📈 Thanksgiving Feast
Let's fill our plates
Thanksgiving is the best holiday of the year.
It’s a top-5 drinking holiday1 and the clear number one eating holiday. Christmas comes close but can’t make up for all the sides you get at Thanksgiving.2
With a table full of options - green beans, yams, sweet potato, corn, white meat, dark meat, mashed potatoes, gravy, stuffing, mac and cheese, sweet potato casserole with marshmallows3, and much more. – you have to make decisions. You only have so much room on your plate, so how do you choose?
The financial jargon way to describe the act of choosing what and how much to put on your plate is ‘allocating;’ that is, how you choose to ‘allocate’ your plate, given the different options. Just as you allocate your plate, you can allocate your investments.
Asset allocation can be broken down into three questions: how much money do you have now, how much money will you need later, and how long do you have before you need the money. The answers to those questions inform how to allocate your portfolio.
For example, suppose you have $50,000 now and need $1 million in twenty years. Stocks would likely be a better investment because you have time to recoup any losses you experience along the way. And it’s very reasonable to 20x your money over twenty years.4
There are professionals who dedicate their entire careers to sorting out those questions for investors of all sizes. We ain’t got that kind of time, so what’s the fast but still robust way to make allocation decisions?
We broke the allocation decision into a handy 2x2. The vertical axis looks at how much money you have saved up right now while the horizontal axis asks how long before you need the money.
We thought over/under 10x salary saved now and over/under 10 years a good dividing line for most people’s assets and time horizon.
Starting bottom-left and going clockwise:5
Hide the Pain Harold: Less than 10x your salary saved up that you need in less than ten years. Whatever you need the money for, it’s enough to justify investing but not enough to take a lot of risk. There’s actually a lot of the US who are in this camp with their retirement assets. It’s arguably the trickiest of the four to figure out how to allocate.
Theoden: More than 10x annual salary that you need in the next ten years or sooner. You have your money, so now the goal is to keep as much of it as you can. Generally, people in this category want a portfolio that will keep pace with the rate of inflation that minimizes exposure to a lot of volatility. We need to avoid the Flying Nazgul situation.
Russ Hanneman: Lots of money lots of time. We need to keep what we’ve got, but we need to make money, too. We need a portfolio that balances risk and reward that’s highly diversified to outpace inflation and give us a source of consistent income. Gotta make sure that radio on the internet payday compounds.
Jared: You have less than 10x your salary saved and more than ten years before you need the money. This scenario is most common. Chances are, most of your assets are in a 401(k) or something similar, which slightly limits your options. Still, growth is the name of the game here and the asset allocation should reflect that. We need to add to the account aggressively and invest aggressively.
Of the four, Jared is where we need to be the most aggressive. Getting over the 10x salary hurdle is do-able if we allocate the portfolio wisely. We want to be aggressive, but not so aggressive we risk losing it all.
What’s the upside?
How you allocate your money is the most important decision you can make because of the impact it can have on our outcomes. You gotta make sure the asset allocation matches up with where you’re at and where you want to go. You can start picking what to buy once you have that in mind.
Fortunately, we can help. Stay tuned.
For Your Weekend
This is where we’ll post a round-up of essays, podcasts, and streaming shows to check out over your weekend. We cast a wide net so you don’t have to.
Read:
And the Best Thanksgiving Movie Is… by Sonny Bunch (The Bulwark)
Thanksgiving dinner is a bountiful feast, but Thanksgiving movies are a bit harder to come by, certainly compared to the celebrations America’s premier (and premiere) holiday is nestled between, Halloween and Christmas. (For the record: Halloween and Scrooged are the best Halloween and Christmas movies, respectively, though The Nightmare Before Christmas can work for both holidays.)
No one’s going to fault you if you throw on Planes, Trains and Automobiles. Fine movie. You’ll be hailed as a decent host. But it is a little … basic. Why not go for something a little different this year?
My Plan to Dominate My Local Turkey Trot by Jacob Sweet
When the state senator Terrence Murphy established a turkey trot, in 2017, in his home district, which spans New York’s Dutchess, Westchester, and Putnam counties, he was trying to raise money for local food banks, not attract the nation’s—or even the area’s—best runners. The ubiquitous Thanksgiving Day races are known not for the athletic prowess of the competitors but for the ridiculous costumes: turkeys, pilgrims, and pumpkin pies. Some runners dress as chefs, wield gigantic costume silverware, and spend the entire race chasing turkeys. Turkey trots are meant to be fun. Often there are bagels.
Listen:
KID A MNESIA by Radiohead
On this triple release, Radiohead does what they set to avoid twenty years ago by acknowledging that Kid A and Amnesiac are two sides of the same coin.
Kid A is often hailed as the band’s best album - a divisive take amongst Radiohead fans. It certainly received far more press, including this glowing New Yorker review upon its release. Amnesiac is the ‘yes, and?’ follow-on album.
Reacquaint yourself with Kid A and Amnesiac (and whatever else they could find) this weekend. The albums herald the turning point in the band’s trajectory as a declarative rejection of what the press assumed would be the ascension to the British rock crown.
Joshua Tree (The Super Deluxe) by U2
While we’re at it, pop on U2’s Joshua Tree. Arguably U2 at its tightest, Joshua Tree is a tactile, lived-in album that perfectly channels all the band’s best instincts.
This version includes a live recording in Madison Square Garden that’s electric.
Chuckle:
Trailing New Year’s Eve, St. Patrick’s Day, Memorial Day, and the Fourth of July. You might be surprised by this, but right behind Thanksgiving is President’s Day. That Monday off makes it a sneaky great drinking holiday. Besides, every generation lives through presidents that make them want to drink.
A big deal is made about cooking the turkey, but the sides steal the show every year once we set to the task of actually eating Thanksgiving dinner.
This dish is an easy one to lose off my plate, personally. But I find marshmallows off-putting, however they’re prepared.
I can hear the crypto crowd snorting with laughter into their Monster Zero-Sugar Ultra Golds. It’s the worst flavor, guys. It’s like drinking a carbonated pineapple-scented candle.
Only in the Weekly Upside would we build a 2x2 that smashes Silicon Valley with Lord of the Rings with Hiding the Pain Harold the meme template. We know this is the sort of vaguely coherent content that keeps you coming back.