The Striking Appeal of the Weird Portfolio

Portfolios

When you hear about something weird, that’s usually an indicator that it doesn’t follow the crowd. But whether that’s a good or a bad thing is a matter of perspective. So when a fellow blogger named Value Stock Geek first approached me a few years ago about referencing a few charts in an upcoming book about what he called the Weird Portfolio, I had an open mind. After all, sometimes the most compelling ideas are the ones that stand out from the sea of similar mainstream opinions passing as common knowledge.

Fast forward to today, and not only have the ideas behind the Weird Portfolio held up quite well but I’ve also found myself frequently thinking about them as answers to common questions. For example, what if you added international stocks to a portfolio like the Golden Butterfly? And how might other assets like real estate fit into the equation? Well, it turns out that someone has indeed thought about these things and documented it all quite well.

So in honor of a weird idea that I’m confident will speak to many interested investors, I’m happy to introduce a new portfolio on the site — the Weird Portfolio.

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Bonus Points: Failing Early And Often

Bonus Points

Today SpaceX launched its new and massive Starship rocket on its first test flight, and the event ended with a flourish. By “flourish” I mean it exploded in spectacular fashion.

One of the more confusing things that seems to be tripping up people unfamiliar with such tests is the reaction of SpaceX employees on the live feed. At the moment when the rocket experienced its “rapid unscheduled disassembly”, rather than hanging their heads in failure the entire team erupted in applause. It’s easy to wonder what world they’re living in.

But engineers watching the event understood. The greatest design achievements are never achieved flawlessly in a single step. If they were, they wouldn’t be such great achievements! So rather than planning forever for a reality full of unknown variables that we’ll never truly understand until we finally hit the launch button, we celebrate failures for what we learn. And we press on creating something even better.

If you’ve ever found yourself evaluating portfolio ideas for the thousandth time without making a decision, stop for a moment to think about the flight crew cheering their work going up in flames. I’m not saying you should make hasty financial decisions. Be smart about it and start small. But at the same time, don’t be afraid to try or regretful when things don’t go as planned. Embrace each small failure as a required educational step towards your long-term success, and before you know it you’ll be enjoying the view from orbit.

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Support Investing Education as a Portfolio Charts Member

Updates

Portfolio Charts is coming up on its 8-year anniversary in a few months, which is pretty incredible when I think about it. The effort has involved dozens of scratch-built tools, hundreds of posts, and thousands of hours of work. And from the emails I receive I can tell that it is all worth it. I started it all to share a few charts to help people see investing in a new way, and the reward of hearing from people who have been genuinely helped by all the hard work never wears off.

One of the first unexpected things I learned a while back is that y’all are a generous crowd looking to help and give back. To meet that request, I added the option for donations and eventually a few products as well. Well, today I’m happy to announce that there’s a third way to directly support the site.

If you want to be a part of keeping the charts running, you can now sign up to become an official patron of good data. You heard that right — Portfolio Charts now has memberships!

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How Not to Invest Like Silicon Valley Bank

Beginner

Over the weekend another big bank made national news for all the wrong reasons. Silicon Valley Bank, the darling of the Bay Area venture capital community and the bank of choice for numerous tech startups, abruptly collapsed. Worried about possible contagion in other small banks, the FDIC quickly stepped in and guaranteed all deposits above the normal insurance limits. But while the immediate financial fallout may appear contained for nervous SVB depositors, the ripple effects are still unfolding in the wider banking system. To put it bluntly, the whole situation is a mess.

I think it’s safe to say that most of you don’t have more than $250k sitting in cash in the bank, so the good news is that you’re probably fine and shouldn’t be too worried. But I do think there’s a larger lesson that attentive investors can learn from the missteps of SVB. So while the talking heads on TV and social media compete for the hottest take on complex banking policy you probably don’t even care about, let’s talk about a few simple takeaways for your own investments.

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Learning the Hard Way: 2022 Portfolio Rankings

Psychology, Portfolios

Now that we’ve had a few weeks to recover from the holidays and start planning for the new year to come, it seems like an appropriate time to revisit the events that made 2022 such a uniquely memorable year in the investing world. It ended up one of the worst years on record and I imagine most people are ready to move on. But before we all pick ourselves up and start anew after the carnage, I think it’s important to put what we all experienced into proper historical context.

Sometimes the hardest lessons are the most educational.

How did each portfolio option fare in a truly tough time to invest? How does this past year compare to other bad years that came before? And what can we learn to affect our path forward?

I’ve got the data for all of the 2022 portfolio rankings. So let’s find out.

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New Returns Data for an Interesting New Year

Updates

With the volatile financial markets of 2022 mercifully in the history books, I think we’re all looking forward to a fresh start. To truly appreciate the way forward, however, sometimes it helps to fully understand the past. That’s why January is always a fun month here at Portfolio Charts — it’s time for new returns numbers! For investors like me who want to know not just the best times or even the average times but the truly painful times to invest in a given portfolio, this new data drop should be particularly educational.

Updating the underlying data always takes a bit of effort, so I bundled in a few more overall improvements in the process. Here are all the changes you’ll see around the site.

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Bonus Points: Holiday Chillin’

Bonus Points

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.

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The FTX Lesson That All Investors Should Learn

Beginner, Theory

Any time there is lots of money involved in a particular market, there will inevitably be a subset of people that emerge to capitalize on the situation by exaggeration, deception, and outright theft. Madoff, Enron, Lehman Brothers, Tyco — history is littered with financial frauds that cost investors billions.

How does nobody see it coming? Unfortunately the world today isn’t as simple as obvious good guys and bad guys, and it’s sometimes impossible for normal people to tell respectable companies apart from carefully constructed marketing images. The good news is that there are a few simple steps you can take to protect yourself from the fallout when things go terribly wrong from events you never saw coming.

But before we get to the good stuff, let’s unwind the most recent example of financial corruption that every investor should educate themselves about — the rise and fall of FTX.

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