Beginner

Rank the Top Countries in the Portfolio World Cup

Beginner

In terms of sheer spectacle, it’s hard to beat the World Cup.

On the pitch you have absolute legends like Messi making us wonder if time has stopped, Norse gods like Haaland roaming the earth, and superheroes like Mbappé dazzling with his otherwordly skills. There are stunning upsets like Paraguay topping powerhouse Germany, and heroic moments even in a loss like tiny Cape Verde pushing Argentina to the limit.

Beyond the beautiful game, there is also something magical about the mixed cultures of the World Cup that inspires everyone involved. There are world travelers marveling over free chips and salsa, awestruck at gas stations in Texas, and belting out American classics. And permeating it all is a grand sense of joyous national pride.

In investing, national pride is a bit of a touchy subject. Some people believe strongly in their local market and support investing close to home to support local businesses, while others see home country bias as a pernicious problem to be diversified away. In honor of the World Cup, I want to do something fun and lean into friendly competition while learning something new about how portfolio construction works in different countries.

Have you ever wondered which home country is easiest to grow your money in, and which is the most difficult?

Let’s set up a knockout tournament to find out!

Continue reading →

Language, Time, and the Beauty of Nonlinear Thinking

Psychology, Beginner

In the 2016 movie Arrival, a linguist named Louise Banks is recruited by the military to learn an alien language that even the brightest minds on earth are unable to interpret. The story mixes ominous sci-fi themes with a personal arc interwoven in cut scenes that seem incongruous at times, but that ultimately reveal something surprising about the nature of reality. Without giving away too much, Louise eventually learns that language wires our brains in a way that shapes our perception of time. And when one learns to speak and think in a new way, standard ideas we all take for granted like the linear nature of past, present, and future no longer seem so set in stone.

While it makes for a cool movie, viewers may be surprised to learn that the core concept is based on actual psychological phenomenon. The way we speak, write, and think affects how we interpret the world around us. From the implicit framing bias we subtly insert into discussions by the words we choose to the linear performance charts that flow from left to right like our natural western language, words not only have meaning. They influence the way we think.

When discussing investing and the nuances of backtesting methodologies, I have come to learn that some of the concepts are hard to explain to everyone. It’s not that it’s rocket science. I think sometimes it’s just a new language that not everyone understands, and the thought process it nurtures takes time to sink in. Like moving from a sentence written from left to right to truly understanding the timeless circular ink blots on the window, it’s more than just about knowledge. It’s about how our minds work.

So if you’re interested in getting a glimpse through the glass to a different way to perceive investing numbers, grab some popcorn and find a comfortable chair. This article is for you.

Continue reading →

Lessons From the Best Portfolios in 2025

Beginner, Portfolio Talk

The new year is officially here, which means it’s an exciting time of year for investing researchers.

The new portfolio data has arrived!

All of the namesake Portfolios and Charts here at Portfolio Charts now have preliminary updated numbers through the end of 2025. Collecting data from so many government sources takes a bit of time and everything won’t be final for another month or so, but there’s enough “close-enough” data that there’s no reason to delay. Be sure to check in on the asset allocation you have been eyeing, as it was a pretty remarkable year in a lot of ways.

To ring in the new year, I always like to look back at the portfolio performance rankings over the previous year. It’s not so much to chase recent performance, but simply to see what we can learn about asset allocation in general. And there were a few notable lessons! So let’s kick off the new year with a quick discussion of what we can learn from the best portfolios in 2025.

Continue reading →

What to Do When It’s Time to Rebalance

Beginner

Christmas is fast approaching, which means it’s the perfect time of year to take a break from not worrying about investing at all. Between shopping for gifts, sipping warm beverages, and binge watching cozy holiday movies (yes, Die Hard counts), this is when I also set aside some time to think about the annual investing ritual of rebalancing my portfolio.

Some years that’s easy, when asset percentages haven’t moved much you can just leave things alone and move on. And others are more complicated. With crazy gold gains this year necessitating a big sale and a potentially sizable tax bill, this year definitely qualifies as the latter.

First world problems, I know. 🙂

Well, I just finished my own rebalance and have also received quite a few emails recently asking about the same topic. So while it’s fresh on my own mind and possibly yours, too, let’s talk a bit about the art and science of how to rebalance a portfolio.

Continue reading →

Minimize Your Miss

Psychology, Beginner

I have a good friend whose son is an accomplished golfer. Beyond the natural fatherly pride that he feels, there are also moments of awe where a wisdom borne from years of practice sneaks through in ways that you may not expect from such a young person. For example, when asked how he got so good at golf, his son replied with this (paraphrased) all-time gem:

Hole-in-ones are mostly luck, so I don’t fixate on hitting great shots. I practice minimizing my miss.

That’s not just solid advice on the golf course, but also a remarkable philosophy to live by.

It also struck home with me, as my investing philosophy is a little different than what you usually see in popular finance. Promoting trite “5 easy ways to maximize your returns” is a lot easier than explaining nuanced concepts involving uncertainty. But the idea of “minimizing your miss” is a great metaphor that brings the range of outcomes to the forefront. Wise investing isn’t about always swinging for the flag, but staying on the fairway.

The cool thing about working in visuals is that there are a few good ones that demonstrate this investing philosophy particularly well. So let’s hit the driving range and talk about the mechanics and benefits of consistent investing.

