocation reflects a balanced approach, heavily weighted towards equities and bonds, aligning with a cautious investor's needs. A well-diversified portfolio helps manage risk by spreading investments across various asset classes, reducing the impact of any single asset's poor performance. This composition aligns with a cautious risk profile, offering stability with potential for growth. Consider periodically reviewing the weightings to ensure they remain aligned with your risk tolerance and financial goals.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 6.39% with a maximum drawdown of -23.55%. This indicates moderate growth with some exposure to market volatility. Comparing this to a benchmark can provide context on whether these returns are competitive. The past performance suggests a stable yet cautious growth trajectory, suitable for those prioritizing capital preservation with a steady increase. However, remember that past performance does not guarantee future results. Regularly reviewing performance metrics can help ensure the portfolio continues to meet your expectations.

Projection Info

Monte Carlo simulations, which use historical data to project potential outcomes, show a median return of 105.7% with 902 out of 1,000 simulations yielding positive returns. This suggests a strong likelihood of achieving positive outcomes over time. However, the 5th percentile projection indicates a potential loss of -16.1%, highlighting inherent risks. While these projections provide a range of possible outcomes, they are not predictions. It's important to remain flexible and adjust your strategy as needed, considering your risk tolerance and investment horizon.

Asset classes Info

  • Stocks
    59%
  • Bonds
    40%
  • Cash
    1%

With 59% in stocks and 40% in bonds, this portfolio is well-diversified across asset classes, providing a balance between growth and income. Bonds offer stability and income, while stocks provide growth potential. This allocation aligns with a cautious investment strategy, helping to manage risk and reduce volatility. Compared to common benchmarks, this allocation is conservative yet effective for capital preservation. Regularly reviewing asset class allocation ensures it remains aligned with your financial goals and risk tolerance.

Sectors Info

  • Technology
    15%
  • Financials
    10%
  • Consumer Discretionary
    6%
  • Industrials
    6%
  • Health Care
    6%
  • Telecommunications
    5%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio features a diverse sector allocation, with technology (15%), financial services (10%), and consumer cyclical (6%) being the largest. This distribution aligns with common benchmarks and provides broad exposure to various economic sectors. Such diversification can mitigate sector-specific risks, ensuring that downturns in one sector don't overly impact the entire portfolio. It's important to monitor sector trends and adjust allocations if necessary to capitalize on emerging opportunities or mitigate potential risks.

Regions Info

  • North America
    43%
  • No data
    40%
  • Europe Developed
    7%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America (43%), with significant exposure to unknown regions (40%) and smaller allocations in Europe and Asia. This reflects an emphasis on developed markets, which typically offer more stability. However, the lack of exposure to emerging markets may limit growth opportunities. Diversifying geographically can reduce region-specific risks and enhance potential returns. Consider increasing exposure to other regions to capture global growth trends and further diversify risk.

Market capitalization Info

  • Mega-cap
    25%
  • Large-cap
    18%
  • Mid-cap
    11%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization is primarily in mega (25%) and big (18%) companies, with smaller allocations in medium (11%), small (3%), and micro (1%) caps. This focus on larger companies provides stability and less volatility. However, smaller companies often offer higher growth potential. Balancing exposure across different market caps can enhance diversification and capture a broader range of opportunities. Periodically reassess market cap allocations to ensure they align with your risk tolerance and growth objectives.

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 can be optimized using the Efficient Frontier, which helps identify the best possible risk-return ratio based on current assets and allocation. This involves adjusting allocations to maximize returns for a given level of risk. While this optimization focuses on the current asset mix, it may not account for other goals like diversification. Regularly reviewing and adjusting allocations can help maintain an optimal risk-return balance and ensure alignment with your financial objectives.

Dividends Info

  • Vanguard Total Bond Market Index Fund Admiral Shares 3.40%
  • VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND ADMIRAL SHARES 3.40%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND ADMIRAL SHARES 1.10%
  • Weighted yield (per year) 2.43%

The portfolio's total dividend yield is 2.43%, with significant contributions from the bond and international stock funds. Dividends provide a steady income stream, which is particularly beneficial for cautious investors seeking income stability. This yield aligns with the portfolio's conservative strategy, offering income while preserving capital. Regularly reviewing dividend yields ensures they continue to meet your income needs and align with your overall investment strategy.

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