Risk Parity Radio: Recent Episodes
Frank Vasquez
Risk Parity Radio is a podcast about investing. RPR explores risk-parity style portfolios comprised of uncorrelated or negatively correlated asset classes -- stocks, selected bonds, gold, REITs and other easily accessible fund options for the DIY investor. The goal is to construct portfolios that are robust and can be drawn down on in perpetuity, and to maximize projected Safe Withdrawal Rates regardless of projected overall returns.
In this episode we respond to emails from Thirsty Horse, Joanne, Matt and Alan. We share our gratitude for our listeners and reflect on how a listener community can become one of the most meaningful outcomes of a long-term investing project. We also provide an update on the Top of the T-Shirt fundraising campaign for the Father McKenna Center. Next we answer two portfolio design questions about retirement drawdown constraints and how to fit them into the framework for portfolios with higher safe withdrawal rates.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Charity Navigator Rating for The Father McKenna Center: Charity Navigator - Rating for Father McKenna Center Inc.
Bengen "Richer Retirement" Sample Portfolio at Portfolio Charts: Richer Retirement Portfolio – Portfolio Charts
Bill Bengen's "Richer Retirement" Content: Bill Bengen’s New Book | Charts & Tools for You
Golden Ratio Compared with Version w/o Alternative Investments: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive
Breathless Unedited AI-Bot Summary:
A week where stocks jump 3% to 5% and gold pops more than 7% can feel like the market is daring you to change your plan. We don’t take the bait. We walk through what actually happened across major asset classes, why we still refuse to time markets, and how a diversified risk parity approach is designed to keep you steady when headlines and price moves get loud.
We also start with something more important than portfolio math: the notes we received after my mom passed away, and what it means to build an audience that shows up for each other. From there, we share a progress update on our Father McKenna Center “top of the t-shirt” campaign, including matching funds, a Charity Navigator 100% rating, and a practical tip for tax-smart giving: donating appreciated shares can reduce capital gains while supporting a mission you care about.
Then we get into two listener questions that hit the real world. First: if you’re in the retirement drawdown phase and you can only use stock and bond ETFs or index funds, what would we actually hold and why? We talk safe withdrawal rate research, the role alternatives play, and what you might use as imperfect substitutes (value tilt, REITs, utilities, even gold miners) when gold and managed futures aren’t on the table. Second: what if you’re investing from New Zealand with limited fund access and a tax drag on US ETFs? We lay out a decision process for finding value-tilted funds locally, evaluating managed futures costs, and avoiding expensive “solutions” that quietly erase the benefit you’re chasing.
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In this episode we answer emails from Eli, Optimus Bill, and James. We discuss variations in fund approaches for adding leverage, when fees are more likely to matter, what kinds of people and goals can benefit from risk parity style approaches, the trade-offs in lower and higher equity approaches (with a recent insight from Bill Bengen), and a ChatGPT analysis from a listener.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Catching Up To FI with Yours Truly: Are Bonds Dead?: Fixed Income Fundamentals (Part 1) | Frank Vasquez | Episode 229
Afford Anything Podcast #618: They Ran Out of Money. I Didn’t. Here’s Why.
Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive
FI Physician Article: How Withdrawal Rate Influences Diversifiers in a Risk Parity Portfolio
Breathless AI-Bot Summary:
You can build a portfolio that looks elegant on paper and still miss the only question that matters: what is this portfolio supposed to do for your life? We dig into listener mail that forces the issue, starting with a smart (and very specific) proposal to add leverage using return-stacked ETFs instead of daily-reset leveraged funds. We talk through what these products are trying to achieve, why “macroallocation” often drives the long-run behavior, and where the real uncertainty lives: rebalancing mechanics, limited history, and the practical cost of complexity.
From there, we zoom out to risk parity in retirement. We answer whether there’s a minimum nest egg size to use a risk parity portfolio (spoiler: it’s not about size, it’s about goals), and why many people with very low withdrawal rates simply don’t need a portfolio engineered to maximize safe withdrawal rate. If you’re in the 0% to 3% withdrawal camp, you may have far more freedom than you think, and your asset allocation can optimize for something else entirely, like long-term growth, simplicity, or personal comfort.
We also get tactical: Treasury STRIPS funds as a form of bond “pseudo-leverage,” how that can free up space for growth assets while keeping recession insurance, and how to think about minimum position sizes based on volatility instead of arbitrary percentage floors. Finally, we respond to a question about Golden Butterfly versus Golden Ratio style portfolios, sequence of returns risk, and whether a reverse glide path or bucket-style framing can help without turning your retirement plan into an overengineered project.
If you like practical portfolio design, risk parity investing, safe withdrawal rate thinking, and clear tradeoffs around leverage, fees, and retirement asset allocation, hit play. Subscribe, share this with a friend who loves tinkering, and leave us a review with your biggest takeaway.
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In this episode we answer emails from Luc, (from Quebec!), Nick, and Isaiah. We discuss surviving ugly drawdowns and bad decades, building a risk parity portfolio that still grows, momentum funds, avoiding fund hopping, and treating health like a real priority.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Catching Up To FI With Ben Carlson: Risk & Reward: Stress Testing the Long Term Buy and Hold Strategy | Ben Carlson | 225
Portfolio Comparison Starting In 2000: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Portfolio Charts Heat Map Chart: Heat Map – Portfolio Charts
Portfolio Charts Article: Minimize Your Miss – Portfolio Charts
Afford Anything Podcast #618: They Ran Out of Money. I Didn’t. Here’s Why.
Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive
Breathless Unedited AI-Bot Summary:
Imagine retiring into a market that refuses to cooperate. A listener asks the question most withdrawal rate debates dodge: could you keep taking inflation-adjusted withdrawals while your balance shrinks through a 2000-style lost decade, and what would make you cut spending in real time?
We walk through how we think about drawdowns, sequence of returns risk, and why “toughing it out” is easier when the portfolio is built for multiple economic outcomes. That leads to practical stress testing: using historical analysis, TestFol.io, and Portfolio Charts heat maps to compare risk parity portfolios, a 60/40, and classic three-fund approaches under the worst start dates. We also share why Monte Carlo alone can be misleading if it relies on simplified assumptions instead of real historical regimes.
Next, we tackle a portfolio construction email that hits a modern dilemma: can you be too diversified in a risk parity setup? We unpack a Golden Ratio-style allocation with US and international equity sleeves, small cap value, momentum funds, long-term Treasuries, gold, managed futures, and cash. We discuss when that mix makes sense for decumulation versus accumulation, how momentum can function as a growth proxy, and the one behavior that reliably breaks good plans: fund hopping.
We end with a thoughtful note on the “life portfolio” many investors ignore: health. Exercise, consistency, convenience, and even medical support come up as we talk about aligning money decisions with longevity and day-to-day vitality.
If this helped you think more clearly about retirement withdrawals, risk parity investing, and building a plan you can stick with, subscribe, share the show, and leave a review.
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We close season six by walking through our annual July rebalancings of the first four sample risk parity style portfolios and talking about their raison d'être. We also share a practical reverse glide path strategy that we plan to apply to the sample Golden Butterfly portfolio over the course of the next ten years, starting with this one.
And we also thank our listeners for their kind words and generosity.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Michael Kitces Reverse Glidepath Article (listen to Episode 469 for more info on that): The Benefits Of A Rising Equity Glidepath In Retirement
Breathless Unedited AI-Bot Summary:
Rebalancing sounds boring until you realize it’s the moment your plan either stays real or turns into wishful thinking. We’re ending season six with our annual July rebalance across four sample portfolios, using actual target percentages, real fund lineups, and the same rules we follow every year to keep withdrawals and asset allocation from drifting.
We start with the All Seasons Portfolio as a reference case for a very conservative risk parity style mix, then move into the Golden Butterfly where we add a twist: a reverse glide path. Instead of locking in a static stock percentage, we gradually step stock exposure higher over a decade by trimming the lowest-volatility sleeve, aiming to improve retirement resilience without turning the process into constant tinkering. Along the way we hit the practical why behind rebalancing: it quietly forces buy low and sell high when your emotions would rather do the opposite.
From there, we lay out the Golden Ratio Portfolio and the simplest “cash bucket” management we know, designed to minimize trades and mental overhead while still keeping a diversified retirement portfolio. We finish with the Risk Parity Ultimate Portfolio, our educational kitchen-sink mix that includes Treasury STRIPS, preferred shares, managed futures, a long-short fund, gold, and a small bitcoin slice so you can see how volatile sleeves behave during a rebalance.
If you want a clear, repeatable portfolio rebalancing process for retirement, safe withdrawal rate minded allocations, and a realistic look at diversified assets, hit play. Subscribe, share the episode with a DIY investor friend, and leave a review with the portfolio rule you want us to stress-test next.
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In this episode we answer emails from The Nameless One, Jebenizer, and C.M. We discuss practice drawdown portfolios, an unusual deferred pension cash build-up situation and how to handle it, assets that benefit from inflation, and simple rules for contributions and rebalancing that reduce taxes and stress. And we share an update about Frank's Mom.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Rose Vasquez Memorial: Rose Vasquez Memorial Service July 15, 2026
Bigger Pockets Money Podcast #1: The Secret to a 5% Safe Withdrawal Rate | Frank Vasquez
Bigger Pockets Money Test Risk Parity Style Portfolio: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
Afford Anything Podcast #618: They Ran Out of Money. I Didn’t. Here’s Why.
Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive
Slide Deck: Afford Anything Episode 618 RPR Basics Slide Deck.pdf - Google Drive
Video Summary: Afford Anything Episode 618 Video Summary.mp4 - Google Drive
Breathless Unedited AI-Bot Summary:
A retirement portfolio is one thing on paper and something else entirely when you have to live with it. We start with a quick personal update, then jump into listener emails that turn risk parity investing into hands-on decision-making you can actually copy and test. Along the way, we talk about the “Top of the T-shirt” charity campaign and why we keep the show sponsor-free, then pivot into the kind of practical portfolio questions that show up right before retirement.
One listener builds a $10,000 drawdown portfolio as a practice run while still in the accumulation phase. The rules are clear: rebalance annually, withdraw 5% of the original amount every year, increase that withdrawal by CPI, and do not save it. We dig into why this simple experiment is so effective for building confidence with withdrawals, rebalancing discipline, and the real emotions that come with spending from an investment account. We also connect it to the Golden Ratio portfolio concept and how diversified asset allocation can support higher safe withdrawal rates.
Another listener has a rare situation: a deferred pension option that forces pension payments into a tax-deferred account earning a flat 4%, creating a growing cash-like allocation with limited liquidity. We explain how to treat that cash as part of the total portfolio right now, how it can change your stock and bond mix, and what to do when the funds become available. We also tackle inflation hedging for retirement planning, including why Treasury bonds suffer in inflation, how value stocks like property and casualty insurers can help, and why managed futures can be a powerful inflation hedge.
If you like clear rules, real portfolios, and honest trade-offs, subscribe, share the episode with a friend, and leave a review so more do-it-yourself investors can find us.
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In this episode we answer emails from I Have No Name, Shellie, Midwest Nice, and Mr. Ed (a motley crew indeed!). We discuss some massively funny generosity to our Top of the T-Shirt Campaign for the Father McKenna Center, an odd small cap value fund in a 401(k) and the issues surrounding holding too much cash, how stocks and long-term treasury bonds can both rise while still showing negative correlation and how that relates to the Four Quadrant Model, and redeploying proceeds from the sale of real estate. And lutefisk.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
PMJAX at Morningstar: PMJAX – Portfolio – PIMCO RAE US Small A | Morningstar
PMJAX Comparison: Asset Analyzer for ETFs, Stocks, and Funds | testfolio
Portfolios With More and Less Cash Comparison: Portfolio Backtester for ETFs and Asset Allocation | testfolio
S&P500 and LT Treasury Bond Comparison: Asset Analyzer for ETFs, Stocks, and Funds | testfolio
The Four Quadrant Model Exquisitely Explained With Illustrations Inspired By Vermeer: The Four Quadrant Wealth Atlas.pdf - Google Drive
Four Quadrant Model Video: Understanding Correlations and Diversification Using the Four Quadrant Model
Breathless Unedited AI-Bot Summary:
A listener spots a new “small cap value” option in a 401(k) and asks the question most DIY investors eventually face: how do you tell what a fund really is when the plan uses a custom name and no ticker? We walk through a practical, repeatable research process using an AI chatbot (Gemini or ChatGPT) to find the closest public equivalent, then confirming style exposure and performance on Morningstar and Testfol.io. Along the way we discuss what “micro” exposure can mean, why “perfect” isn’t required inside a restrictive plan, and how you can still build a solid risk parity-style asset allocation with the tools you have.
