My Portfolio vs S&P 500: Extended Performance Analysis

I’ve been tracking my personal stock portfolio performance against the S&P 500 benchmark from August through September 2025. With my portfolio heavily allocated to technology stocks, market conditions have been volatile with some interesting recovery patterns. Here’s an extended analysis of how my investment strategy performed relative to the broader market over this two-month period.

Performance Tracking Data

Interactive Performance Chart

Key Performance Metrics

Overall Performance (August 15 - September 30, 2025)

• My Portfolio: -1.84% total return
• S&P 500: +1.61% total return
• Excess Return: -3.45% underperformance

Monthly Breakdown

• August 2025: -3.09% (My Portfolio) vs -0.09% (S&P 500) = -3.00% underperformance
• September 2025: +1.25% (My Portfolio) vs +1.70% (S&P 500) = -0.45% underperformance

Risk-Adjusted Performance

• My Portfolio Volatility: 0.95% daily average
• S&P 500 Volatility: 0.51% daily average
• Sharpe Ratio (My Portfolio): -1.94
• Sharpe Ratio (S&P 500): +3.16

Portfolio Composition Analysis

Current Allocation

Based on my actual portfolio holdings, here’s the detailed breakdown:

Key Portfolio Characteristics

• Technology Concentration: ~83% in tech-related holdings
• Single Stock Risk: NVDA at 27.72% represents significant concentration risk
• ETF Diversification: 37% in ETFs provides some sector diversification
• Growth vs Value: Heavy tilt toward growth stocks with only FDVV providing dividend exposure

Performance Analysis Over Extended Period

This allocation showed a notable recovery pattern over the two-month period:

August Performance (Struggled):

• NVDA’s AI bubble concerns (27.72% position amplified losses)
• Tech sector rotation from growth to value stocks
• Rising interest rates affecting high-multiple tech valuations
• Regulatory concerns around big tech companies

September Performance (Improved):

• Tech sector stabilization with some recovery in growth stocks
• Better individual stock selection outperforming in several sessions
• Reduced volatility compared to August’s extreme swings
• Strong performance days on 9/10 (+1.17% vs +0.28%) and 9/18 (+1.05% vs +0.47%)

The S&P 500’s broad diversification provided consistent stability throughout both months.

Why I’m Underperforming the S&P 500

1. Tech Sector Concentration Risk

My portfolio is heavily concentrated in technology stocks (83% tech exposure), which have been under pressure due to:

• NVDA’s AI bubble concerns (27.72% position amplified losses)
• Rising interest rates affecting growth stock valuations
• Regulatory concerns around big tech
• Rotation from growth to value stocks
• Market concerns about AI bubble

2. High Volatility Exposure

The technology sector has experienced higher volatility than the broader market, leading to:

• Larger daily swings in portfolio value
• Increased drawdowns during market corrections
• Higher correlation between holdings during tech selloffs

3. Market Timing Challenges

Recent market conditions have been unfavorable for growth stocks:

• Value stocks outperforming growth stocks
• Defensive sectors (utilities, consumer staples) showing strength
• Technology sector facing headwinds from multiple factors

4. Concentration vs Diversification

While the S&P 500 benefits from broad diversification across sectors, my concentrated approach has:

• Amplified losses during tech sector weakness
• Reduced exposure to outperforming sectors (energy, utilities)
• Increased correlation risk among holdings

🎓 Lessons Learned

❌ What’s Not Working

• Over-concentration in tech: 83% tech allocation has amplified losses during sector weakness
• NVDA concentration risk: 27.72% position in NVDA magnified AI bubble concerns
• Timing the market: Attempting to catch tech rebounds has led to further losses
• Ignoring diversification: Lack of exposure to outperforming sectors (energy, utilities, consumer staples)

✅ What I’m Learning

• Sector concentration risk: Even quality companies can underperform when their sector faces headwinds
• Importance of diversification: The S&P 500’s broad diversification provides stability during sector rotations
• Patience during drawdowns: Tech stocks may take time to recover from valuation compression

🛡️ Risk Management Insights

• Position sizing: Individual positions of 15-20% can create significant portfolio volatility
• Correlation risk: High correlation between tech holdings amplifies losses during sector weakness
• Stop-loss discipline: Need to maintain strict stop-losses to limit downside

🚀 Forward-Looking Strategy

⏰ Short Term (Next 30 Days)

• Reduce tech concentration: Gradually reduce technology allocation to improve diversification
• Add defensive positions: Consider adding utilities (XLU) or consumer staples (XLP) ETFs
• Monitor earnings: Be prepared to adjust positions based on Q3 earnings reports
• Set stop-losses: Implement 7-10% stop-losses on all tech positions

📅 Medium Term (3-6 Months)

• Rebalancing plan: Target more balanced allocation across sectors
• Sector diversification: Add exposure to energy (XLE) and utilities (XLU) sectors
• Value exposure: Consider adding value ETFs (VTV) to balance growth exposure
• International diversification: Add developed market ETFs (EFA) for geographic diversification

🛡️ Risk Management

• Position sizing limits: Reduce individual stock positions to maximum 10% of portfolio (currently NVDA at 27.72%)
• Sector limits: Cap any single sector at 40% of portfolio (currently tech at 83%)
• Regular rebalancing: Weekly monitoring, monthly rebalancing
• Stop-loss strategy: 7% stop-loss on individual stocks, 15% on sector ETFs

📈 Benchmark Comparison Insights

📉 When I Underperform

• Tech sector weakness: Heavy tech allocation amplifies losses during sector selloffs
• Growth to value rotation: Lack of value exposure hurts performance during style rotations
• Rising interest rates: Growth stocks typically underperform when rates increase
• Market volatility: Higher volatility in tech stocks leads to larger drawdowns

📈 When I Outperform

• Tech sector strength: Concentrated tech positions capture upside during sector rallies
• Earnings beats: Individual stock selection can outperform during strong earnings seasons
• Growth momentum: Tech stocks typically lead during growth-oriented market environments

📊 Interactive Sector Performance Chart

This chart shows how the S&P 500’s sector allocation compares to recent sector performance, highlighting why my tech-heavy portfolio struggled during this period.

🎯 Conclusion

My portfolio has underperformed the S&P 500 over this extended two-month period, but showed notable improvement in September:

Overall Underperformance (-3.45%) primarily due to:

1. Over-concentration in technology compared to the S&P 500’s broad diversification
2. August’s severe tech sector headwinds that created deep underperformance
3. Higher volatility from concentrated positions
4. Lack of diversification into outperforming sectors

September Recovery Signs:

• Reduced underperformance (-0.45% vs -3.00% in August)
• Several strong outperformance days (9/6, 9/9, 9/10, 9/12, 9/18, 9/30)
• Lower volatility compared to August’s extreme swings

Key Lessons:

• 🔄 Sector diversification remains critical for risk management
• ⚖️ Balanced allocation between growth and value reduces drawdowns
• 🛡️ Risk management through position sizing limits damage during sector weakness
• ⏳ Patience during sector-specific drawdowns, but active monitoring is essential

The extended data shows that while tech concentration creates volatility, there are periods of strong outperformance. A more balanced approach with proper diversification would likely provide better risk-adjusted returns over the long term.

⚠️ Important Disclaimer: Past performance does not guarantee future results. This analysis is for educational purposes only and should not be considered investment advice. Always do your own research and consider consulting with a financial advisor.

💬 Interested in discussing portfolio strategies or market analysis? Feel free to email me your thoughts and experiences! 📈