🍗 Will Investors Feast This Thanksgiving?

What’s on the Menu 🍴

As we get ready to gather around the financial feast table this season, we're dishing out some hot topics to keep your portfolios stuffed and your investment strategies savory.

• Will Investors Feast This Thanksgiving? 🍗

• The Magnificent 7 Stocks: Loved & Hated At The Same Time 7️⃣

• Crypto Corner - Navigating Today's Pulse 🧭 

• Why You Should NEVER Listen To Dave Ramsey For Investing Advice

Today’s newsletter is a 4 minute read.

Will Investors Feast This Thanksgiving? 🍗

Next week brings the Thanksgiving holiday in the US, a time for joyous get togethers, tasty feasts, and a shortened trading week in markets.

US stock markets will be closed on Thursday but open for a half day on Friday, which also kicks off one of the busiest shopping weekends of the year.

We were curious to see if full bellies put investors in a good mood…

So we dove into the weekly return data on the S&P 500 stock index to see how stocks have performed during & after Thanksgiving.

If nothing else, maybe this insight helps you score some points around the dinner table if investing gets brought up! 😎

First, our baseline: since 2000 the median weekly return for the S&P 500 index (excluding dividends) is +0.23%, with 55% of weeks posting positive returns.

The week of Thanksgiving however clocks in with a median return of 0.62% and has been positive 70% of the time since 2000!

And the follow through to the next week? It also looks pretty solid.

The week after Thanksgiving has delivered a median return of 0.31%, with a positive return roughly 60% of the time since 2000:

The week of Thanksgiving and the week after tend to be good to investors, especially when stocks are not in the midst of a bear market.

It’s no guarantee that the next two weeks will see stocks boom, but at least the odds are tilted in our favor!

The Magnificent 7 Stocks:
Loved & Hated At The Same Time 7️⃣

The “Magnificent 7” stocks are the top stocks by size in the S&P 500:

1. AAPL (Apple)

2. MSFT (Microsoft)

3. AMZN (Amazon)

4. NVDA (Nvidia)

5. GOOG (Goog)

6. META (Meta)

7. TSLA (Tesla)

Funny observation…the bigger these companies get, the less people seem to want to “recognize them”.

When talking about S&P 500 returns, you seem to often see comments like this circulating on X (Formerly Twitter) and elsewhere:

These people are right.

When you strip out the top 7 stocks in the index, returns look less exciting.

But, let’s put this into perspective for a moment:

What is the best football team without its quarterback?

What's a ship without its captain? … You get the idea.

While the top 10 stocks have become a much larger percentage of the S&P 500, these companies are high-quality, well-run businesses.

The best businesses in the world! So, they’re growing .. and growing .. and growing.

Isn’t that what investing is all about? Investing in growing, innovating companies 😛?

So why are people becoming obsessed with stripping the index of their crown jewels?!

While I think there are use cases for measuring how the stocks in the S&P 500 ex- the magnificent 7 are doing, it shouldn’t be out of disdain for the mag 7’s leading role in the index.

Mind you, this is one of the greatest benefits ever of owning the S&P 500 index: Low performing stocks get kicked out and replaced by better companies!

Check out the S&P 500 holdings in 1990. Aren’t you glad that we have the Magnificent 7 rotated in?!

So, why look at the S&P 500 performance without the top 7 darlings?

Really, it’s to get an idea of the health of “the rest of the index” and in my opinion, to go treasure hunting for stock picking opportunities.

Bifurcations in valuation between the mag 7 and the rest of the index can lead to great buying opportunities.

But, Magnificent 7 stocks are typically outperforming for a reason!

The argument is that the Magnificent 7 is a “house of cards” being too high a percentage of the index, and could fall from grace in a big way.

People that are concerned about being too concentrated in the big companies, could make different investing choices if they’re uncomfortable with the weightings of the S&P 500.

However, we’re still looking at a very diversified index even with the top holdings being a large percentage!

Remember, returns come into our portfolio WITH the magnificent 7 if you’re invested in the index, not without them.

So, we should all sit in reality here that these are incredibly important companies to own and it’s okay that we view performance WITH them included.

Teamwork makes the dream work with the magnificent 7 stocks AND the rest of the index!

Crypto Corner - Navigating Today's Pulse 🧭 

• Ferrari's Crypto Embrace - Ferrari's CEO endorses the trend of luxury car buyers using cryptocurrency for purchases, signaling a major acceptance in high-end markets.

• Meta's Video AI Breakthrough - Meta introduces groundbreaking AI capable of analyzing video content, marking significant advances in machine learning and content editing technologies.

• Ethereum Trust Filed by Blackrock - Blackrock's filing for an Ethereum Trust points to increased institutional interest and potential mainstream acceptance of cryptocurrency assets.

• Backing Dollar With Bitcoin - Vivek Ramaswamy proposes a bold plan to underpin the U.S. dollar with Bitcoin, potentially revolutionizing the currency's value stability.

• Tether Expands Bitcoin Mining - Tether's multi-million investment into BTC mining indicates a strategic move towards cryptocurrency production, enhancing its position in the digital asset ecosystem.

Why You Should NEVER Listen To Dave Ramsey
For Investing Advice ✖️

Dave Ramsey is great for budgeting and debt paydown advice...

But he may have crossed a line with investing advice.

He has recently showed his stubbornness when it comes to withdrawal rates in retirement and expected returns.

Nikki breaks down plenty of data showing that Dave may be giving some unsound portfolio advice that could get early retirees and retirees in general in trouble.

Food For Thought 🧠

"How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
- Robert G. Allen

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.