Then we tackle the comfort blanket that can quietly cost you money: cash. We explain cash drag, why holding 25% in cash can act like you’re not investing a quarter of your portfolio, and why bucket strategies don’t magically solve sequence of returns risk just by relabeling accounts. We also dig into tax-efficient investing and asset location, including why taxable cash interest can be brutal in retirement and when it may make sense to reposition assets between taxable and retirement accounts.
A father writes in with his son’s surprisingly sharp question about bond stock correlation: if stocks go up over time and long-term Treasury bonds are negatively correlated, do bonds usually go down? We answer with long-run data, show why both can rise while still diversifying each other, and point to specific regimes like 2000 to 2010 versus 2022. We also field a real-world planning scenario on investing property sale proceeds while keeping ACA premium tax credits in mind by managing MAGI, before wrapping with our weekly portfolio review across the eight sample portfolios (VOO, QQQ, VIOV, GLDM, VGLT, PDBC, PFFB/PFFV, DBMF and more).
Subscribe for more practical risk parity investing guidance, share this with a friend who’s stuck in a confusing 401(k), and leave a rating and review so more DIY investors can find us.
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In this episode we answer emails from Ethan, Joe, and Jim. We discuss a plan for young teachers to reach early financial independence with the right accounts and a little encouragement, the peculiar benefits of 457s and Roth contributions, a critical read of an academic article about an impractical TIPS ladder strategy, and the real-world problems with 30-year TIPS ladders, including complexity, tax issues, and longevity risk. We also discuss catastrophe bonds as an asset class and and why the new ILS ETF looks expensive and underwhelming at the moment
And we touch on our fund raising campaign for the Father McKenna Center.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
ChooseFI Teacher Podcast: The Unfair Financial Advantage of Teachers | Ep 13
ARVA TIPS Ladder Article: Full article: The Only Other Spending Rule Article You Will Ever Need
Breathless Unedited AI-Bot Summary:
A 457(b) can be the difference between “retire early” and “wait it out,” and we dig into why. We start by answering a detailed email from a young pair of teachers building wealth with a golden ratio portfolio while trying to bridge the years before age 59.5. We talk through tax buckets, account access, and what actually matters when you have Roth IRAs, taxable brokerage money, HSAs, employer plans, and the unique early-withdrawal rules of a 457(b) after you separate from service.
Then we switch gears to retirement drawdown strategies and put a popular “spending rule” article under cross-examination. We walk through the assumptions behind ARVA and a 30-year TIPS ladder approach, why ultra-variable withdrawals may be unrealistic, and why complexity does not automatically equal safety. If you care about safe withdrawal rate research, inflation protection, and building a portfolio that can handle real life, you will hear exactly where the paper breaks down and what we would focus on instead.
We wrap with a listener question on catastrophe bonds and the Brookmont Catastrophic Bond ETF (ILS). Cat bonds can look like the perfect uncorrelated alternative asset on paper, but fees and implementation details matter. If you’re building a diversified risk parity style asset allocation, we explain where cat bonds might fit, why this ETF doesn’t yet, and what we’d watch going forward. Subscribe, share this with a friend who’s planning early retirement, and leave a review so more DIY investors can find the show.
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In this episode we answer emails from Joe, Ashley, and Chris. First, we celebrate the early retirements and generosity of our listeners, spotlighting what retirement feels like when it is driven by joy and choice instead of fear. Then we answer a near-retirement question about bubble warnings, international investing, the proper way to use expert opinions, and how to build a risk parity style portfolio that can survive drawdowns and fund withdrawals. With the help of Claude.
And we discuss our Top of the T-shirt Campaign (Part Deux!) for the Father McKenna Center.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Yours Truly on Jesse Cramer's Podcast: Are You Hoarding, Hustling, or Harvesting in Retirement? - E144
Video Summary Version: The Harvesting Imperative: Structuring Retirement Around Well Being, Not Money
Slide Show Summary Version: Jesse Cramer Presents The Three H's.pdf - Google Drive
Video Summary of RPR Episode 508: RPR Episode 508 Illustrated: The Three H’s of Retirement
Jeremy Grantham on the Long-View (forward to minute 42 for his diversification recommendations): Jeremy Grantham ‘Almost Everything Looks More Attractive Than the US Equity Market’ - YouTube
Michael Batnick (not Josh Brown!) Critique of CAPE Ratio-Based "Predictions": Stocks Are More Expensive Than They Used to Be
Breathless Unedited AI-Bot Summary:
You can do everything “right” for decades and still blow up retirement by making one mistake at the wrong time: heading into the drawdown years with a stock-heavy portfolio and no ballast. We kick off with a listener note that hits the best part of financial independence, retiring at 45 with true optionality and a plan built around joy instead of restriction. That story opens a bigger question: what is money for once you’ve already proven you can save it?
We dig into the psychology of harvesting wealth and the practical realities of sequence of returns risk, especially in the five years before and after you stop working. We talk about spending that actually improves well being, including relationships, experiences, buying back your time, and giving, plus why so many high savers get stuck in hoarding or hustling modes. Along the way, we share updates on the Father McKenna Center and how listener generosity turns portfolio talk into real-world impact.
Then we tackle a timely investing worry: bubble warnings and Jeremy Grantham’s cautions around US equities and AI hype. We break down why opinion shopping is a dead end, why growth vs value diversification matters more than US vs international for drawdown safety, and how funds like long-term Treasuries, gold, and managed futures show up in resilient risk parity style portfolios such as the Golden Butterfly and Golden Ratio. We also cover TSP international limitations, plus our weekly portfolio reviews and July withdrawal amounts. If you found this useful, subscribe, share it with a friend who is near retirement, and leave a review so more DIY investors can find us.
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In this episode we answer emails from Sarah, Tyler and Luc. We Sarah's detailed plan to take a one to two year family gap year, travel, and unpack tax-smart ways to fund short-term spending, why we keep long-term money invested simply, more cowbell, and why complicated advisor math can be more noise than help how it can mask conflicts of interest. We also touch on the Cederberg paper (yes, with a C and not an S despite my mis-statement) and why it is of little or no practical use for investors even though it may be of academic interest.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Jillian Johnsrud's "Retire Often" Book: Book | Retire Often
Referenced PWL Link: Canadian Portfolio Manager: Introducing the “Plaid” ETF Portfolios | PWL Capital: Bender Bender & Bortolotti
Breathless Unedited AI-Bot Summary:
A one to two year career break with three kids sounds like the kind of plan personal finance forums love to dunk on. We take it seriously, run it through a real-world investing lens, and show how a “mini-retirement” can be both joyful and financially survivable when the time horizon and the portfolio match.
We walk through Sarah’s numbers, the stress points, and the decision that matters most: separating short-term spending from long-term compounding. For a gap year (or two), we prefer building a large, boring cash pile fast and funding it primarily from the taxable brokerage account, so a sudden market drop doesn’t force you to sell stocks at the worst possible moment. We also talk through keeping a HELOC as a backup plan rather than the main plan, and why retirement accounts often belong in simple equity index funds when you truly don’t need the money for a decade or more.
Then we get tactical on taxes. Lower-income years can open the door to tax loss harvesting and tax gain harvesting, including the often-missed 0% long-term capital gains bracket if your total income stays low enough. We also explain why we treat taxes as an expense that changes based on what you sell and when, instead of playing confusing games that “discount” the value of entire accounts.
To round it out, we respond to listener skepticism about after-tax portfolio valuation frameworks, advisor incentives, and the Cedarberg paper’s practical limits. If you like smart investing, plain language, and a dash of “more cowbell” diversification talk, hit subscribe, share the episode with a friend, and leave us a review so more DIY investors can find the show.
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In this episode we answer emails from Tim, Avid Listener, and Aaron. We discuss bond allocation in an intermediate accumulation Golden Butterfly style portfolios, the follies of fixating on fund or ticker symbol returns instead of the purpose of an asset in a portfolio, and the follies of holding too much in cash.
And we discuss our Top of the T-shirt Campaign (Part Deux!) for the Father McKenna Center.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Analysis of TLT, MBB and SPY: Asset Analyzer for ETFs, Stocks, and Funds | testfolio
Analysis of gold royalty companies: Asset Analyzer for ETFs, Stocks, and Funds | testfolio
Liz Ann Sonders interview of Keith McCullough: What Happens After Peak Inflation? (With Keith McCullough) | Charles Schwab
Breathless Unedited AI-Bot Summary:
Chasing a higher yield can feel like progress, but what if it is quietly breaking your portfolio? We take on three listener questions that all circle the same core problem: fund shopping without a framework. From a Golden Butterfly style intermediate-term risk parity portfolio stuck with a limited 401k bond menu, to the temptation to use stable value funds, Roth space, and asset swaps to “fix” taxes, we talk through what matters most when your goal is steady accumulation for a real-world timeline like three to seven years.
Next we get blunt about substitutes. Mortgage-backed securities ETFs may look like a better bond deal on paper, and gold royalty companies may look like “gold with higher returns,” but risk parity investing is not built by grabbing the flashiest ticker. We explain the four quadrant model and why each sleeve has a job: stocks for long-run growth, Treasury bonds as recession insurance that can be rebalanced when equities drop, and alternatives like gold or managed futures for low correlation during inflationary or stagflationary shocks. The right question is not “what returned more,” but “what will behave the way I need when the economic weather turns.”
We also address a popular habit that masquerades as investing: moving cash between HYSAs, money markets, and short-term funds to optimize yield. If tiny rate differences feel meaningful, it may be a sign you are holding too much cash and taking on cash drag over the long run. We close with our weekly portfolio reviews across the eight sample portfolios and a reminder that nobody knows what markets will do next, so a sturdy process matters more than predictions.
If this helps, subscribe, share the episode with a fellow DIY investor, and leave a review so more people can find Risk Parity Radio.
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In this episode we answer emails from Michael, Raphy, and Roman. We discuss using a short-term SPIA as a bridge before Social Security and why it probably doesn't matter one way or the other if you are even a little over-saved, and how much flexibility a well-funded risk parity portfolio can really provide. We also tackle covered calls, dividend and income fund hype, and why portfolio design starts with asset classes, taxes, and drawdown tolerance rather than chasing tickers. We also discuss the real differences between more and less aggressive risk parity style portfolio on an efficient frontier.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Ben Felix on Covered Calls (one of several videos): Covered Calls: What People (Still) Get Wrong
Comparison of ADX with Common Index Funds: Asset Analyzer for ETFs, Stocks, and Funds | testfolio
Ben Felix on Dividend Investing: The Irrelevance of Dividends
Afford Anything Episode #618: They Ran Out of Money. I Didn’t. Here’s Why.
Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive
Comparison of Golden Butterfly and Roman's Modification: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Breathless Unedited AI-Bot Summary:
A five-year annuity that throws off real cash flow can look almost too good to be true, especially when you’re trying to retire before Social Security and Medicare. We dig into a listener’s plan to leave IT at 55 with a $175,000 budget and a risk parity style portfolio, then pressure-test the idea of using a short-term period-certain SPIA as a “pension bridge” to reduce early sequence of returns stress. The big lens we keep coming back to is proportionality: if the annuity is under 10% of the portfolio, it behaves a lot like a cash pile, CD ladder, or bond ladder and may not meaningfully change the long-run plan, but it can change how you sleep at night.
From there, we shift into options and “extra income” strategies. We break down why covered calls often cap upside and can reduce long-term total return, and we draw a bright line between that and riskier approaches like selling puts, where rare crashes can cause huge losses. If you’re going to trade at all in retirement accounts, we argue for a simple discipline: don’t obsess over what you might make, calculate what you could lose, then size it so it can’t wreck your lifestyle.
We also take on dividend-focused closed-end funds and the lure of shiny tickers. The message is blunt: the first word after income is taxes, and good retirement investing starts with asset classes, tax location, and drawdown tolerance, not fund-of-the-week marketing. We close with a listener’s Golden Butterfly tweaks and what higher withdrawal rates really cost in drawdowns and ulcer index stress. Subscribe, share this with a friend planning early retirement, and leave a review with your biggest question about bridging the years before Social Security.
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In this episode we answer emails from Wilson, Tim, and John. We discuss why life insurance products are not magical perpetual motion machines that make your portfolios go faster, why insurance contracts cannot outperform the same underlying investments once costs and commissions are included, and how insurance marketers mislead the public with biased studies. We also a listener's musical tastes and answer an I Bonds allocation question.
