What You Will Learn
Building an investment portfolio is one of the most consequential financial decisions you will make. It determines your exposure to risk, your potential returns, and how well you sleep at night when markets get volatile. Traditional portfolio construction requires understanding asset allocation theory, correlation matrices, and risk budgeting — concepts that take years to master.
With Journely, you can build a professionally structured portfolio through conversation. Tell the AI your goals, risk tolerance, and preferences, and it will suggest allocations, screen for specific holdings, stress-test the result, and help you finalize a portfolio you understand and believe in.
- Goal setting — translate your financial objectives into portfolio parameters
- Asset allocation — get AI-suggested splits across equities, sectors, and geographies
- Stock selection — screen for specific holdings that fit each allocation bucket
- Risk assessment — understand the risk profile before committing capital
- Finalization — review the complete portfolio with position sizing
Step-by-Step: Building Your Portfolio
Define Your Goals and Constraints
Every good portfolio starts with clarity about what you are trying to achieve. Tell Journely about your investment horizon, risk tolerance, income needs, and any constraints. The more specific you are, the more tailored the recommendation. You do not need to use financial jargon — describe your situation in plain language.
Great, here is what I am working with: $50,000 starting capital, 10+ year horizon (long-term growth), moderate risk tolerance (you want upside but can accept some drawdowns), geographic preference for US and Asia, no cryptocurrency exposure.
With a 10-year horizon and moderate risk tolerance, we should target a portfolio with 70-80% equities and 20-30% in more defensive positions. The long horizon lets us ride through cycles, while the moderate risk preference means we should diversify across sectors and cap sizes rather than concentrating in high-volatility names.
Shall I suggest an asset allocation framework?
Tip: Be Honest About Risk Tolerance
Risk tolerance is not just about how much you can afford to lose — it is about how you react emotionally when your portfolio drops 20%. If a significant drawdown would cause you to panic-sell, tell Journely you prefer lower volatility. A portfolio you can stick with through downturns will outperform one you abandon.
Get an Allocation Suggestion
Journely's portfolio team will propose an asset allocation tailored to your goals. This includes the split between growth and defensive positions, sector weights, geographic distribution, and the reasoning behind each choice. Think of this as the blueprint before selecting individual stocks.
Here is a balanced growth allocation for your profile:
US Large Cap Growth (30%) — Core holding. Exposure to mega-cap tech and healthcare innovators driving the economy. Stable growth with moderate volatility.
US Large Cap Value (15%) — Dividend-paying companies with strong cash flows. Provides downside protection and income. Financials, industrials, consumer staples.
US Mid Cap (10%) — Higher growth potential than large caps with reasonable liquidity. Often where the next generation of market leaders is found.
Japan Equities (15%) — Corporate governance reforms are unlocking value. Weak yen benefits exporters. Historically low correlation with US markets adds diversification.
Vietnam/ASEAN Equities (10%) — High GDP growth (6-7% annually), young demographics, manufacturing shift from China. Higher risk, higher potential reward.
Cash/Short-term bonds (20%) — Dry powder for buying opportunities during corrections. Current yields of 4-5% mean you get paid to wait.
Screen for Specific Holdings
With the allocation framework in place, ask Journely to find specific stocks for each bucket. The AI screens across fundamentals, technicals, and quality metrics to suggest holdings that fit each category. You can adjust criteria or ask for alternatives at any point.
After screening the S&P 500 for revenue growth above 10%, operating margin above 20%, and forward P/E below 35x, here are six names:
AAPL (Apple) — $3.2T. Services flywheel + AI upgrade cycle. Forward P/E 29x, revenue growth 5-8%. The anchor position.
MSFT (Microsoft) — $3.0T. Azure cloud + Copilot AI adoption. Forward P/E 31x, revenue growth 14%. The most diversified big tech name.
GOOGL (Alphabet) — $2.1T. Search dominance + cloud growth + Waymo optionality. Forward P/E 21x — cheapest of the mega-caps relative to growth.
