Bonus Points: Holiday Chillin’


The weeks surrounding the New Year are always some of the busiest for me, as between holiday plans and preparations for annual data updates there’s always a lot going on. Combine the normal festivities with a major winter storm here in the United States, and simply staying warm, happy, and productive will be top of mind for a little while.

So in lieu of an elaborate new post to wrap up the year, I figured this would be a good time to re-share a particularly good one from last December that is honestly pretty timeless.

No matter whether you’re reading that for the first time or revisiting it with fresh eyes, I hope it gives you a new appreciation not only for the power of intelligent asset allocation but also for the value of new perspectives.

Stay warm, have a very Merry Christmas, and may 2023 bring everything you wish for.

Good questions

What other Portfolio Charts readers are asking

“I believe that you use strictly historical data (no Monte Carlo or hypotheticals)? And that you update the results annually, around the calendar year end? I know average return won’t change much with a single bad year, and it’s too early to say anything about time to recover, but I think my portfolio has hit a record low Max drawdown. I just don’t know how low the new low will be.”

You’re correct that Portfolio Charts only uses measurable historical data rather than theoretical Monte Carlo simulations. Beyond just finding a lot of value in studying history, I’m also of the opinion that even the best Monte Carlo simulations do not accurately model the sophisticated and interconnected nature of real economies. The financial world may be unpredictable, but it’s not random.

And yes, I update all of the charts once a year at the end of December. So keep your eyes open for new numbers in early January!

Have a question? 🙋‍♂️

I’m NOT a financial adviser, but I’m always happy to help.

What I’m reading

Insightful market discussion worth sharing

Bankman-Fried Could Be Extradited to the U.S. as Soon as WednesdayGizmodo

“Santa-Fried should soon be bringing crypto winter cheer to the U.S. His sleigh will be a federal jet flying from the Bahamas to New York. The only workshop door he’ll be ducking his large mop of hair through is a New York court where there’s a question of whether he’ll be granted bail.”

Granting bail without some serious tracking measures seems like a hugely risky offer to an extremely well-connected guy who stole billions and faces life in prison. But it’s still good to see the painfully slow wheels of justice making progress.

Nuclear fusion breakthrough – what is it and how does it work?BBC

“When two atoms of a light element such as hydrogen are heated and combine to form a single heavier element such as helium, the nuclear reaction produces massive amounts of energy which can be captured.”

Replicating the energy process that powers the sun here on earth is a pretty big deal. In their eagerness to report the net energy gain from the input lasers, many stories on this conveniently ignore the additional power required to contain the fusion reaction. Plasma doesn’t mess around! So I’m personally a lot more skeptical that we’ll see commercial reactors any time soon, but this is still a big step forward. Faster, please.

How Often is the Market Down in Consecutive Years?A Wealth of Common Sense

“If you want to look at the bright side of things from a diversification perspective, there has never been a period where both stocks and bonds were both down in consecutive years at the same time.”

Ben Carlson looked all the back to 1928, and frankly I’m surprised with the result. There’s always a first time for everything, but that’s a nice bit of historical perspective to keep us grounded. Yes, 2022 was a really tough year to invest. But as painful as it feels right now, things may turn around faster than you think. Hang in there!

Happy Holidays!

If you have a few dollars to spare, take the time to give them to someone near you in need. But once they’re set, a warm coffee always lifts the spirits.