And we discuss our Top of the T-shirt Campaign (Part Deux!) for the Father McKenna Center.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Wilson's First Link to Insurance Marketing Materials: WBC-Whitepaper-Integrating-Whole-Life-Insurance-into-a-Retirement-Income-Plan-Emphasis-on-Cash-Value-as-a-Volatility-Buffer-Asset.pdf
Wilson's Second Link to Insurance Marketing Materials: Benefits of integrating insurance products into a retirement plan (pdf)
Breathless Unedited AI-Bot Summary:
Whole life insurance gets marketed like a magic third thing: safer than stocks, better than bonds, and somehow able to “buffer” retirement withdrawals when markets drop. We slow that claim down and look at what it really is: an insurance contract with costs, commissions, and built-in friction that has to come out of your return somewhere.
We talk through why incentives matter so much in the financial services industry, especially when the person advising you also gets paid to sell permanent life insurance. Then we use a simple mental model, the first law of thermodynamics, to explain why inserting a contract between you and the underlying investments cannot increase performance. If an insurance company invests your premiums in conservative assets, the most you can get back is what those assets earn minus the policy’s expenses, insurance charges, and sales costs.
Next, we show how the sales math often works: bury the assumptions, headline the results. We break down the kinds of inputs that can make a Monte Carlo analysis or a 4% rule chart look scary on purpose, including inflated fees, unrealistic retirement tax brackets, unnecessary term insurance choices, and conservative forward return “crystal ball” projections. Frank also shares his own whole life policy numbers as a real-world reference point.
We close with a listener question on I Bonds versus Treasury bond ETFs, a straightforward take on tax location and allocation choices, and our weekly portfolio review across the sample risk parity portfolios. If you find this useful, subscribe, share the episode with a DIY investor, and leave a rating and review.
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In this episode we answer emails from Peter, Alejandro, and Anderson. We discuss retiring early and related family, work and community considerations, various portfolio and tax considerations and gambling problems, AI-driven portfolio tweaking, when simplicity applies, and share a fast way to summarize old episodes with NotebookLM. And reference our Top of the T-shirt Campaign (Part Deux!) for the Father McKenna Center.
Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
NotebookLM Summary of Chad's Question from Episode 478 -- "Mastering Portfolio Distributions": NotebookLM - Portfolio Distribution Mechanics
Breathless Unedited AI-Bot Summary:
Quitting a high-paying job sounds like a math problem until you try living inside the decision. We hear from a 37-year-old parent with $1.3 million invested, a paid-off home, and a growing sense that learning about early retirement has made work feel unbearable. We walk through what those numbers actually support, why a 5% withdrawal rate can look fine on a spreadsheet but feel risky for a young family, and why expenses often rise as kids move toward the teen years and college. Our goal is to replace vague fear with concrete planning and a bigger, more realistic buffer.
From there we get tactical: how to think about asset allocation as one unified portfolio across taxable and retirement accounts, how tax efficiency should influence what goes where, and what options exist for accessing retirement money earlier than 59.5. We dig into Roth conversion timing, and we clear up a major misconception about 72(t) distributions by explaining how splitting IRAs can make the tool far more flexible than people assume.
Then we zoom out to portfolio construction. We explain why many formal “risk parity” or Ray Dalio all-weather style proposals end up bond-heavy, why that design often expects leverage, and why our retirement-oriented approach favors diversified building blocks like equities, Treasury bonds as recession insurance, gold, and managed futures. We also answer two more emails: one on using Google NotebookLM to generate a visual summary of rebalancing, and another on leveraged ETFs, AI recommendations, and moving-average trading rules, including why complexity can create tax headaches and ugly drawdowns.
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In this episode we first kick off the Top of the T-Shirt Campaign Part Deux (!) for the Father McKenna Center and explain why matching funds, donated resources, and volunteers make every dollar go further. Then we answer emails from Aaron, Hostile Witness, and Jenzo. We discuss improving on the Permanent Portfolio , managed futures, leverage, drawdowns, and why we prefer diversification over CAPE-wearing Sonias.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation): Donate - Father McKenna Center
Don's Work at the Father McKenna Center: Ignatian Volunteer: Don
Annie's Work and the Father McKenna Center: Jesuit Volunteer Corps: Annie
Aaron's Portfolio Charts Article Reference: What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts
Jenzo's Portfolio Link (2025): Portfolio Backtester for ETFs and Asset Allocation | testfolio
Jenzo's Crystal Ball Link (Research Affiliates): Asset Allocation
Breathless AI-Bot Summary:
A listener asks a deceptively simple question: if you could add just one thing to a well-built retirement portfolio, what would it be and what would you cut to make room? That question takes us from charitable giving to portfolio construction, because both are really about the same goal: getting more real-world result per unit of effort, risk, or dollars.
We start by launching this year’s Top of the T-Shirt campaign supporting the Father McKenna Center in Washington, DC. Two anonymous listeners have already pledged matching funds, and we break down why this charity “punches above its weight” through leverage: donated space, in-kind grocery support that includes fresh food, and a huge volunteer base that keeps overhead low. If you care about effective philanthropy, this is a concrete look at how structure and incentives can multiply impact.
Then we move into listener mail on retirement portfolio design, including a modified Permanent Portfolio aimed at improving safe withdrawal rate and reducing cash drag. We explain what changes help and why, then give our one-asset-class answer: managed futures, funded by trimming gold. We also respond to an aggressive 75% stocks and 25% gold allocation, discuss drawdowns and factor tilts like small cap value, and talk through leveraged “stacked” funds. Finally, we address valuation-based “crystal ball” forecasts and why we’d rather diversify across equity styles and true diversifiers than try to time markets.
If this mix of risk parity investing, retirement income strategy, and practical diversification helps you think more clearly, subscribe, share the show with a friend, and leave a review where you listen.
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In episode we answer emails from Nick, Patrick and Aaron. We discuss matching goals with portfolios for an early FI person, review an Early Retirement Now blog post about diversification misperceptions, and discuss using STRIPS funds instead of regular treasury bond funds.
Links:
Early Retirement Now Blog Post: How to "Lie" with Personal Finance - Part 3: Diversification - Early Retirement Now
Large Cap Growth and Small Cap Value Long Term Comparison: Asset Analyzer for ETFs, Stocks, and Funds | testfolio
Portfolio Comparison With Sharpe and Sortino Ratios: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Breathless AI-Bot Summary:
Retiring early doesn’t magically change the laws of investing, but it does expose your real priorities fast. We read an email from a 35-year-old on the FIRE path with a $1.5M portfolio, a conservative 3.5% withdrawal rate, and a not-so-conservative 100% stock allocation. That mismatch opens up the biggest theme we keep coming back to: your portfolio tells the truth about what you value, whether that’s sleeping well at night or trying to out-run every bad decade and still “win” against the S&P 500.
From there, we tackle a common myth in the early retirement community: that a longer retirement means you need a completely different approach. We argue the first 10 years are the make-or-break window for sequence of returns risk at any age, while the true long-horizon enemy is inflation. That leads to a practical discussion of cash drag, why holding too much cash or short-term bonds can quietly reduce outcomes, and why a risk parity style portfolio can trade a bit of upside for shallower drawdowns and more predictable behavior across tough markets.
We also respond to a listener who asks about a blog post attacking “exotic” diversification, breaking down what diversification really means (hint: not counting ETFs) and why correlations shift across economic regimes like recessions and inflation shocks. Finally, we answer a question on Treasury STRIPS funds like EDV and ZROZ: when they’re useful, why they can feel like leverage, and how volatility matching and position sizing matter, especially after a 2022-style rate move. If you find this helpful, subscribe, share the show with a fellow DIY investor, and leave a rating or review so more people can find it.
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In this episode we answer emails from Optimus Bill, Arun, and Aaron. We discuss why we do this show, how to build real friendships as an adult, and how to think clearly about investing without chasing fame or noise. Then we challenge the “gold returns zero” myth with a supply-and-demand lens that looks beyond popular US-centric group-think.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Father McKenna Center Donation Page: Donate - Father McKenna Center
Slides from the May 31 Zoom AMA; 2026-05-31 Risk Parity Radio AMA Summary Slides.pdf - Google Drive
Video from the May 31 Zoom AMA: 2026-05-31 Risk Parity Radio AMA Video Summary.mp4 - Google Drive
Breathless Unedited AI-Bot Summary:
A listener asks a deceptively simple question that a lot of personal finance repeats without thinking: if gold’s expected real return is “about zero,” what does that imply about commodities, and why would you hold either one in a long-term portfolio? We take that head-on, starting with what the data actually shows in the post-1970 fiat currency era, then working outward into the real drivers that move gold: supply that barely budges, global demand that Americans often ignore, and the uncomfortable possibility that money supply growth helps explain why gold has compounded the way it has.
Before we get there, we share two listener emails that land in a surprisingly human place. We talk about financial independence as “almost winning the game” and the tricky part of figuring out how to stop playing. We also reflect on why we keep Risk Parity Radio small and audienced-focused, why we avoid the usual podcast growth playbook, and how friendship, vulnerability, and alignment beat chasing money, fame, and power.
We also shout out the community: creative “perfect number” donations for Fairfax CASA, a listener-organized Zoom AMA, and the kind of nerdy curiosity that makes building a risk parity style asset allocation feel less lonely. Then we close with our weekly market recap after a nasty Friday selloff and a full performance review of the sample portfolios, including stocks, Treasury bonds, REITs, gold, commodities, managed futures, and a clear warning on leveraged experimental mixes.
If you like thoughtful investing talk that stays grounded in data, diversification, and real life, subscribe, share the show with a friend, and leave us a review so more do-it-yourself investors can find it.
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In this episode we answer emails from Mark and Eric. We discuss managing finances through aging, dementia, and what happens when the family’s primary money manager can’t manage anymore. Then we challenge popular fear-based retirement thinking and explain why hoarding wealth can be a bad strategy for well-being and relationships.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Father McKenna Center Donation Page: Donate - Father McKenna Center
Article On Fear- and Hoarding-Based Planning: The Many Utilities of Retirement - Articles - Advisor Perspectives
A Better Approach To Spending In Retirement That Avoids Fear-Based Hoarding And Maximizes Well-Being: RPR Episode 436 Illustrated: The Two Halves of Your Financial Life
Breathless Unedited AI-Bot Summary:
What’s the real plan if the person running the budget and investments can’t do it anymore? Not “someday.” Not “we’ll figure it out.” We talk through the unglamorous but essential side of retirement planning and DIY investing: continuity. That means account access, fewer scattered institutions, clear instructions, and a system your spouse can operate even if they’d rather be in the garden than staring at spreadsheets.
We share practical steps that reduce chaos fast: consolidate accounts, use joint ownership where it makes sense, keep a password manager, and maintain a simple net worth sheet with a second tab that explains what to do and why. We also connect the dots to estate planning basics like power of attorney and why writing an investor policy statement can be a gift to the people who may need to step in later.
Then we pivot to a deeper issue behind a lot of retirement advice: fear. We respond to an article that tries to justify hoarding as a retirement “utility,” and we argue that optimizing your life around fear of running out can turn money into a stand-in for therapy. Instead, we lay out what actually improves long-term well-being: stronger relationships, experiences that create flow, buying back your time, and charitable giving, all while still keeping your finances durable.
Subscribe, share this with someone who manages the money in your family, and leave a review so more DIY investors can find the show. What would you put in your one-page continuity plan?
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In this jam-packed crushed-fresh stone-solid hour-busting episode we do a trifecta response to one most excellent email from Rebecca. We discuss portfolios for FI-lanthropy, options and resources for making a transition from a 100% stock portfolio with tax and ACA subsidy issues, the drawbacks of bucketeering compared with the joys of asset swaps, and the socio-political overhang attached to gold and how that is evolving towards more rational uses of it by big time retail personal finance and others.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Father McKenna Center Donation Page: Donate - Father McKenna Center
Wells 4 Wellness: Wells 4 Wellness - Wells 4 Wellness
Yield & Spread/FI-lanthropy: The FI-lanthropy Pledge | Yield & Spread
The Portfolio Matrix Tool: Portfolio Matrix – Portfolio Charts
Outline of Financial Advisor Best Practices: Strategic Retirement Planning: A Summary of Best Practices from Tenon Financial - Google Docs
How To Do An Asset Swap Video from Risk Parity Chronicles: How to Do an Asset Swap
Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive
Catching Up to FI Gold Episode: I Love Goooooold?! :) | Frank Vasquez | 184
Interview of Bob Elliot on the Compound Podcast re Gold (start at 1:10): The Blue Chips of Junk | TCAF 175
Breathless Unedited AI-Bot Summary:
You can do everything “right,” follow a simple index plan, retire early, and still wake up one day as an accidental 100% stock investor. That’s what happened to Rebecca and Joe, early retirees in their mid-30s who needed fast cash for a home purchase and ended up selling bonds and leaning on a margin bridge. Now they’re staring at a stock-only portfolio, big unrealized gains, and a real constraint most advice ignores: diversifying could blow up taxes and ACA health insurance subsidies.
