Portfolio at https://portfolioslab.com/portfolio/bu0gz1fgco68r47vtm713loh shows a total Return/Risk score of 43. But several individual metrics all look good, including:

• Sharpe Ratio 1-year = 1.13, All Time =. 1.94
• Healthy Dividend Yields
• Reduced drawdowns vs S&P 500
• Reduced volatility vs S&P 500
• High DIversification

Is the low overall score occurring because of the 20% overweighting in the Magnificent 7 (AMZN and Fidelity Blue Chip Growth Fund), or is it simply a reflection of Amazon's recent decline? And yes, trimming those two positions in exchange for Fidelity Multi-Asset Income fund drastically raised the overall score.

It seems the algorithm is a 'diversification purist.' It is penalizing the 'clustering' of my Magnificent 7 winners, even though my 45% bond ballast has kept my actual drawdowns lower than the S&P 500. It's a classic battle between Historical Success (High Sharpe) and Future Vulnerability (Concentration).

Help me to better understand the algorithm.

Hey Paul, great question! The score of 43 means your portfolio's risk-adjusted performance ranks better than roughly 43% of all portfolios on our platform over the past 12 months. It's a relative ranking, not a composite of individual metrics.

So even with a solid 1-year Sharpe a portfolio might still land at the 43rd percentile. This is because in the current market environment, a lot of portfolios are showing exceptional risk-adjusted returns. Precious metals, certain international equity exposures, and other asset classes have been hitting all-time highs, pushing the overall distribution of Sharpe ratios higher than usual. A 1.13 Sharpe is good in absolute terms, but relative to the current field, many portfolios are doing better, they either achieving higher returns for similar risk, or similar returns with less risk.

That said, your all-time Sharpe of 1.94 sounds excellent, the 12-month window just happens to be a period where other asset classes have surged, making the relative bar higher than usual.