Sector Analysis
The Endless Metrics Portfolio vs the S&P 500
One thing I have yet to talk about in regards to the Endless Metrics portfolio is sector weighting. That is, out of the eleven sectors of the stock market, what is the allocation of the portfolio to each one? Here is how that allocation looks alongside the weighting for the S&P 500:
At a glance, it seems like the thirteen stocks I own actually do a pretty good job of lining up with the S&P. However, if you take the difference between those bars in the chart, you can see they are not so similar:
Most notably, I don’t have anything from the communication sector yet. So, I will probably look to add in the coming round if I can find some good names.
At the end of the day, even though the goal is to make money (without taking on too much risk) and not to have the same allocation as the broader market, this is still a great exercise to identify potential blind spots and improve decision making overall. I’ll be sure to do periodic check ins on this as both the portfolio and the market evolve.
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