We walk through a risk parity mindset built for real life, not perfect spreadsheets. We use Portfolio Charts to compare diversified asset allocation models by safe withdrawal rate, volatility, Ulcer Index, and drawdowns, and we explain why portfolios like the Golden Ratio and Golden Butterfly can be surprisingly “philanthropy-friendly” if you want to spend and give consistently. Then we get practical: stop treating taxable and retirement accounts like separate buckets, rebalance the diversifiers inside retirement accounts first, and learn how an asset swap can fund spending while keeping your overall allocation on track.
We also tackle the emotional side, especially gold. If gold feels like a doomsday signal, we unpack the uniquely American baggage behind that reaction, why ETFs changed everything, and how gold can function as plain old diversification alongside intermediate and long-term Treasury bonds and even managed futures. We close with our weekly sample portfolio reviews and June distribution updates so you can see the framework in motion.
Subscribe, share the episode with a fellow DIY investor, and leave a rating or review so more early retirees can find a calmer way to diversify.
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In this episode we answer question from Rob, Matthew, and Luke. We discuss the pitfalls of trying to rely on an all-bond portfolio in retirement and better options, the problems with over-valuing financial simplicity over good living, the benefits of the Choose FI podcast, muddled thinking about the concepts of “self-cleansing” and the momentum factor, why reassessing a retirement plan beats obsessing over a perfect forecast, and why that's not likely to be necessary with a risk parity style portfolio due to its lower risk profile.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Fairfax CASA Donation Page: Donate - Fairfax CASA
Optimus Bill's Risk Parity Radio Zoom Party (May 31 @ 4 pm EDT): https://us06web.zoom.us/j/3125439422?pwd=dHh6aFlYRk9TWFZ4c29POTA4OThKUT09&omn=85117353750
Portfolio Charts Bond Portfolio SWR: Withdrawal Rates – Portfolio Charts
ChooseFI Episode 570: State of the Stock Market 2025 Q&A | Brian Feroldi | Ep 570
ChooseFI Episode 574 (with Yours Truly): Top Five Regrets of the Dying | Book Club | Ep 574
Comparison of Large Cap Momentum with Other Common Factor Combinations: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Breathless Unedited AI-Bot Summary:
A 5% Treasury yield can make a bond-only retirement plan sound like the cleanest solution on earth: buy long-term government bonds, take the interest, stop watching markets, and never rebalance again. We slow that idea down and stress-test it the way a DIY investor should, starting with the basics people love to skip: inflation-adjusted returns, real purchasing power over decades, and the ugly surprise of turning your whole portfolio into federally taxable ordinary income. “Simple” can get expensive fast when taxes and inflation show up every single year.
From there we zoom out to the part that rarely makes it into retirement math. We talk about why chasing simplicity for its own sake is a false goal, how fear-based planning can push you toward over-saving and underliving, and what it looks like to use money to actually improve your life. If what you really want is hands-off income, we also explain why annuities are purpose-built for that job and can be cleaner than fiddling with a bond ladder.
Then we tackle an investing debate sparked by another show: are small caps “bad,” and what does “self-cleansing” even mean in index funds? We break down why all index funds are rules-based, how cap-weighted funds quietly embed a momentum tilt, and why small cap value still earns a role for diversification even when it lags for long stretches. We finish with a practical retirement planning mindset: instead of worshiping a perfect forecast, rerun the plan as life changes and make decisions based on today’s reality.
Subscribe, share this with a friend who loves “simple” investing rules, and leave a review with the one portfolio myth you want us to unpack next.
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In this episode we answer emails from TJ, Jose and Optimus Bill. We discuss the foibles of trying to catch up via investment picking if you are behind on retirement, debunk CAPE-style and other crystal ball forecasts from "experts" that Level Two investors often fixate upon, lay out practical growth-tilted allocations that can beat narrative-driven investing and invite you all to contact Optimus Bill about your Risk Parity Radio listening habits.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
FI Service Corp DC Charitable Event: DC Double Play
Father McKenna Center Donation Page: Donate - Father McKenna Center
Michael Batnick Critique of CAPE Ratio "Predictions": Stocks Are More Expensive Than They Used to Be
Accumulating With a Golden Ratio Portfolio Article: Minimize Your Miss – Portfolio Charts
Catching Up to FI Episode 100: 0️⃣ From Zero to Hero: A Late Starter’s Guide to the Galaxy 🌌 | Becky Heptig | 100
Half US LCG/Half SCV Portfolio vs. US Total Market: Portfolio Backtester for ETFs and Asset Allocation | testfolio
International Half LCG/Half SCV Portfolio vs. International Total Market: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Merriman ETF Recommendations: Best-in-Class ETFs | Merriman Financial Education Foundation
Email Optimus Bill Here: bill@catchinguptofi.com
Breathless AI-Bot Summary:
The fastest way to get yourself into trouble as a DIY investor is to believe you can “catch up” with a smarter prediction. We start with a listener who’s anxious about high stock valuations, AI hype, and a potential lost decade and asks the question most people are thinking but rarely say out loud: does it really make sense to go all-in on stocks if you cannot afford a big drawdown?
We break down why the real accelerator toward financial independence is usually your savings rate, especially when your investment pile is still small, and why a lucky run in individual growth stocks can create a dangerous feedback loop. From there we take a hard swing at valuation crystal balls like CAPE ratio forecasting and explain how to test any market-timing claim against forward-looking evidence and simple base rates rather than headlines and vibes.
Then we pivot to practical portfolio construction. If you want growth without betting your future on a single narrative, we talk about diversification that actually changes the ride: balancing large-cap growth with small-cap value, thinking more clearly about international exposure, and knowing when risk parity diversifiers like long-term Treasuries, gold, commodities, and managed futures make sense. We also answer a high-earner question about moving from a real-estate-heavy balance sheet into a growth-oriented market portfolio and why we’re skeptical of robo-advisors when a simple ETF plan will do.
If you like clear rules, real-world asset allocation, and a little portfolio performance nerdiness, hit subscribe, share this with a friend who’s chasing forecasts, and leave a review so more investors can find the show.
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In this episode we answer emails from Luc, Deep, and Paul. We discuss the French Canadian "Sak kosh" portfolio, try to help out the elder Sonia sleep well at night, distinguishing small cap blend funds from small cap value funds, and share how we use AI tools to summarize long investing content without losing the source material.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
The Superman Portfolio Withdrawal Rates: Withdrawal Rates – Portfolio Charts
The Superman Portfolio Drawdowns: Drawdowns – Portfolio Charts
The Superman Portfolio Portfolio Matrix: Portfolio Matrix With The Superman Portfolio.png - Google Drive
RPR Episode 436 Summary Video: RPR Episode 436 Illustrated: The Two Halves of Your Financial Life
Admiral Ackbar's Best Practices For Retirement Planning: NotebookLM - Retirement Tactical Briefing with Admiral Ackbar and Tenon Financial
Daniel Plainview's "I Drink Your Milkshake" Best Practices for Retirement Planning: NotebookLM - Plainview Wealth Extraction
Video Version: NotebookLM - The Ruthless Extraction
Breathless Unedited AI-Bot Summary:
A listener builds a Canadian “risk parity style” portfolio that looks like a mad science project on paper and then asks the question we all quietly worry about: is this clever diversification, or is it just complexity wearing a lab coat. We walk through the logic behind mixing small cap value, gold, long-duration Treasuries, managed futures, and a small dose of leveraged ETFs, plus the real constraint that changes everything for many investors: you can only buy what your country and accounts actually offer. I share how I think about backtesting when tools don’t support Canadian ETFs, why proxies can be useful, and why great historical results still don’t remove behavior risk.
Then we shift to a common real-life retirement planning scenario: someone in their mid-70s sells a home, moves into a retirement community, and only needs about 2% per year from investments. Instead of forcing a complicated portfolio to do the job, I explain why a single premium immediate annuity can be the cleanest solution for a very risk-averse retiree, potentially covering that gap with a relatively small slice of the nest egg and letting the rest stay invested simply and calmly. We also talk about separating mandatory expenses from discretionary spending so the plan feels safe and sustainable.
We close with a fast answer on asset location for a saver juggling multiple account types and debating small cap value placement. The punchline: make sure you’re actually buying small cap value, and don’t over-optimize what usually doesn’t matter much. Plus, a quick look at using Google NotebookLM to summarize long podcasts and documents in a way that stays grounded in the inputs you provide. If you found this helpful, subscribe, share the show with a friend, and leave a review so more DIY investors can find it.
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In this episode we answer emails from Geraldo, Rock, Ute. We discuss how to give well, shifting from big-name school donations to smaller charities with immediate impact, moving from individual stocks to a Golden Butterfly style portfolio with less stress, treating Roth conversions as optional and highly personal rather than automatic, using a conservative Interactive Brokers margin loan as a temporary cash buffer, lowering margin-call risk with diversification and alternatives, and pressure-testing inflation claims for retirees and comparing U.S. data with and older study from The Netherlands.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
WCI Podcast Episode re Charitable Giving with Rebecca Herbst: How to Maximize the Impact of Your Charitable Giving - WCI Podcast #470
Referenced Inflation Study Paper: S1474747216000202jra 85..109
J.P Morgan Inflation Study: JP_Morgan_White_Paper_Three_Retirement_Spending_Surprises.pdf - Google Drive
RAND Inflation Study: Spending Trajectories After Age 65: Variation by Initial Wealth | RAND
Breathless Unedited AI-Bot Summary:
You can be “right” about taxes and still be wrong about living. We dig into three listener emails that expose a common trap for smart investors: turning retirement into an endless optimization project, while the real goal is a calmer portfolio, a sustainable withdrawal plan, and a life you actually want to spend money on.
First, we walk through a practical way to transition from individual stocks to a Golden Butterfly portfolio without getting paralyzed by detail. We talk about why macro allocation matters more than the exact ticker list, how to think about growth vs value exposure, and why simplifying inside retirement accounts is usually easier than in taxable accounts where capital gains can bite. We also share what we’d try to eliminate first when someone is de-risking for retirement.
Next, we zoom out to retirement tax planning and charitable giving. We discuss why blanket advice on Roth conversion strategy and withdrawal order often fails, what it means to “disgorge” traditional IRAs before RMD age, and how qualified charitable distributions (QCDs) can be a quietly powerful tool for charitably inclined retirees.
Then we tackle margin as a tool, not a lifestyle. We break down using a conservative Interactive Brokers margin backstop, how diversification can reduce drawdowns and margin-call risk, and why assets like Treasuries, gold, and managed futures show up again in risk parity style thinking. We also address a listener challenge on retiree inflation and why country, data vintage, and healthcare systems can flip the conclusion.
If you like clear portfolio mechanics with real-world tradeoffs, subscribe, share the show with a friend, and leave a review so more DIY investors can find us.
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In this episode we answer emails from Milo, Scott, and Joel. We discuss bad advisor incentives and how to classify them by their business models, identify the only business model you want to patronize, and then move on to Treasury STRIPS and rebalancing realities, practical withdrawal mechanics with a test portfolio, and why Bitcoin’s high correlation to tech stocks undermines its role as a diversifier.
We also celebrate the final results of the Fairfax CASA matching campaign and share a thank-you message from their executive director.
Links:
Classifying Financial Advisors By Their Business Models: Interacting with the Financial Services Industry with SC Gutierrez
Kitces Article on Rebalancing: Optimal Rebalancing – Time Horizons Vs Tolerance Bands
Building a Sample Portfolio Video: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio) - YouTube
Video on Managed Futures and SDMF: Simplify SDMF in Focus - YouTube
Breathless Unedited AI-Bot Summary:
A matching donor puts $20,000 on the table, the audience steps up, and suddenly Fairfax CASA is funded far beyond what anyone expected. We start with that story because it says something important about this community: you can be serious about investing and still lead with empathy. We share the final campaign results and a message from Fairfax CASA’s executive director about what this support means for children navigating foster care and the court system.
Then we shift back to what Risk Parity Radio does best: practical emails from DIY investors who want clearer rules and fewer regrets. We talk about the “67-fund portfolio” problem, why complexity is often a sales tactic, and how to screen out conflicted advice from banks, credit unions, insurance shops, and big marketing-heavy firms. We also dig into the AUM model versus flat fee and hourly planning, plus why smart retirement planning often comes down to tax planning and behavioral discipline more than picking the perfect fund.
