Aggressive Portfolio with Low Diversification and High Tech Exposure in North America

Report created on Nov 23, 2024

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards major tech giants with Meta, NVIDIA, Amazon, Alphabet, and Apple making up the majority. This concentration in a few high-growth stocks suggests a focus on capital appreciation rather than income generation. With 100% allocation in common stocks, it's a high-risk, high-reward setup. This composition reflects a strong belief in the continued dominance of these companies. However, such a concentrated approach can lead to significant volatility. Diversifying into different sectors or asset classes could help balance the risk while still capturing growth opportunities.

Growth Info

Historically, the portfolio has delivered impressive returns with a CAGR of 38.69%, indicating strong growth potential. However, the max drawdown of -60.6% highlights the volatility and risk associated with such a concentrated portfolio. This performance suggests that while the potential for high returns is substantial, the risk of significant losses is also present. Investors should be prepared for large swings in value. To mitigate this, consider a more diversified approach or maintaining a long-term perspective to weather short-term volatility.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio shows a wide range of potential outcomes. With a hypothetical initial investment, the median projection suggests a 7,032.58% return, while even the lower 5th percentile predicts a 478.36% gain. These projections highlight the potential for significant growth but also underscore the inherent uncertainty and risk. Investors should use these simulations to understand the range of possible outcomes and ensure their risk tolerance aligns with these scenarios. Regularly reviewing and adjusting the portfolio can help manage risk.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of common stocks, which indicates a high-risk profile. This single asset class exposure suggests a focus on capital growth rather than income or stability. While equities can offer substantial returns, they also come with increased volatility compared to other asset classes like bonds or real estate. To manage risk, consider incorporating other asset classes that may provide stability and income, such as bonds or dividend-paying stocks, which can help balance the overall risk-return profile.

Sectors Info

  • Technology
    40%
  • Telecommunications
    35%
  • Consumer Discretionary
    25%

Sector allocation is heavily skewed towards technology, communication services, and consumer cyclicals, with technology alone comprising 40% of the portfolio. This concentration can drive strong performance during tech booms but also exposes the portfolio to sector-specific risks. A downturn in tech could significantly impact the portfolio's value. To mitigate sector risk, consider diversifying into other industries such as healthcare or financials. This broader exposure can help cushion against sector-specific downturns while still allowing for growth opportunities.

Regions Info

  • North America
    100%

Geographically, the portfolio is 100% concentrated in North America, specifically the U.S. market. While the U.S. is a major global economic player, this lack of geographic diversification can expose the portfolio to country-specific risks, such as economic downturns or regulatory changes. Including international stocks could provide exposure to different economic cycles and growth opportunities. Diversifying geographically can help reduce risk and enhance potential returns by tapping into global growth trends and reducing reliance on a single market.

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 is close to the efficient frontier, indicating it's well-optimized for its current risk level. However, it's not the optimal portfolio, which has a higher expected return and a different risk profile. Investors can adjust their risk preferences by moving along the efficient frontier. To achieve a riskier portfolio, consider increasing exposure to high-growth stocks, while a more conservative approach could involve adding bonds or dividend stocks. Regularly reviewing the portfolio's alignment with personal risk tolerance and financial goals can help maintain an optimal balance.

Dividends Info

  • Apple Inc 0.40%
  • Alphabet Inc Class A 0.20%
  • Meta Platforms Inc. 0.30%
  • Microsoft Corporation 0.50%
  • Weighted yield (per year) 0.16%

The portfolio's dividend yield is relatively low, at 0.16%, reflecting its focus on growth stocks rather than income generation. This is typical for a portfolio centered around high-growth companies, which often reinvest earnings back into the business rather than paying out dividends. While this strategy can lead to substantial capital appreciation, it may not suit investors seeking regular income. For those interested in income, consider integrating dividend-paying stocks or other income-generating assets to provide a steady cash flow alongside growth potential.

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