Portfolio Analysis - 2025-04-19

Gemini 2.0 Flash Thinking

Based on the economic data and search results, I'll construct a portfolio designed to maximize the Sharpe ratio, considering the current economic environment.

• GDP Growth: Mixed signals. Some forecasts suggest positive growth, but also slowing in Q4 2025.
• Inflation: Predicted to remain above the Fed's target of 2%.
• Interest Rates: The Federal Reserve held rates steady but projects a federal-funds rate target range of 3.50%-3.75% at the end of 2025, suggesting a possible easing later in the year.
• Unemployment: The unemployment rate is expected to increase slightly through 2025 to 4.3%.
• Dollar: The US Dollar is declining which affects the prices of imports.

• BIL (Short-Term Treasury ETF): 10%. The interest rate stability makes this investment relatively safe in the current environment.
• GLD (Gold ETF): 10%. Gold is hedging against inflation and the declining dollar.
• TLT (Long-Term Treasury ETF): 10%. This protects against economic slowdown and the possibility of rate cuts later in 2025.
• BTC-USD (Bitcoin): 5%. Although Bitcoin is a volatile asset, I include a small allocation to capitalize in potential gains.
• SPY (S&P 500 ETF): 25%. Despite rising interest rates, I still allocate to equities because of long term growth potential, but assign less weight to it.
• EEM (Emerging Market ETF): 10%. I include an allocation, since other currencies are performing well, but I keep the weight small.
• XLE (Energy Sector ETF): 15%. Energy sector often performs well during higher interest rates or due to inflation.
• QQQ (Nasdaq 100 ETF): 15%. Technology sector is still holding good growth potential given the economic slowdown and the long-term innovation.This allocation aims to balance risk and return, capitalizing on potential upside while mitigating risks associated with economic uncertainty and above-target inflation.