From there, we get hands-on with portfolio construction and process. We cover Treasury STRIPS funds like GOVZ, why you cannot reliably time the best rebalancing moment during a recession, and what to do instead with partial rebalancing or rebalancing bands. We also answer a nuts-and-bolts withdrawal question using a test portfolio approach, and we close with a straight take on Bitcoin correlation: if it moves with stocks, it is not diversification. Along the way, we explain what “alternative assets” really means and why gold and managed futures keep showing up in risk parity style asset allocation.
Subscribe, share this with a friend who’s tired of salesy advice, and leave a review so more investors can find the show.
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In this episode we answer emails from Michael, Jim, and Optimus Bill. We start with a 67-year-old investor who is all-in on equities and cannot sleep, and how changing portfolio allocations can lead to better rest. We share a framework of "the three H's" for determining whether you are Hustling, Hoarding, or Harvesting your way through retirement, and how that may impact your well-being over time. We also dig into why people chase bond ladders and bucketeering.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Testfolio Analysis with Sleep-Better-At-Night Metrics: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Optimus Bill's Bond Ladder Extravaganza Article: Building a Bond Ladder with Individual Bonds and ETFs
Ben Carlson's Explanation As To Why Bond Ladders and Bond Funds are Functionally the Same: Owning Individual Bonds vs. Owning a Bond Fund - A Wealth of Common Sense
Breathless Unedited AI-Bot Summary:
Your portfolio should not be a nightly stress test. We start with a listener who is 67, 100% in equity funds, and staring down retirement in the next one to three years while worrying about an extended downturn. From there we get practical about “sleep-at-night” portfolio design, comparing volatility, maximum drawdown, and even the Ulcer Index across common setups like an S&P 500 heavy approach, a Bogleheads-style three-fund portfolio, a classic 60 40 mix, and a risk parity style Golden Ratio portfolio.
Then we zoom out to the bigger question of what money is actually for. I share a simple framework I call the three H’s: hustling, hoarding, and harvesting. We talk through how each approach affects real life outcomes like relationships, experiences, buying back your time, and giving, and why a portfolio that supports harvesting can matter more than a portfolio that simply wins a return contest.
We also tackle a timely question about bond ladder ETFs and why so many ladder, bucket, and time-segmentation products keep popping up. The blunt take: a lot of it solves a fear problem more than a finance problem, and the difference between ladders and bond funds is often smaller than people think. We close with our weekly review of the eight sample portfolios, covering stocks, treasury bonds, gold, commodities, managed futures, and more.
If this helped you think more clearly about retirement investing and diversified asset allocation, subscribe, share the show with a friend, and leave a review so more DIY investors can find it.
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In this episode we answer emails from Zach, Brian, Holly and Optimus Bill. We discuss a way to estimate retirement health care costs using current data, clear up the “index fund” labelling problem and talk about why indexed dogs and cats won't start living together, have fun with milkshakes, and map out what tends to help a portfolio survive stagflation. But first we celebrate a huge community win for Fairfax CASA with Queen Mary.
Links:
J.P Morgan Inflation Study: JP_Morgan_White_Paper_Three_Retirement_Spending_Surprises.pdf - Google Drive
Ben Felix Interview on Bigger Pockets Money: Is Small Cap Value Worth It? Ben Felix Explains the Truth About AVUV & Factor Investing
Holly's Milkshake Link: I can’t believe he didn’t notice 💀 #shorts
Breathless Unedited AI-Bot Summary:
One spreadsheet can calm a lot of retirement anxiety, especially when the scariest expense is the one you cannot “average” from your current budget: health care. We start with a listener question about forecasting medical costs and how to decide whether an HSA can realistically cover them. Instead of relying on hype filled calculators, we talk through an actuarial style method using real ACA marketplace premiums by age in today’s dollars, then turning that stream into a flat, term premium like estimate you can inflation adjust and stress test.
We also tackle a worry we hear everywhere: if everyone is buying index funds, do they stop working? The answer depends on what you mean by “index fund.” We unpack the messy language around mutual funds vs ETFs, cap weighted vs other index designs, and why a better mental model is rules based “algorithmic” investing versus human stock picking. From there, we discuss why diversification often means holding more than just large cap weighted exposure, and why factor investing and small cap value tilts keep coming up in serious portfolio design.
Then we wade into the market regime that makes risk parity listeners sweat: stagflation. We explain why managed futures often does the heavy lifting when inflation and rates trend, how commodities fit, why gold can help over long arcs but disappoint on the clock, and why concentrated sector bets in energy or utilities are not automatically the solution. We also share a realistic take on margin loans as a cash flow tool, including why broker interest rates matter if you ever use that lever.
If you got value from this one, subscribe, share it with a DIY investor friend, and leave a review so more people can find the show.
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In this episode we answer emails from Kyle, Tim, and Tim. We discuss dealing with a recalcitrant parent who won’t talk about the straw in their milkshake, outline flexible retirement withdrawal planning with asset swaps, and explain how to escape TSP limitations.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Financial Personality Traits Research Presentation: Big Five Unified Financial Profiles Presentation.pdf - Google Drive
Tax Book: Amazon.com: Tax Planning To and Through Early Retirement: 9798999841599: Garrett, Cody, Mullaney, Sean: Books
Admiral Ackbar's Tax Book Summary: Admiral Ackbar's Guide to Tax Planning in Retirement Slides.pdf - Google Drive
Kitces Article: Tax-Efficient Retirement Portfolio Spending Strategies
Asset Swap Video from Risk Parity Chronicles: How to Do an Asset Swap
Optimus Bill on Bigger Pockets Money: The Decumulation Strategy After Hitting Financial Independence | Bill Yount
Optimus Bill on the Morningstar Long View Podcast: The Long View: Bill Yount: How Late Starters Can Find Financial Independence
Breathless AI-Bot Summary:
Someone you love is doing “fine” on paper, yet you can’t shake the feeling they’re getting quietly drained by bad financial products or high advisory fees. That tension is where we start: the hard part often isn’t investment math, it’s the relationship dynamics that make a parent shut down the moment money comes up.
We read an email from a listener trying to help his retired mom who prefers to delegate and doesn’t want to learn finance. We talk through why children often can’t be “a prophet in their own land,” how to lower the temperature, and why it can be smarter to focus on replacing a poor-fit advisor instead of trying to force a DIY investing conversion. If your goal is preserving peace while improving outcomes, this is a realistic playbook.
Next we get into retirement withdrawal strategy and tax planning. The usual media advice about which account to tap first falls apart once you factor in lifetime tax minimization, Roth conversion windows, Social Security timing, ACA subsidy cliffs, and IRMAA. We also explain the idea of an asset swap so you can reduce an inflated holding (like gold in a Roth IRA) while keeping your overall asset allocation and diversification intact.
Finally, we answer a newly retired federal employee wrestling with Thrift Savings Plan limits, the case for a TSP rollover to an IRA, how to think about 72T SEPP planning account-by-account, and how to rebalance when not every asset is available in every account. We close with our weekly risk parity style portfolio review and the May distribution rundown across the sample portfolios.
Subscribe, share the show with a DIY investor friend, and leave a review on your podcast app so more people can find it. What’s the toughest money conversation you’ve had with family?
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In this episode we answer emails from Thirsty Horse, Mark, and Mike. We discuss a wise friend and lessons on clarity, happiness, and preparing for the end, how we got involved with the Father McKenna Center and Fairfax CASA, and dig into the real work behind CASA and foster care. Then we pivot back to practical investing and tax planning without shortcuts.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Choose FI Episode on The Five Regrets of the Dying (and Mamie): Top Five Regrets of the Dying | Book Club | Ep 574
Breathless Unedited AI-Bot Summary:
You can have a rock-solid retirement portfolio and still miss the whole point. We start with a final push for Mary’s Fairfax CASA fundraiser, then share why a Court Appointed Special Advocate matters for kids in the foster care system and what real advocacy looks like when courts, schools, and social services move slowly. Mary also tells a case outcome that sticks with you: a child moving from neglect and instability to a stable home after a parent does the hard work over years.
From there, we answer a listener who asks the question behind so many “financial independence” plans: how do you decide what level of time, emotional commitment, and responsibility you can take on? Frank revisits the story of Mamie McCoy and the urgency that comes with a finite life, then we get concrete about the skills that make a strong CASA and the traits that help foster parents provide stability, empathy, and advocacy for children affected by trauma.
We also handle classic Risk Parity Radio topics for the DIY investor: sustainable withdrawal rates, asset allocation, and diversification. We talk through an equity-heavy portfolio that adds long-term Treasuries like VGLT for recession insurance, plus our simple “give away 1% of your portfolio each year” goal for intentional generosity. Finally, we take on portfolio automation, rebalancing, and a big tax-planning mistake: discounting traditional IRA balances by a made-up percentage instead of modeling taxes properly and considering Social Security timing.
If you get value from the show, subscribe, share it with a friend, and leave a rating and review. What’s one cause you’d actually show up for with your time?
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In this episode we answer emails from Jose, Optimus Bill, and Steve. We discuss bonds, retirement taxes, valuing Social Security and when to take it, how some use the four quadrant model for market timing, and the latest wave of complex ETFs. Along the way, we make the case that liquidity is the real goal of retirement planning, not income that may raise your tax bills.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
The CAGE ETF Information Page: CAGE - Calamos Autocallable Growth ETF | Calamos Investments
ETF Slop Video: The Rise of ETF Slop
Breathless Unedited AI-Bot Summary:
Retirement plans fall apart when we confuse comfort words with real outcomes. “Income” sounds safe, but it often creates taxes you do not need, while the thing that actually keeps retirees calm is liquidity: the ability to raise cash on your schedule without wrecking your portfolio allocation. We lean hard into that distinction, using real listener questions to show how risk parity investing and sensible asset allocation can support spending without turning your life into a tax-driven paycheck factory.
We start with a practical bond question that every DIY investor runs into: how should you split Treasury exposure between intermediate-term treasuries (VGIT) and long-term treasuries (VGLT)? We explain what treasuries are supposed to do in a risk parity portfolio (recession insurance), why the “right” answer depends more on your total Treasury percentage than on a perfect formula, and how to sanity-check your choices with backtesting tools. Then we tackle municipal bond funds in a brokerage account, the hidden traps of retirement income marketing, and why liquidity restrictions deserve a black mark in retirement planning.
Next, we take on Social Security claiming strategy without the usual internet optimization spiral. We break the decision into real-world categories, talk longevity and household planning, and share a more grounded way to think about valuation by comparing the benefit to annuity pricing rather than break-even charts. We also revisit the four quadrant model and why it can quietly turn into market timing, plus a skeptical look at new options-based leverage products like CAGE and how it differs from leveraged ETFs like UPRO.
We wrap with our weekly portfolio reviews across the eight sample portfolios, including updates on stocks, gold, treasuries, managed futures, and commodities. If this helped, subscribe, share the show with a friend, and leave a rating or review so more investors can find it.
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In this episode we answer emails from Andrew, Geoff, and Frank. We discuss connecting risk parity investing to a bigger question: how to build a drawdown portfolio you can hold while using money to live a full life. Along the way we share a Fairfax CASA story, dig into narrative psychology, and answer practical fund questions on modifying the sample Golden Ratio portfolio, large cap stock funds, managed futures, and what beta does and does not tell you.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Andrew's Book: Here I Walk: A Thousand Miles on Foot to Rome with Martin Luther: Wilson, Andrew L., Wilson, Sarah: 9781587433054: Amazon.com: Books
Testfolio Comparison of Sample Golden Ratio vs. FAV Mods vs. 60/40 vs. Three Fund Portfolio: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Testfolio Comparison of Sample Golden Ratio vs. FAV Mods vs. 60/40 vs. Three Fund Portfolio (5% Withdrawals): Portfolio Backtester for ETFs and Asset Allocation | testfolio
RPR Episode 436 Summary Video: RPR Episode 436 Illustrated: The Two Halves of Your Financial Life
Breathless AI-Bot Summary:
The best portfolio on paper can still fail in real life if you can’t stick with it when markets get weird. We take a listener-driven mailbag and use it to get practical about risk parity investing, retirement drawdown strategy, and the Golden Ratio portfolio idea as a set of principles rather than a rigid recipe you must copy.
We also pause the market talk to highlight Fairfax CASA and share a powerful story about Christopher, a kid who endured years in the foster system before finally finding permanence through consistent advocacy and support. It’s a reminder that “long-term” is not an abstract concept, it’s something people live through, and steady commitment changes outcomes.
