Excess Returns Podcast Summary

Episode: Nothing Has a Right to Exist in Your Portfolio | What the Last 15 Years Has Taught Us
Date: December 24, 2025
Guests: Cameron Dawson, Dave Nadig, Matt Ziegler
Host: Excess Returns

Episode Overview

In this year-end special—also featured on the Click Beta podcast—investing experts Matt Ziegler, Dave Nadig, and Cameron Dawson dig into the major investing lessons of 2025 and the past 15 years. The episode centers on the diminishing permanence of portfolio components, the shifting landscape for asset allocation, and the behavioral and institutional dynamics shaping markets today. They also share personal reflections, debate the fate of diversification and factor investing, and revel in some lighthearted holiday stories.

Key Discussion Points & Insights

1. Rethinking Portfolio Construction

• Core Theme: "Nothing has a right to exist in your portfolio. Nobody has a manifest destiny to be part of your strategic allocation." – Cameron Dawson (01:34, 28:59)
• The panel questions long-held tenets like the efficient frontier, Modern Portfolio Theory (MPT), and the Efficient Market Hypothesis, especially in light of the last 10–15 years, which have rewarded passive exposure to large cap US equities, particularly the "Magnificent Seven".
• Implication: Investors must justify each portfolio holding based on present conviction, not legacy beliefs.

2. Retrospective on 2025—"Sell America" and Asset Flows

• Dave Nadig recounts the "Sell America" panic where institutions dramatically underweighted US equities in favor of gold and international stocks.
  • "Whether you got this call right or wrong, if you flipped your entire asset allocation in and out 70% variance in six to eight months, you're a terrible fund manager." (01:24, 05:03)
• Chasing consensus or institutional letters, as revealed by Bank of America's fund manager survey, proved unwise:
  • "Anybody who's trying to base their own personal asset allocation on these reports from institutions and how they're flipping in and out of asset classes, that's a crazy way to run money." – Dave Nadig (01:46, 08:15)
• Performance Note:
  • Gold and international equities did outperform for brief windows, but performance reverted quickly.
  • "Sell America" may have looked right for a few months, but following the narrative often meant underperformance.

3. The Role (or Lack Thereof) of Gold, Crypto, and Real Assets

• Gold's Hot Year: Gold soared, but most institutional allocators didn’t hold it:
  • "Only one person raised their hand that they have a strategic allocation to gold… the only person... was somebody from South America where obviously there’s been a lot more currency debasement." – Cameron Dawson (10:02)
• Gold as a 'Psychological Commodity':
  • Provides emotional comfort, not necessarily an expected return advantage. Cameron attributes the idea to Dave Nadig, who calls it a "psychological commodity." (13:11, 19:37)
• Crypto:
  • ETF flows into Bitcoin outpaced new coin mining in 2025, "but it's really hard to see a Bitcoin rally in a tight liquidity environment." – Cameron Dawson (14:28)
  • Discussion of behavioral biases, with clients segregating into "no gold, no crypto," "only gold," or "only crypto" camps.
  • "Thank you for letting me know that you’re Jewish. I will not try to convert you." – Dave Nadig, humorously comparing these biases to religion (19:25)
• Real Assets/Real Estate:
  • Mindful of clients’ existing real estate exposure; emphasis on "know what you own and why you own it." (16:12–17:45)

4. The AI Boom & Portfolio Concentration

• AI and the Magnificent 7: Clients often have large positions in high-flyer stocks like Nvidia or Microsoft, which complicates portfolio advice.
  • "We probably can't just overhaul everything either. So we have to have a system and a framework to do this intelligently." – Matt Ziegler (21:45)
• Active Diversification:
  • Cameron observes active allocations among large cap, small cap, and international equities have not added value over the last decade, sometimes detracting from returns. (22:53, 24:33)
  • The question lingers: Do you drop these exposures now or maintain them for eventual mean reversion?

