Balanced portfolio leaning towards growth with significant exposure to stocks and cryptocurrencies

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor with a balanced risk profile who is nevertheless open to higher risk for potentially greater rewards. The significant allocation to equities and cryptocurrencies indicates a preference for growth and an acceptance of the volatility these assets can bring. It's best suited for those with a long-term investment horizon, who can weather short-term market fluctuations in pursuit of substantial long-term gains.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    70.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    20.00%
  • iShares Bitcoin Trust
    IBIT - US46438F1012
    10.00%

The portfolio is predominantly invested in equities, with a 70% allocation in the Vanguard Total Stock Market Index Fund ETF Shares, and a 20% allocation in the Vanguard Total International Stock Index Fund ETF Shares, providing broad exposure to the US and international stock markets. A notable 10% of the portfolio is invested in the iShares Bitcoin Trust, indicating a tilt towards higher risk and potential reward through cryptocurrency exposure. This composition suggests a strategy that balances traditional equity investments with a significant, albeit riskier, allocation to digital assets.

Warning Historical data is limited for this portfolio, which reduces the confidence in the calculated values.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 23.36%, with a maximum drawdown of -18.56%. This performance indicates a strong upward trend over time, albeit with significant volatility, as evidenced by the drawdown. The days contributing to 90% of returns being limited to just 14 suggests that the portfolio's gains are highly concentrated in short, sporadic bursts, typical of high-volatility assets like cryptocurrencies.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

Monte Carlo simulations project a wide range of potential outcomes, from a 5th percentile growth of 298.7% to a 67th percentile growth of 5,366.8%, with an annualized return across all simulations at 33.32%. This significant range underscores the high uncertainty and potential for both substantial gains and losses, reflecting the portfolio's aggressive growth orientation and the inherent volatility of its cryptocurrency component.

Asset classes Info

  • Stocks
    89%
  • Other
    10%
  • Cash
    1%
  • No data
    0%

The asset class distribution shows a heavy emphasis on stocks (89%) and a smaller allocation to other assets (10%), presumably the cryptocurrency, with a minimal cash holding (1%). This allocation supports the portfolio's growth objectives but also increases its susceptibility to market fluctuations, particularly in the equity and cryptocurrency markets.

Sectors Info

  • Technology
    27%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is well-diversified across technology (27%), financial services (14%), and consumer cyclicals (10%), among others, reflecting a balanced approach to sector exposure. However, the heavy weighting in technology may contribute to higher volatility, given this sector's sensitivity to market swings and interest rate changes.

Regions Info

  • North America
    71%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America (71%), with modest exposure to developed Europe (8%), Asia, and other regions. This geographic distribution suggests a focus on more stable, developed markets, though it may limit potential gains from emerging markets.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    27%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown shows a preference for larger companies (Mega 38%, Big 27%) over smaller ones (Medium 17%, Small 5%, Micro 2%). This orientation towards larger, potentially more stable companies may help mitigate some of the portfolio's risk associated with its cryptocurrency investment.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.31%

The portfolio's dividend yield is relatively modest, with the Vanguard Total Stock Market Index Fund ETF Shares yielding 1.10% and the Vanguard Total International Stock Index Fund ETF Shares yielding 2.70%, for a combined yield of 1.31%. This yield reflects the portfolio's growth focus over income generation.

Ongoing product costs Info

  • iShares Bitcoin Trust 0.12%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from low costs, with Total Expense Ratios (TER) of 0.03% for the Vanguard Total Stock Market Index Fund ETF Shares, 0.05% for the Vanguard Total International Stock Index Fund ETF Shares, and 0.12% for the iShares Bitcoin Trust, averaging to an overall TER of 0.04%. These low costs are advantageous for long-term growth.

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.

Given the portfolio's current composition and performance, optimization could involve evaluating the risk-return trade-off of the cryptocurrency allocation. While it contributes to potential high returns, its volatility also increases the portfolio's overall risk. Adjusting this allocation could enhance the portfolio's efficiency on the Efficient Frontier, potentially achieving a more favorable risk-return balance.

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