From there we jump into what listeners are wrestling with right now: customizing a drawdown portfolio so you’ll actually hold it. We talk about why personalizing an allocation can increase adherence, when cash is just drag, how international stocks and small cap value (including AVUV-style “best in class” options) can fit, and how to evaluate managed futures funds like DBMF versus alternatives such as CTA. We also answer the beta question directly: there’s no ideal beta target here, because safe withdrawal rates are far more connected to maximum drawdowns and how long a portfolio stays underwater.
If you get value from the show, subscribe, share it with a friend planning retirement, and leave a review on your favorite podcast app.
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In this episode we answer emails from Matt, Michael, Stephen and Al. We discuss expanding the spending muscle in retirement, the generosity of our listeners, more on the Four Quadrant model and its permutations, and how we stay connected to listeners without inhabiting the conference circuit.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Cool Number Nerd Video: Fibonacci Numbers hidden in the Mandelbrot Set - Numberphile
MiB Podcast Episode: Masters in Business: Jean-Philippe Bouchaud - Bloomberg
The Dude's Link re Quadrants and Assets: Structural Diversification for All Seasons - ReSolve Asset Management (investresolve.com)
Hedgeye Asset Chart: Hedgeye Four Quadrant Model Best and Worst Assets.pdf - Google Drive
Bloomberg Inflation Presentation: Bloomberg Investing in Inflationary Regimes Presentation.pdf - Google Drive
Listener Essay on Four Quadrant Model: 15 Uncorrelated Assets | SSiS
Claudia Moise Paper with US Treasuries Correlation Data: Flights to Safety, Volatility Risk, and Monetary Policy by Claudia E. Moise :: SSRN
Breathless Unedited AI-Bot Summary:
Hoarding can look a lot like “being responsible,” especially right before retirement when every headline makes the future feel fragile. We take a listener’s detailed numbers and use them to talk about a problem we see all the time: spending that never catches up with the life you actually want. If your future expenses are likely to decline in real terms, your personal inflation rate may be lower than CPI, and a fixed rule can quietly push you into over-saving instead of living. We share a simple, practical idea for breaking that pattern: create a visible spending bucket, spend intentionally, then review what brought real value and what didn’t.
Then we shift into a deep question from a data-driven listener who tried to test Bridgewater’s four quadrant model using growth and inflation data. We explain why these relationships are probabilistic, why short time frames can look like a noisy blob, and where to look for research that connects macro regimes to asset returns. Along the way we revisit the roles different diversifiers can play in a risk parity portfolio: Treasury bonds as recession insurance, managed futures and commodities for ugly inflation shocks, and gold as a strange but useful diversifier when the world gets weird.
We wrap with our weekly portfolio review and a quick read on what’s been working lately across stocks, small cap value, bonds, gold, REITs, commodities and managed futures, including results from our sample portfolios and a few leveraged experiments. If you like practical asset allocation, retirement withdrawal strategy, and plainspoken investing conversations with some humor mixed in, hit play, then subscribe, share the show, and leave a review so more do-it-yourself investors can find it.
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In this episode we answer emails from Dustin, Optimus Bill, Vaibhav, and Morrie. We discuss how to vet a new "shiny object" ETF, why trying to "fix" target date funds is likely to be a fools' errand as their proper use is extremely limited, and transitioning into a retirement drawdown portfolio without obsessing over recent market highs.
In our Queen Mary segment, we also provide a Fairfax CASA fundraiser update and explain how your donations support foster care advocacy.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Morningstar Analysis of LCOW: LCOW – Portfolio – Pacer S&P 500 Qul FCF Aristocrats ETF | Morningstar
Breathless AI-Bot Summary:
A slick email promises “Quality” and “Aristocrats,” a backtest says it beat the market, and suddenly you are wondering if your portfolio is missing a magic ingredient. We slow that moment down and show you how to think like a process-driven investor instead of a headline-driven one. Starting with a listener question about a brand-new ETF, we walk through a simple evaluation method using Morningstar: check the expense ratio, identify the fund category, inspect the holdings, and compare it to cheaper index funds. The punchline is not about one ticker symbol, it is about learning to spot shiny-object marketing before it steals your time and returns.
From there we tackle a bigger theme: why so much financial media is engineered to keep “Level 2” investors chasing opinions and hopping from strategy to strategy. We talk about data mining, why a 10 to 15 year backtest can be deeply misleading, and what you should demand before believing any performance story. If you care about long-term portfolio design, the right order is asset allocation first, fund selection second, with low costs as a default unless something is truly different.
We also answer questions on target date funds, accumulation versus decumulation, and how real retirement planning gets messy across pre-tax, Roth, HSA, and taxable accounts. Finally, we address a common retirement fear: investing when “the market is high.” We explain why diversification changes that question, how different assets can carry the load at different times, and how to schedule a transition plan if moving all at once feels hard.
Subscribe for more no-nonsense portfolio talk, share this with a friend who keeps getting pitched “new” ETFs, and leave a review if the framework helps. If you can, donate to Fairfax CASA and help provide a steady advocate for children in foster care.
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In this episode we answer emails from Ronald, George, Jeff. We celebrate episode 500 by sharing a few “Easter egg” resources, then jump into listener questions that cut through common investing myths. We discuss a portfolio for a non-profit, rant about TIPS with a Wall Street Journal article to back us up, and talk about various choices in withdrawal methods.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Rant Anthology Slides: Risk Parity Radio Rants Anthology.pdf - Google Drive
Four Quadrant Video: The Four Quadrant Model and the True Meaning of Diversification.mp4 - Google Drive
WSJ Article on TIPS: TIPS_ Inflation-Protected Bonds Dont Help You When Inflation Is High - WSJ Copy.pdf - Google Drive
Bernstein TIPS Article: Riskless at Age 104 - Articles - Advisor Perspectives ("A bond fund manager recently related to me his difficulty in figuring out the role of TIPS in his portfolios. After fumbling for a reply, I realized that he was right: like Social Security, they don’t occupy a formal slot in most folks’ asset allocation. . . . TIPS should be kept mentally separate from the policy asset allocation as well.")
Morningstar Article: Morningstar State_of_Retirement_Income_2025.pdf - Google Drive
EconoMe 2026 Presentation: F. Vasquez EconoMe 2026 Final Slides.pdf - Google Drive
Testfolio Golden Ratio w/CPI-based withdrawals: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Testfolio Golden Ratio w/percentage-based withdrawals: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Breathless AI-Bot Summary:
Episode 500 lands with a simple promise: fewer stories, more data, and portfolio choices that hold up when markets stop cooperating. We share a couple of nostalgic “Easter egg” extras from our back catalog, then dive into listener mail that hits the heart of modern portfolio construction for both individuals and institutions.
First, we tackle a nonprofit investing question about moving from capital preservation to growth using a heavily value tilted stock mix. We break down what that allocation is really buying (small cap value, mid cap value, and a value lean in large caps), why it can shine over very long horizons, and why the same strategy can still test patience for a decade or more. If you’ve ever wondered how to balance expected return against real world tracking error, this section is for you.
Then we hit the big rant: Treasury Inflation Protected Securities (TIPS) are not the inflation shield they’re marketed to be. We walk through the Wall Street Journal’s findings, the 2022 case study, and the bigger point that TIPS are still bonds with rate risk. We also talk about what has tended to help more in inflationary regimes, including commodities, value oriented equities, and managed futures, plus when a TIPS ladder might be a reasonable side tool.
[Truncated due to character limits.]
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In this episode we answer emails from Jose, Luc and Sara. We discuss using specific tax lots to reduce capital gains when reallocating, how the 0% long-term capital gains bracket works and why many land in the 15% bracket, where to hold gold like GLDM across IRAs and taxable accounts, turning off dividend reinvestment to simplify moves and build retirement cash, replacing total bond and international bond funds with Treasury funds like VGIT and VGLT,, why diversification and value exposure can improve safe withdrawal rate odds, supporting and encouraging college-age kids with clear expectations, and tools to model short retirements and scenarios.
We also celebrate a major fundraising milestone for Fairfax CASA and share a real story of how advocacy changes outcomes for teens in our Queen Mary segment.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Chris Corinthian EconoMe Presentation: Chris Corinthian: How to Pay for College Without Student Loans
Jose's Portfolio Link: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Investopedia Capital Gains Taxes Article: Capital Gains Tax: What It Is, How It Works, and Current Rates
Sara's Portfolio Analyses (from prior episode): testfol.io/?s=htNZVoZOZn4
Portfolio Charts Withdrawal Rates Calculator: Withdrawal Rates – Portfolio Charts
Portfolio Visualizer Financial Goals Tool: Financial Goals
Breathless Unedited AI-Bot Summary:
$24,000 raised by listeners, plus a pledged $20,000 match, is the kind of number that stops you in your tracks and then makes you proud to be part of a community. We kick off with a Fairfax CASA update for Child Abuse Prevention Month and a powerful success story about three teen sisters, a young uncle who stepped up, and the CASA volunteer who became the one trusted voice the girls could confide in when everything felt chaotic.
Then we shift into what Risk Parity Radio does best: answering detailed listener emails with practical, step-by-step personal finance guidance. We dig into how to transition a Vanguard-style portfolio toward a risk parity retirement portfolio without detonating a capital gains tax bill, including how to sell specific tax lots, what the 0% long-term capital gains bracket really requires, and when “good enough” beats waiting for perfect. We also cover gold allocation in decumulation (including where GLDM can sit across IRAs and taxable accounts), why turning off dividend reinvestment can make withdrawals and rebalancing cleaner, and why Treasury bond funds like VGIT and VGLT can diversify equity risk better than credit-heavy bond mixes.
We also take a thoughtful detour into family finance: how much to help your kids with college while still protecting their drive and independence, how to have “the talk” about expectations, and ways to cut education costs without cutting opportunity. Finally, we revisit a short-term retirement runway plan and talk scenario testing, safe withdrawal rates, and modeling tools like Portfolio Charts, TestFol.io, and Portfolio Visualizer so you can stress-test risk, time horizon, and side income realistically.
If you found this helpful, subscribe, share the episode with a DIY investor friend, and leave a review so more people can find the show.
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In this episode we answer emails from Frank, Stephen (from Cincy), Jeff, and Sally. We focus on a common retirement blind spot: once you are financially independent, portfolio tweaks matter less than the life choices you make with the time you have. We also address those tweaks and then dig into HSA asset location traps, reflect on our listeners and our mission, and talk about our fundraiser for Fairfax CASA.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Video About the Over-Saver Trap And How To Use Your Money To Improve Your Well-Being In Retirement: RPR Episode 436 Illustrated: The Two Halves of Your Financial Life
The Four Quadrant Model Exquisitely Explained With Illustrations Inspired By Vermeer: The Four Quadrant Wealth Atlas.pdf - Google Drive
Breathless Unedited AI-Bot Summary:
You can do everything “right” financially and still miss the point of retirement. We kick off with a listener who is debt free, nearing retirement, sitting on substantial retirement accounts, and backed by a pension and rental income. The question on the surface is classic DIY investing: should the equity slice rise to 45%, should yield be reinvested, and when should a risk parity style portfolio transition happen? Our answer starts with the math, then quickly moves to what the math is trying to protect.
From there, we zoom in on practical asset allocation choices that matter for real portfolios: how much long-term Treasury bond exposure is too much, why intermediate Treasuries may be redundant next to long duration bonds, and why turning off dividend reinvestment can make retirement rebalancing cleaner. We also talk value-tilted ETFs like AVGV and related Avantis funds, including how “fund of funds” products can quietly overlap with holdings you already own and make your plan harder to manage.
Next, a second listener brings an under-discussed HSA twist. HSAs often get treated like a Roth IRA, but the inheritance rules can be punishing for non-spouse heirs, turning a tax-advantaged account into a one-year tax bomb. We walk through what that means for asset location, Roth conversions, and where aggressive investing belongs if you are tempted to take big swings. We wrap with our weekly market snapshot and the April distributions across the eight sample portfolios on the Risk Parity Radio site.
If you found this helpful, share it with a friend who is close to retirement, then subscribe and leave a quick review so more DIY investors can find the show.
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In this episode we answer emails from Dave, Marcus Vindictus, and Sharon. We take a hard look at what “diversified” really means in retirement and why correlations matter more than fund count. We also talk about simplifying messy accounts, using AI to decode bad 401(k) menus, and making generosity a real part of financial independence.
