Thanksgiving investing strategy: Risk tolerance and other key themes for investors

Portfolio Allocation & Risk Management - The report suggests constructing a portfolio like a Thanksgiving plate, with the S&P 500 as the main course (turkey), representing the core market exposure [1][2] - Defensive sectors and bonds are likened to mashed potatoes and stuffing, providing stability to returns [2] - AI and growth stocks are the "gravy," enhancing returns but potentially leading to concentration risk due to existing S&P 500 exposure [2][3] - Speculative bets like high beta ETFs and crypto are the "cranberry sauce," to be taken in small portions to avoid significant losses [3] - Single stock trades and meme stocks are the "pumpkin pie," representing fun money with carefully sized positions [4] Market Analysis & Strategies - The report compares cap-weighted and equal-weighted S&P 500 strategies, noting the cap-weighted index's outperformance in the recent bull market [5][6] - Equal weighting offers broader exposure to industrials, financials, and smaller companies within the S&P 500 [6] - Small caps, REITs, and international stocks are presented as "unloved side dishes" that may offer opportunities, with tax deductions available for losses [7] - Gold, the dollar, foreign exchange, and crypto are likened to "uncomfortable politics," requiring careful consideration of risk tolerance and time horizon [8] Thanksgiving Week Market Outlook - Lower liquidity during Thanksgiving week can amplify market moves, potentially leading to surprises [9] - Black Friday sessions are shorter (9:30 a m Eastern until 1:00 p m) and can present buying opportunities [9][10] - Key retail numbers from big box and cyber sales will be closely watched by Wall Street [10]