Excess Returns · Tuesday, September 8, 2026
Jared Dillian proposes his 'Awesome Portfolio' as an alternative to the S&P 500 strategy, designed to reduce volatility and investor unhappiness. The portfolio consists of 20% each in stocks, bonds, gold, cash, and real estate.
“So the rest of the world looks at us and thinks we're nuts. That Americans do this. They put all their money in stocks. They don't do it in Europe. Mostly they invest in bonds or in the bank. Uh, Japan, Japan is starting to reinvest in stocks recently, but they avoided it for a number of years. Like, we are crazy gamblers. We take huge amounts of risk. And the problem is, is that even if stocks go up 10% in perpetuity, you're going to get some big bumps along the way, which is going to affect your psychology, which is going to cause you to do suboptimal things. Yes.”
“The quote I have here is, Volatility is the enemy. The purpose of volatility is to make people make stupid decisions. Yes.”
“Yes. So it's 20% each in stocks, bonds, gold, cash, and real estate. That's all it is.”