And we do a fundraising update for Mary's charity, Fairfax CASA, and discuss how CASA stability changes kids’ lives in our Queen Mary segment.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Testfolio Fund Analysis: Asset Analyzer for ETFs, Stocks, and Funds | testfolio
Testfolio Portfolio Comparison: Portfolio Backtester for ETFs and Asset Allocation | testfolio
Merriman Best-in-Class ETFs: Best ETFs 2025 | Merriman Financial Education Foundation
Dave's Cool New Tool: Rebalancer
Catching Up To FI 401k Podcast: Is Your 401(k) a Mess? Do This Now (Step-by-Step Guide) | Bill & Jackie | 205
Breathless Unedited AI-Bot Summary:
A retirement portfolio can look “responsible” on paper and still blow up when you start taking withdrawals. We dig into a real listener email from a DIY investor who is close to early retirement and trying to understand why an advisor-built mix of total market stocks, dividends, international, corporate bonds, and high-yield bonds doesn’t behave like a true risk parity portfolio when markets get rough.
We walk through the core retirement investing principles we use: define the goal (including a realistic safe withdrawal rate), check correlations so you know whether you’re actually diversified, and stress test over the decades that matter like the 1970s and the early 2000s. Along the way, we explain why credit-heavy bond funds can move with stocks, why Treasury bonds tend to be the better ballast, and why adding true alternatives like gold and managed futures has historically improved drawdown control and withdrawal outcomes.
We also tackle two problems nearly every investor hits: the “robo-advisor spaghetti” account stuffed with hundreds of holdings, and the frustrating 401(k) plan menu full of overpriced or confusing funds. We share a practical shortcut for the 401(k) problem: paste the fund list into an AI tool and ask it which options are closest to an S&P 500 fund or total market index fund and which ones have the lowest fees.
You’ll also hear updates on our fundraising for Fairfax CASA plus a reminder that money is most powerful when it supports a life well lived through giving, volunteering, and legacy planning. If this helps, subscribe, share the show with a friend, and leave a rating or review.
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In this episode we answer questions from Dustin, Optimus Bill and Scott. We discuss the common mistake of chasing tickers and low fees instead of building a portfolio around goals and carefully chosen asset classes, cowbell origins, what to do with large allocations to cash equivalents and how much do you really need, and transitioning to a retirement portfolio. Hint: Search "transitioning" on the podcast page at the website for more podcasts about that.
We also review March market damage and show how diversified risk parity style portfolios hold up when stocks stumble.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
How To Do An Asset Swap Video from Risk Parity Chronicles: How to Do an Asset Swap
Afford Anything Episode #618: They Ran Out of Money. I Didn’t. Here’s Why.
Breathless Unedited AI-Bot Summary:
Zero-fee funds, shiny tickers, and “close enough” substitutions can feel like smart investing, right up until you realize they’re steering your entire asset allocation. We dig into listener questions that expose a common trap: building a portfolio around a fund you like instead of designing a plan around your goals, your time horizon, and the asset classes that actually do the work.
We break down Fidelity Zero funds through a practical lens: mutual fund vs ETF structure, tax efficiency, portability across brokerages, and how to confirm what you’re buying with tools like the Morningstar style box. We also talk plainly about expense ratios in a world where most fees are already low, and why rebalancing, diversification, and holding the intended exposures matter more than shaving a few basis points.
Then we tackle a deceptively simple question about gold. GLTR holds multiple precious metals, but gold has a unique role as a central-bank reserve asset that behaves differently from silver, platinum, and palladium. If your portfolio needs gold as an alternative currency style diversifier, you want a gold ETF, not a basket that “kind of” looks similar.
We also cover asset location and the asset swap idea for cash equivalents, how much to keep in checking for real-life spending, and when it makes sense to shift from an all-stock accumulation portfolio toward Golden Ratio or Golden Butterfly as you approach your financial independence number. Finally, we run through March performance across major assets and our sample portfolios, including a clear reminder about what leverage can do in rough markets.
If you found this helpful, subscribe, share it with a DIY investor friend, and leave a quick review so more people can find the show.
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In this episode we answer emails from Andy, John, and Todd. We discuss what "holding dollars" means, the lure of speculation on recent events, the ongoing inadequacies of 401k and 403b plans and their incentives, and small cap value vs. small cap blend. More Cowbell! Before that we trade stories from the EconoMe Conference and spotlight Fairfax CASA’s work with foster kids and our fundraising efforts.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
EconoMe Presentation on Financial Forecasting and Base Rates: F. Vasquez EconoMe 2026 Final Slides.pdf - Google Drive
Testfolio Comparison of LCV vs. LCG vs. SCV vs. SCG: testfol.io/?s=cSv9C5VxOW9
Testfolio Comparison of Golden Ratio Portfolios with Small Cap Variants: testfol.io/?s=hTcOUvd0g4J
Breathless Unedited AI-Bot Summary:
Markets get weird fast: oil shocks, war headlines, and that sickening moment when it feels like every asset in your portfolio is moving together. We dig into a question that pops up in exactly those moments: what does it actually mean when traders say they’re “holding dollars,” and is there a DIY investor version that makes sense? We walk through the mechanics behind dollar demand, why institutional cash moves don’t map neatly onto a home risk parity portfolio, and why cash timing is a low-odds game for long-term investors.
From there, we tackle the real culprit behind most bad decisions: the urge to tinker. We talk leverage, opportunistic investing, and the seductive idea that you’ll spot the perfect entry point if you just watch enough financial news. Our view stays consistent: a disciplined asset allocation, a clear rebalancing rule, and the patience to wait out uncertainty usually beat prediction. If you absolutely must scratch the itch, we discuss how some investors think about volatility tools when the VIX is elevated, and why even “smart” speculation should be capped and rules-based.
We also answer a practical retirement-plan headache: building diversified risk parity style exposure inside a 401k or 403b with limited fund menus. We explain why plan options change slowly, what kinds of “alternative investments” may show up instead, and why pushing for a self-directed brokerage window can be the most effective workaround. Finally, we close with a nerdy but important allocation question: small cap value vs small cap blend, how small cap growth can sneak in, and why index selection (CRSP vs deeper value tilts like S&P 600 value style exposure) can change what your backtest is really telling you.
Subscribe for more DIY investing clarity, share the show with a friend who keeps tinkering, and leave a quick review with your biggest portfolio question.
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In this episode we answer emails from Nicholas, Nathan and Lisa. We discuss how much gold is enough and how much is too much, why calculators disagree and the best ways to use them, and what “better” means when the future is uncertain. We also walk through a FIRE portfolio headed toward retirement and talk briefly about finding an advisor familiar with risk parity principles.
And before that, in our Queen Mary segment, we hear a Fairfax CASA story about how consistent advocacy supports kids in foster care.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Nicholas's Gold Analysis Link: Plotting withdrawal rates, drawdowns, and returns for different risk parity portfolios - Google Sheets
Testfolio Golden Backtests: testfol.io/?s=45IearFlQbV
Afford Anything Episode #618: They Ran Out of Money. I Didn’t. Here’s Why
Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive
Optimus Bill's Interview on Bigger Pockets Money: The Decumulation Strategy After Hitting Financial Independence | Bill Yount
Optimus Bill on Catching Up to FI: Founder of 'Catching Up to FI' Just Hit Financial Independence, Now What? | Bill Yount | 196
Optimus Bill's Financial Advisor: Kardinal Financial — Flat Fee & Fee-Only Financial Advisor Bryan Minogue | Madison, WI
Breathless AI-Bot Summary:
A backtest can make almost any portfolio look brilliant, especially when one tweak “wins” by a fraction of a percent. We dig into one of the most common examples: gold allocation in a risk parity portfolio. If PortfolioCharts shows 20 to 25 percent gold beating 10 to 15 percent for safe withdrawal rate, should you follow the numbers or trust your nerves? We explain where the 10 to 15 percent “sweet spot” comes from, why tiny gold slices rarely matter, and how overfitting turns a clean chart into a fragile plan.
From there we zoom out to the real skill: comparing imperfect portfolios without pretending the future will match the past. I share why you should use multiple calculators and multiple datasets, how start dates can change results, and why swapping managed futures, commodities, and gold can flip the outcome. The point is not a magic formula, it is a durable range of allocations that survives uncertainty and keeps sequence of returns risk from wrecking your retirement.
We also tackle a detailed FIRE email from a 45-year-old aiming to retire in about five years. We talk expense tracking as the foundation of retirement planning, why liquid assets matter more than net worth, and how to upgrade diversification with Treasury bonds rather than corporate-heavy bond funds. Finally, we cover inflation protection realities, including why TIPS can still drop in a rate shock and why managed futures often behave differently when inflation spikes.
If you found this useful, subscribe, share it with a friend planning retirement, and leave a review so more DIY investors can find Risk Parity Radio.
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In this episode we answer emails from Lee, Leo, Tony, and Samuel. We revel in Lee's generosity and discuss why we hold gold and treasuries, why recent performance should not drive allocation changes and common amateur investor fallacies, how to think about diversification when you invest outside the US, and how to think about correlations in a four quadrant model.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
David Stein Interview: How to Think Clearly About Money Without Obsessing Over It with David Stein | White Coat Investor
Portfolio Charts International Portfolios Analysis: What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts
Many Happy Returns Podcast with Tyler #!: Building a Bulletproof Retirement Portfolio, with Tyler from Portfolio Charts - Many Happy Returns
Many Happy Returns Podcast with Tyler #2: How to Pick Your Perfect Portfolio, with Tyler from Portfolio Charts - Many Happy Returns
Claudia Moise Paper with US Treasuries Correlation Data: Flights to Safety, Volatility Risk, and Monetary Policy by Claudia E. Moise :: SSRN
Breathless Unedited AI-Bot Summaries:
Gold is up, bonds are weird, and everyone suddenly wants to “swap something out” based on what happened last quarter. We slow that impulse down and get back to first principles: what job does each asset do in a long-term risk parity style portfolio, and what happens when you start making allocation decisions from a gut feeling about what looks overbought or hated right now?
We dig into a listener question about replacing gold inside the Golden Ratio Portfolio and explain why utilities are not a true substitute. Utilities can be useful, but they behave like stocks more than people admit, and they often carry interest-rate sensitivity that overlaps with bonds. If you want something that behaves more like gold’s diversifying role, we talk through what characteristics matter most, including low correlation to both stocks and bonds, and why managed futures is the more logical comparison. Along the way, we call out the common traps that wreck DIY portfolios: cherry-picked dates, short-term volatility panic, and the “crystal ball” mindset that quietly turns investing into trading.
For our non-US listeners, we tackle how being based in the UK or investing in pound sterling can change implementation details without changing the big picture goal. We discuss currency risk, home-country bias, why US equities still matter for global exposure, and the tough question of whether your bond ballast should be in local currency, US dollars, or a mix. Then we answer a deep question about correlations: why stock-bond correlation is not random, how it shifts across macro regimes, and why treasuries tend to deliver negative correlation when it matters most, during recessions.
We close with weekly portfolio performance across our sample portfolios and why the most disciplined move is often to do nothing.
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In this episode we answer emails from TJ, John and Optimus Bill. We discuss TJ's modified Golden Ratio portfolio and backtests, maximizing withdrawals with flexibility, ZROZ vs. TLT simulated leverage, gambling problems, intermediate accumulation to pay down a mortgage, and assorted allocations questions about mid-caps and other funds.
We also talk about our Fairfax CASA fundraiser in our Queen Mary segment and a recent Catching Up to FI presentation at the end.
Links:
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
TJ's Portfolio: testfol.io/?s=gJEgezdqVdy
Portfolio Charts Risk Parity style Accumulation Article: Minimize Your Miss – Portfolio Charts
Risk Parity Chronicles ZROZ vs. TLT Analysis: Bond Allocation Sizing - Google Sheets
Risk Parity Chronicles KBWP Article: The Search for a Low-Beta Equity Unicorn - by Justin
Catching Up to FI Presentation: Catching Up To FI Illinois/Wisconsin Meeting Presentation - YouTube
Catching Up to FI Presentation Slides: The_Risk_Parity_Mission for Catching Up To FI.pdf - Google Drive
Catching Up to FI Presentation Summary Video: Catching Up To FI Risk Parity Portfolios Meeting and Presentation.mp4 - Google Drive
Breathless Unedited AI-Bot Summary:
A listener writes from overseas with a situation that strips retirement down to the essentials: no pension, no Social Security “backup plan,” and a real need to get the portfolio right. We walk through his modified Golden Ratio style allocation using growth and value funds, small-cap value tilts, long-duration Treasury strips, gold, and alternatives like DBMF, then talk about what matters more than a pretty spreadsheet: whether you can live with the drawdowns and keep the plan steady for decades.
