HOLDINGS

QQQ (Invesco QQQ Trust)

Including QQQ in an aggressive ETF model portfolio provides targeted exposure to high-growth sectors and leading innovative companies, offering the potential for superior long-term returns. Its liquidity, cost efficiency, and diversification within growth stocks further strengthen its role as a core holding in an aggressive growth-oriented portfolio.

• Technology and Growth Focus: QQQ tracks the Nasdaq-100, which is heavily weighted toward technology and growth-oriented companies.
• High Growth Potential: Includes many innovative, high-growth firms that can deliver outsized returns but with higher volatility.
• Aggressive Growth Tilt: Adds a growth-oriented, sector-concentrated element to the portfolio, boosting upside potential.

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VO (Vanguard Mid-Cap ETF)

Including the Vanguard Mid-Cap ETF (VO) in an aggressive ETF model portfolio enhances growth potential by adding mid-cap exposure, diversifies market capitalization risk, and broadens sector exposure beyond large-cap tech-heavy ETFs. This combination supports the aggressive portfolio’s goal of maximizing long-term capital appreciation while managing risk through diversification.

• • Mid-Cap Growth Exposure: Mid-cap stocks generally offer a balance between the stability of large caps and the growth potential of small caps.
  • Higher Growth Potential: Mid caps often have more room to grow than large caps, fitting an aggressive growth strategy.
  • Diversification within U.S. Equities: Adds breadth to U.S. equity exposure by including companies in a different market capitalization segment.

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 VEA (iShares MSCI EAFE ETF)

Including the Vanguard FTSE Developed Markets ETF (VEA) in an aggressive ETF model portfolio adds important geographic and sector diversification, reducing reliance on U.S. markets while maintaining exposure to global growth opportunities. This helps improve the portfolio’s risk-return profile and supports long-term capital appreciation goals consistent with an aggressive investment strategy.

• Diversification Beyond U.S. Markets: Even in a conservative portfolio, some international exposure can reduce concentration risk tied to the U.S. economy and currency. VEA provides access to developed international markets, helping diversify geopolitical and economic risk.
• Moderate Growth Potential: While conservative portfolios prioritize stability, a small allocation to VEA can provide incremental growth opportunities from established foreign markets without excessive volatility.
• Currency Exposure: VEA introduces currency diversification, which may help hedge against U.S. dollar depreciation, supporting portfolio resilience.

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VOO (Vanguard S&P 500 ETF)

VOO tracks the S&P 500 Index, which represents approximately 500 of the largest U.S. companies. These large-cap stocks provide a strong historical growth record, low costs, and high liquidity. VOO serves as a stable core holding that complements more concentrated growth ETFs, supporting the portfolio’s long-term capital appreciation objectives while managing risk through diversification.

• Core Equity Exposure: VOO offers broad exposure to large-cap U.S. companies, which tend to be more stable and financially strong compared to smaller stocks. This makes it a relatively lower-risk equity option within the stock portion of a conservative portfolio.
• Inflation Hedge and Growth: Even conservative portfolios need some growth to outpace inflation over time. VOO’s exposure to the largest U.S. companies provides potential for steady capital appreciation and dividend income.
• Liquidity and Cost Efficiency: VOO’s liquidity and low expense ratio make it a practical choice for the equity sleeve of a conservative portfolio, minimizing costs and allowing easy rebalancing.

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VB (Vanguard Small-Cap ETF)

Including VB in an aggressive ETF model portfolio enhances growth potential by adding diversified small-cap exposure, complements large- and mid-cap holdings, and captures the small-cap premium. This supports the portfolio’s objective of maximizing long-term capital appreciation while maintaining broad market diversification and managing risk through size and sector diversification.

• Small-Cap Growth Focus: Small-cap stocks typically have the highest growth potential but also the highest volatility.
• Aggressive Growth Driver: Including small caps increases the portfolio’s return potential over the long term.
• Diversification: Adds exposure to emerging companies and niche markets within the U.S. equity space.

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IAU (iShares Gold Trust)

Including the iShares Gold Trust (IAU) in an aggressive ETF model portfolio can seem counterintuitive at first, since gold is traditionally viewed as a defensive or inflation-hedging asset rather than a growth driver. However, including it provides valuable diversification benefits, inflation protection, and downside risk mitigation. This helps balance the portfolio’s high-growth focus with resilience against market shocks, ultimately supporting more consistent long-term performance.

• Inflation Hedge: Gold is traditionally seen as a store of value and a hedge against inflation and currency devaluation.
• Diversification: Gold has low correlation with stocks and bonds, providing portfolio diversification and reducing overall risk.
• Safe Haven Asset: In times of market stress or geopolitical uncertainty, gold can help preserve wealth.
• Conservative Risk Role: While gold can be volatile, a small allocation in a conservative portfolio can enhance risk-adjusted returns by mitigating downside risks.

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VWO (Vanguard FTSE Emerging Markets ETF)

Including Vanguard FTSE Emerging Markets ETF (VWO) in an aggressive ETF model portfolio enhances growth potential by providing diversified exposure to fast-growing emerging markets. It broadens geographic and economic diversification, captures demographic and sector tailwinds, and complements developed market holdings. While it introduces higher volatility, this aligns with the aggressive portfolio’s objective of maximizing long-term capital appreciation through diversified global growth opportunities.

• Emerging Markets Growth: VWO provides exposure to emerging economies with higher growth potential but increased risk.
• Aggressive Growth Component: Emerging markets often outperform developed markets over the long term, albeit with more volatility.
• Diversification: Adds geographic and economic diversification beyond developed markets.

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