UNH (UnitedHealth) — $520B. Healthcare compounder. Revenue growth 10%, forward P/E 19x. Defensive growth with demographic tailwinds.
V (Visa) — $590B. Payment network duopoly. 50%+ operating margins, 10-12% revenue growth. A tollbooth on global commerce.
LLY (Eli Lilly) — $780B. GLP-1 drug franchise (Mounjaro/Zepbound). Revenue growth 25%+. Forward P/E 48x is elevated but justified by the pipeline.
Review Risk Metrics
Before committing, ask Journely to stress-test the portfolio. The risk team analyzes correlation between holdings, sector concentration, maximum historical drawdown, and how the portfolio would have performed during past market crises. This is where many investors skip — and later regret it.
Correlation: The US large cap names (AAPL, MSFT, GOOGL) have a pairwise correlation of 0.65-0.75 — they tend to move together. Adding UNH and V reduces this to an average portfolio correlation of 0.52. Japan and Vietnam holdings have 0.25-0.35 correlation with US names, which is the key diversification benefit.
Sector concentration: Technology is 35% of the equity allocation (higher than the S&P 500 weight of 32%). Healthcare is 15%, Financials 8%. Consider adding industrials or energy for further sector diversification.
Stress test: In a 2022-style drawdown (rates rising, growth rotating), this portfolio would have declined approximately 18-22%. In a 2020 COVID crash scenario, the max drawdown would be roughly 25-28%. The 20% cash buffer reduces the overall portfolio drawdown to 14-22% and provides buying opportunities at depressed levels.
The risk level is consistent with your moderate tolerance. Expected annual volatility is approximately 12-14%.
Why Stress Testing Matters
Markets do not crash on a schedule, but they do crash. Knowing in advance that your portfolio might drop 20% in a severe correction — and being comfortable with that — is the difference between staying disciplined and selling at the bottom. If the projected drawdown is too high, ask Journely to increase the defensive allocation.
Finalize the Portfolio
Once you are satisfied with the allocation and risk profile, ask Journely to finalize the portfolio with exact position sizes. The AI converts the percentage allocations into dollar amounts and share counts based on your capital. You can then execute the trades through your connected broker or use the portfolio as a reference for manual execution.
US Large Cap Growth (30% = $15,000): AAPL $3,000, MSFT $3,000, GOOGL $3,000, UNH $2,500, V $2,000, LLY $1,500.
US Large Cap Value (15% = $7,500): JNJ $2,500, JPM $2,500, PG $2,500.
US Mid Cap (10% = $5,000): AXON $1,700, DECK $1,700, WFRD $1,600.
Japan Equities (15% = $7,500): Toyota (7203.T) $2,500, Sony (6758.T) $2,500, Keyence (6861.T) $2,500.
Vietnam/ASEAN (10% = $5,000): VNM (Vinamilk) $1,700, FPT Corp $1,700, HPG (Hoa Phat) $1,600.
Cash reserve (20% = $10,000): Hold in a high-yield savings or short-term Treasury ETF (SHV or BIL) yielding approximately 4.5%.
Total positions: 18 stocks + cash. Average position size: $2,200 (4.4% of portfolio). No single position exceeds 6%. This is well-diversified for a $50K portfolio.
Key Takeaways
- Start with goals, not stocks — your investment horizon and risk tolerance should drive the allocation before you pick any individual names
- Allocation matters more than selection — research consistently shows that asset allocation explains 80-90% of portfolio returns over time. Getting the framework right is more important than finding the perfect stock
- Diversify across dimensions — sector, geography, and market cap all reduce risk. Japan and Vietnam holdings in this portfolio provide genuine diversification against US market drawdowns
- Always stress-test before committing — know your worst-case scenario in advance so you do not panic when volatility arrives
- Keep cash for opportunities — a cash buffer is not idle money. It is your ability to buy quality assets at discounted prices during corrections