The chart above should cause you a lot of pain if you are a Bogglehead or an All Weather Investment person.  It turns out that you should have been investing in growth after the dot.bomb, and you would have been much farther ahead.

Generally, NASDAQ or QQQ is a very bad proxy for Dragon Kings, but at least we can graph it out.  It turns out that by investing in growth stocks, you can get ahead of the game, and when the market crashes, even though the growth stocks drop, you don't fall back to a more conservative strategy such as buying the S&P 500.

**Your biggest concern is that you need to pick up the growth stocks, and a good growth stock does so well that even a big set back means you are still doing better.**

However, we can't predict when the market will crash.  And the most painful item is that the market crashes, and all of our stocks go down, and we need money.  So, you need a core asset in your portfolio that move counter to the crash.

The obvious answer is Gold.  During a crisis event, Gold holds up far better.

It turns out that if you are willing to mix in 10% gold with you growth stocks, it will provide around a 10% buffer than you can dig into during a crisis.  This 10% is a life line, and it impacts the overall growth very little.

Let's put the chart into a table:

# Performance Comparison (2005–2025)

|Metric|**100% QQQ**|**90% QQQ / 10% GLD**|**S&P 500 (SPY)**|
|:-|:-|:-|:-|
|**Ending Balance**|**$182,178**|$180,816|$82,888|
|**CAGR**|**14.8%**|14.8%|10.6%|
|**Volatility**|24.6%|22.5%|16.9%|
|**Max Drawdown (2008)**|**-41.7%**|\-37.1%|\-36.8%|

Key Takeaways

* **Crisis Mitigation (2008):** Clear example of Spitznagel's "Safe Haven" concept.
   * **QQQ Alone:** Crashed **-41.7%**.
   * **90/10 Portfolio:** Crashed **-37.1%**.
   * **Difference:** Gold buffer saved \~**4.6 percentage points** of drawdown, making risk profile closer to S&P 500 (-36.8%) than Nasdaq.
* **Volatility Reduction:** 90/10 mix lowered volatility from **24.6%** to **22.5%**, while CAGR stayed \~14.8%.
* **Drag in Bull Markets:** In 2023, QQQ surged **55%**, while 90/10 returned **50.6%**, lagging \~4 points due to Gold.
* **The "Free Lunch":** Over 20 years, 90/10 achieved **same return** as QQQ but with **less risk** (lower volatility, shallower drawdown).

Updated Annual Returns (2005–2025)

|Year|QQQ (100%)|90/10 Mix|SPY (100%)|Notes|
|:-|:-|:-|:-|:-|
|**2025**|22.1%|25.9%|17.3%|Gold (+60%) helps 90/10 beat QQQ.|
|**2022**|\-32.6%|\-29.4%|\-18.2%|Gold flat; 90/10 falls less than pure QQQ.|
|**2008**|\-41.7%|\-37.1%|\-36.8%|Gold buffer saves \~4.6% vs QQQ.|
|**2005**|1.6%|3.2%|4.8%|Gold outperformance helps significantly.|

Now, if you are younger, let's look at the numbers over the last 10 years:

| Year       | QQQ Return | 90/10 Return | SPY Return |
| ---------- | ---------- | ------------ | ---------- |
| 2015       | 9.4%       | 7.4%         | 1.2%       |
| 2016       | 7.1%       | 7.2%         | 12.0%      |
| 2017       | 32.7%      | 30.7%        | 21.7%      |
| 2018       | -0.1%      | -0.3%        | -4.6%      |
| 2019       | 39.0%      | 36.9%        | 31.2%      |
| 2020       | 48.6%      | 46.2%        | 18.3%      |
| 2021       | 27.4%      | 24.3%        | 28.7%      |
| 2022       | -32.6%     | -29.4%       | -18.2%     |
| 2023       | 54.9%      | 50.6%        | 26.2%      |
| 2024       | 25.6%      | 25.7%        | 24.9%      |
| 2025 (YTD) | 22.1%      | 25.9%        | 17.3%      |

We aren't looking to totally mitigate a crash.  Simply make a drop better.  When the market hits a crash, having one core assets that you know you can pull on restores your confidence to lock in a higher risk asset.

Now, the 10% is per user.  I obviously used Perplexity to run some numbers for me.  You should do the same to see what your risk management should be.

However, if you are not investing in AI because "it is risky," you need to realize that if you don't invest and it does have a pay-off, you will forever ask yourself, "Why didn't I invest in such an obvious return."  However, don't put all your eggs in one basket.  

AI is just one part of the Dragon King methodology.

Crash Hurt Less With Insurance And Dragon Kings (Part II)