Continue reading →

The Right Assets Make the Portfolio Recipe

Updates, Beginner

Researching investments can sometimes feel like aimlessly wandering the aisles of a giant grocery store while hungry. You know you need something, but without a recipe in mind it’s easy to fall into the trap of grabbing the first easy but unhealthy thing that sounds good. In the end, there’s a decent chance you will regret your choice.

Or maybe you’re a foodie who has something in mind but reads every label and agonizes over minute ingredient lists. For educated shoppers, analysis paralysis can still be crippling as it takes forever to decide on the perfect option for everything in the cart. Does it really have to be this difficult?

The equivalent in the investing world is the absolute gauntlet of a process required to find the right fund. Open up your brokerage account or a good ETF screener, and the sheer number of fund variations are insane. Picture the market full of similar shoppers like you, and you’ll find the same assortment of people touching every apple, wondering what the words on the labels even mean, and loading up on prepackaged junk food. Same process, different store.

Solving the paradox of fund choice in investing is a tricky problem, and I have gone back and forth a few times over the years in how I approach it. But I have been playing with some new ideas lately, and I’m excited to announce a major site update that I think will make the process of building a portfolio a whole lot easier.

So if you’re ready for a break from staring at the produce, let’s talk about a better way to find the right portfolio assets.

Continue reading →

How to Succeed in the Worst Stock Markets

Beginner, Psychology, Theory

The US administration recently announced a sweeping series of tariffs on seemingly every country in the world, and the immediate market reaction was starkly negative with stocks falling double digits in just a few days and volatility shooting through the roof. Naturally, many people who track markets for a living are freaking out.

If you’re expecting me to join the growing chorus of chronically online personalities offering a long and important sounding take on tariffs and what I believe the people in charge should or shouldn’t do, that’s not really my thing. There are already enough people doing that, and to be honest I find the tone on both sides to be frustrating. It’s a complicated issue that very few individuals fully understand, which makes the arguments among newly minted trade experts a lot less informative than their confidence might imply.

And of course, the inherent political undercurrent that permeates the topic also has a way of distracting even very smart and respected people to the point of completely losing focus on what really matters. Ranting about government policies is an inherently unproductive activity that accomplishes nothing but raising your blood pressure and losing the respect of your peers.

As individual investors, we need and deserve actionable advice on how to handle tough situations that we have no control over. Reframe your mindset from one of fear and anger to one of resilience, and your entire paradigm changes. That proactive approach is more in my wheelhouse.

So to address the issue at hand, I’m going to avoid any guesses about the future of tariff policy impacts and concede right from the start that it’s possible it could be one of the worst economic decisions of all time. At that point, what matters is how you handle it.

Which brings us to an interesting question.

What are the worst stock market drawdowns in history, and which portfolios performed best in those same situations?

I’ve got the data. So let’s flip the script from reflexively pining over perfect market conditions to talking about what you can do to make money even in the worst possible financial headwinds.

Continue reading →

When Past Performance Is Absolutely Indicative of Future Results

Beginner

I recently had the pleasure of meeting some new people over happy hour at a local meetup group. Between a few drinks on the patio on a warm early-fall afternoon, we exchanged the typical “so what do you do?” icebreakers, shared some fun stories, and had a great time.

As the introductions turned to me, I guess it’s no surprise that the topic of investing came up. I talked a little about the website I run that studies historical data to help people make wise investing decisions without having to stress about keeping up with the markets. No big deal, but I’m pretty proud of it.

I was sitting next to a smart and accomplished guy who knew a bit about investing, and his natural reaction was a perfect mix of genuine, engaged, and polite. It went something like this: “That’s really cool. But as they say, past performance is not indicative of future returns. It’s too bad that historical data not very useful for decisions today.”

Honestly, his comment didn’t surprise me at all. Not only have I heard that from plenty of investors before, but I’ve also seen the same standard disclaimer on hundreds if not thousands of investing resources over the years.

Past performance is not indicative of future results.

This straightforward statement has become so ubiquitous that many investors simply take it for granted without giving it much thought. And as a result, many intelligent people normally predisposed to evidence-based thinking in other aspects of life nonetheless dismiss the field of portfolio backtesting altogether.

But here’s the thing. That throwaway sentence is often just flat wrong.

So for my new friend asking about my investing hobby and all of my old ones here wondering how to properly apply historical data to today’s choices, let’s talk about the limits — and power — of effective portfolio backtesting.

Continue reading →

Welcome to the Portfolio Olympics

Beginner, Goals, Portfolio Talk

Regardless of whether you watch every event or simply browse social media for highlights, I think we can all agree that the Olympics are a great spectacle. From athletic feats that boggle the mind to tears of both joy and agony, the raw passion, dedication, and ultimate triumph is hard to top in terms of pure inspiration.

Continue reading →

The Painful Investing Lesson in Elden Ring

Beginner, Psychology

Like millions of other Elden Ring fans, I’ve been spending many hours recently killing everything in sight in the new Shadow of the Erdtree expansion. For anyone not familiar, Elden Ring is a popular videogame in the RPG genre that is a wonderful combination of beauty and lore requiring a lot of skill, strategy, and patience to master.

That skill and patience requiring thoughtful stat allocations may ring a few bells, as it shares a lot of parallels with investing. I wrote about that perspective last year when I discussed Asset Allocation for Gamers, but Elden Ring hits hard on an especially important concept that I think is underserved in many investing circles — the risk of ruin.

So if you’ve spent many frustrating evenings like me getting repeatedly wiped out by a certain flame serpent, let’s talk about avoiding the same fate in the markets.

Continue reading →