5. Factor and Smart Beta ETFs—A Tough Year

• Performance Review:
  • Most factor or smart beta ETFs underperformed, notably "quality" factors suffering their worst year since 1999 due to design choices (e.g., overweighting free cash flow yield = poor sector exposures). (29:17–32:14)
  • "The only thing that hasn't stunk is momentum. Right? Like, I mean we've been in a momentum market for... two solid years." – Dave Nadig (32:19)
• Investor Takeaway:
  • Recency bias is dangerous—just because something has performed well doesn’t ensure continued outperformance.

6. Looking Ahead to 2026

• Market Outlook:
  • Cameron: "Defiantly neutral." (35:00)
  • Waiting for a shift in earnings or sentiment, noting the ever-present risk of reversion from extreme concentration.
  • Rebalancing and conviction is critical: Allocate tactically, with each holding earning its place.

Notable Quotes & Memorable Moments

• On Portfolio Justification:

  • "Nothing has a right to exist in the portfolio. Nobody, nobody has a manifest destiny to be part of your strategic allocation." – Cameron Dawson (01:34, 28:59)

• On Following Institutional Narratives:

  • "Anybody who's trying to base their own personal asset allocation on these reports from institutions and how they're flipping in and out of asset classes, that's a crazy way to run money." – Dave Nadig (01:46, 08:15)

• Gold as Comfort, Not Growth:

  • "[Gold is] a psychological commodity...it gives you that sleep at night feeling." – Cameron Dawson attribute to Dave Nadig (13:11)

• On Behavioral Biases and "Religious" Beliefs in Allocation:

  • "Thank you for letting me know that you’re Jewish. I will not try to convert you." – Dave Nadig, about gold vs. crypto zealotry (19:25)

• On the Momentum Market:

  • "All those things suck. The only thing that hasn't stunk is momentum...we've been in a momentum market for, I don't know, since 23." – Dave Nadig (32:19)

• Market Outlook:

  • "Defiantly neutral." – Cameron Dawson (35:00)

Timestamps for Key Segments

• [01:02–04:26] Rebuking the Efficient Frontier & MPT
• [04:26–08:35] Dissecting the "Sell America" Trade and Institutional Narratives
• [10:02–13:38] Institutional Attitudes Towards Gold
• [13:38–15:46] Bitcoin, Crypto in Portfolios, and Real Assets
• [16:12–19:25] Real Estate Exposure and Behavioral/Religious Attitudes in Allocation
• [22:53–26:43] The Dilemma of Diversification Amid Market Concentration
• [28:59–32:46] Factor ETF Failures and Momentum’s Dominance
• [35:00–38:08] Outlook for 2026—Rebalancing and Managing Extreme Markets

Lighthearted Holiday Segment (Bonus)

• [41:21–54:59] All three share quirky and touching holiday traditions—from "not pajamas" boxes to cat-gifted Christmas presents and proprietary family eggnog recipes.
  • "Every year it has pajamas in it. Now it's just a game... except this year it's actually not pajamas, which I'm really excited about." – Dave Nadig (41:21)
  • "The family has always given gifts from our dead animals... this gift is from Squeeper, a cat that died 50 years ago." – Cameron Dawson (43:59)
• Favorite Holiday Movies:
  • Home Alone, The Muppet Christmas Carol, White Christmas—and a defense of Hallmark originals.

Tone and Takeaways

The hosts champion a skeptical, evidence-driven, and flexible approach to investing—always challenging assumptions and market narratives. They blend institutional insight and practical advice with the recognition that investing is also deeply psychological, filled with biases, beliefs, and personal quirks.

Investor Guidance:

• Regularly reassess every asset in your portfolio—nothing is sacred.
• Don’t chase institutional narratives or crowd consensus.
• Diversification's value is not automatic; each piece must be justified.
• Beware recency bias, and don’t be afraid of tactical pivots.
• Stay humble: “All we know is that we don’t know nothing.”

For a deeper dive:

• Read Dave Nadig's “Sell America” piece on ETF.com
• Cameron Dawson’s Muppet Christmas Carol essay at newedgewealth.com
• Follow the hosts for more insights at cultishcreative.com and panoptica.com

Happy Holidays and here's to sharper investing in 2026!