From there we get practical about retirement withdrawals and the assumptions hiding underneath them. We explain why a 5.5% withdrawal rate can be realistic when you pair it with flexible rules like a floor and ceiling approach, and why “inflation” is not one number that applies to everyone. If you’re living abroad, spending in another currency, or even willing to relocate, your personal inflation experience can diverge from CPI, which changes how you should think about risk, resilience, and what flexibility is worth.
We also tackle the investor temptations that never seem to go away: debating ZROZ versus TLT, obsessing over duration ratios, and tinkering with allocations when the market gets loud. We share a simple constraint that helps many DIY investors stay sane: build a small sandbox for experiments so your core portfolio stays intact. We finish with an intermediate accumulation question about investing toward a future mortgage payoff, plus a clear framework for why splitting short and long Treasurys can be useful, and why international diversification often shows up as currency exposure in modern markets. Subscribe, share this with a friend who’s rebuilding their portfolio, and leave a review with the withdrawal rate question you’re trying to answer.
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In this episode we answer emails from Optimus Bill, Mark and Ryan. We discuss donor advised fund sponsor Daffy and a strips fund portfolio substitution, the challenges of figuring out accumulation without getting caught up in chasing shiny objects and magic investing buttons, and discuss commercial risk parity funds and why they probably won't work for your goals. Errata: I said "Mark" when I meant "Michael" Mauboussin.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Father McKenna Center Donation Page: Donate - Father McKenna Center
Catching Up To FI Podcast with Daffy: A Donor-Advised Fund For You (Daffy): Democratizing Philanthropy for Everyone | Adam Nash | 200
White Coat Investor Article: 150 Investment Portfolio Examples | White Coat Investor
Infinite Loops Podcast with Jim O'Shaughnessy and Cliff Asness: Surviving the Meme Stock Bubble | Cliff Asness
ETF Slop Video: The Rise of ETF Slop
Sample Portfolio Idea for Mark: https://testfol.io/?s=flOaQQOXaH4
Breathless Unedited AI-Bot Summary:
A community gift turns into a movement: we celebrate more than $13,000 raised for Fairfax CASA and announce a surprise $20,000 match, then open the books on how donor-advised funds make generosity simpler, cheaper, and more strategic. From flat-fee platforms to custom portfolios and social giving, we share how to build a micro-foundation that aligns your values with long-term impact.
Then we zoom out to the decisions that actually move the needle. Forget the hunt for a magic fund—macro allocation drives results. For savers 20-plus years from retirement, we unpack a clean, high-conviction approach: 100% equities with a two-fund core that pairs large-cap growth with small-cap value for balanced offense. We explain why investors underperform their own holdings, how to avoid shiny-object drift, and the simple rules that keep compounding on track.
Curious about adding more “oomph” without reckless leverage? We walk through using Treasury Strips like ZROZ to amplify bond duration and free space for equities or gold. We also answer a big question: do risk parity ETFs solve the problem? They exist, but most are built for elegant theory, not your actual goals—be it maximum accumulation or higher safe withdrawal rates. For families who want one-ticket simplicity, we highlight how long-standing workhorses like Vanguard Wellington or Wellesley can deliver steady spending without complex overlays or buckets.
We close with a brisk market recap, why alternatives like managed futures can shine during turbulence, and the habit that consistently wins: do nothing when your plan is sound.
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In this episode we answer emails from Connor, Zachary and Brian. We discuss fund selection, doing the Big Law dance, portfolio construction basics and analyzing alternatives, and a partial retirement drawdown scenario involving early withdrawals, avoiding temptations to market time based on recent performances and funding a vacation property with a dedicated portfolio.
But first we thank donors supporting Fairfax CASA and share Jillian Johnsrud’s moving story about adoption, foster care, and how a steadfast CASA changed her kids’ lives.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Father McKenna Center Donation Page: Donate - Father McKenna Center
"Retire Often" by Jillian Johnsrud: Book | Retire Often
Bridgewater Paper Describing the Four Quadrant Model: Microsoft Word - 2009.12 AW Info Pack.doc
Blog Article Describing Risk Parity Principles and the Four Quadrant Model: 15 Uncorrelated Assets | SSiS
Video Describing Correlations of Alternatives (start timestamp 1:10): iMGP DBi Managed Futures Strategy ETF Update with Andrew Beer | January 2026
Breathless AI-Bot Summary:
A single constant can change a child’s life. That’s the heart of Jillian Johnsrud’s adoption and CASA story, where a determined CASA volunteer carried the full thread of her kids’ journey through seven case managers and years of upheaval. We open with gratitude for Fairfax CASA donors and a candid look at what Court Appointed Special Advocates really do: show up, remember, advocate, and persist in an unreasonably hard job that needs every ounce of support we can give.
From there we pivot to the questions you care about. We unpack why SCHG works fine as a large cap growth sleeve and then dive into a pragmatic guide to risk parity. Using a four-quadrant map of growth and inflation, we explain how to pair equities with long-term Treasuries, gold, and managed futures to raise safe withdrawal rates without pretending to predict the future. You’ll hear how uncorrelated return streams and disciplined rebalancing—Shannon’s Demon in action—turn volatility into a feature, not a bug. We also draw a bright line between true diversifiers and crowded “alts” that secretly track stocks.
We get tactical: how to treat accounts as one portfolio while keeping extra liquidity in taxable during a low-stress, lower-income phase; when to tax-gain harvest; and why tilting heavily into whatever just outperformed (gold now, bonds avoided) is classic recency bias. For those juggling work and life pivots, Frank shares hard-won Big Law advice: build stamina, communicate clearly, be relentlessly reliable, and stay curious as practice areas shift. Finally, we brainstorm a small, dedicated portfolio to fund a shared family vacation home, and why this sandbox is perfect for testing a slightly higher equity mix you can always top up.
If this resonates, help us amplify the work of Fairfax CASA, then subscribe, share the episode with a friend who’s rethinking their allocation, and leave a quick review so more DIY investors can find the show. Your support keeps the conversation smart, practical, and focused on what actually works.
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In this episode we answer emails from Jeffrey, Bryan, and Erik. We discuss the trade-offs of direct indexing in small cap value, why modest leverage on a diversified mix can outperform stock-heavy portfolios with fewer drawdowns, and modelling an early extra spending plan for retirement. And talk about forecasting with Base Rates.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Father McKenna Center Donation Page: Donate - Father McKenna Center
Bigger Pockets Money Small Cap Value Discussion: Small Cap Value Funds for FI: Why AVUV?
Bryan's Risk Parity Explainer Videos: Kardinal Financial - YouTube
Bryan's Leveraged Golden Ratio Portfolios: testfol.io/?s=jXswQKw6avr
RSST and GDE Comparisons: testfol.io/?s=dc0nz7avynF
Ben Felix Video On Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)
Erin on Money Truth About Spending Smirk and LTC: The Retirement Spending Smile Is Dead (Here’s What the Data Actually Shows)
Breathless Unedited AI-Bot Summary:
Markets don’t hand out easy wins, so we lean into clarity: what actually works for DIY investors, what’s noise, and how to make choices you’ll stick with when regimes shift. We start with a pointed look at direct indexing in small cap value. The promise of tax loss harvesting sounds great, but the reality is messy: hundreds to thousands of tiny positions, frequent graduations at index cutoffs, and “optimized” portfolios designed to hug an index rather than truly replicate it. We break down why small cap value behaves more like equal weight, why that raises the bar for tracking and taxes, and where direct indexing makes more sense—large caps, cap-weighted sectors, and places where a handful of names dominate the exposure.
From there, we unpack a smarter use of risk: applying modest leverage to a diversified portfolio instead of dropping diversifiers to chase higher returns. Think of it as scaling a better mix rather than concentrating into stocks. We compare tools like NTSX, GDE, GOVZ, and managed futures, and discuss why the 1.25x to 1.7x range often hits the sweet spot for return per unit of pain. We also stress-test composite ETFs against DIY equivalents for transparency and control. The goal is a higher Sharpe ratio and fewer bone-crushing drawdowns, not bravado.
Planning meets practice when we tackle a common early-retirement question: how to model a 10,000-dollar travel burst for the first decade. The simplest answer is often best—set aside 100,000 dollars and spend it down—or use a Monte Carlo tool that handles time-varying cash flows. Keep three to five years in cash, refill from gains, and let base rates guide expectations. Research shows a spending bump near retirement and a gentle decline afterward for most households, with far fewer late-life spikes than fear-based sales pitches suggest.
We close with portfolio reviews across eight sample allocations, highlighting how gold, commodities, and managed futures have led while mega-cap tech cooled and small cap value caught a bid.
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In this episode we respond to emails from Nick, Ginna, Ashley, Chris and Sara. In our Queen Mary segment where we are raising money for Fairfax CASA, we express our gratitude for the outpouring of listener support and tell Noah and Taylor’s story of reunification. We then dive into two big portfolio questions: do managed futures replace gold, and how to fund an eight-year break without derailing long-term plans. We build a conservative drawdown portfolio, weigh taxes in taxable accounts, and explain why good portfolio construction beats market timing.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
Wilka's in NYC: Wilka's Sports Bar | Women's Sports Bar | New York, NY, USA
Chris's Portfolio Constructions: testfol.io/?s=lwnOaJGvzDj
Sara's Portfolio Analyses: testfol.io/?s=htNZVoZOZn4
Breathless Unedited AI-Bot Summary:
Start with purpose: a child’s safety, a mother’s grit, and a community that shows up. We open with a moving Fairfax CASA story—Noah and Taylor—that reminds us why steady advocacy and second chances matter. Listener donations pour in, and Mary shares how CASA pairs rigorous oversight with real compassion. From there, we pivot to the other kind of safety net: portfolios designed to fund real lives.
A longtime listener asks if managed futures make gold redundant. We break down what trend-following actually captures, why gold’s long history and different crisis behavior still earn it a seat, and how the two hedges fit together when you care about drawdowns, not bragging rights. Then we tackle Sarah’s bold plan: an eight-year pause from work to care for family, spending about $90k per year from taxable savings before returning to the workforce. Rather than a classic risk-parity blend, we map a more conservative drawdown portfolio: roughly 30% equities with a large-cap value tilt and a sleeve of property-and-casualty insurers, 25% cash and short-term Treasuries for three years of runway, 25% intermediate Treasuries for recession insurance, and 20% in alternatives split between gold and managed futures. The goal isn’t to win a backtest—it’s to keep maximum drawdowns shallow and flexibility high.
We also unpack taxes in the 0% capital gains band, why ordinary-income assets aren’t the villain during low-income years, and how realizing gains strategically can preserve ACA subsidies. For long-horizon IRAs, we keep it simple: a 100% equity mix across large-cap growth or blend and small-cap value, with an optional tilt to international small-cap value for broader diversification. No crystal balls, no heroic timing—just construction that respects time frames and human needs.
If this episode helps you think differently about money, advocacy, or how to buy time for what matters, share it with a friend, subscribe, and leave a quick review so more DIY investors can find it.
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In this episode we answer emails from Tim, Anderson, and Pete. We discuss using a Golden Butterfly portfolio for intermediate accumulation, converting 529s to Roths and excessively levered portfolios for small children. (I can't make this stuff up.)
But first we share Mary’s mission with Fairfax CASA and explain how steady advocacy changes a child’s path, and roll out our Fairfax CASA fundraising campaign in connection with National Child Abuse Prevention Month.
Links:
Fairfax CASA Donation Page: Donate - Fairfax CASA
The Starfish Thrower Philosophy from Episode 441 (Cool New Video!): The Starfish Thrower Philosophy With Mary.mp4 - Google Drive
Mary's CASA Case Adoption Story: The Johnson’s Foster Care & Adoption Story
FIRE Takes Podcast: FIRE Takes Podcast
Portfolio Charts Drawdown Calculator: Drawdowns – Portfolio Charts
Testfolio Backtester: testfol.io
Pete's Leveraged Leeroy Jenkins Portfolios: testfol.io/?s=l7aMOsy4720
Breathless Unedited AI-Bot Summary:
Ever wonder how to save for a goal that’s a few years away without riding stock-market whiplash or leaving too much on the table in cash? We walk through a practical, risk-aware path for mid-term savings and pair it with something close to our hearts: Mary’s work with Fairfax CASA, where trained volunteers are a constant for kids navigating abuse or neglect cases. You’ll hear what CASA volunteers actually do—attend hearings, coordinate services, write court reports, and keep showing up—plus the data that proves consistent advocacy moves outcomes.
From there, we dig into building an intermediate-term portfolio using a risk parity approach like the Golden Butterfly. We explain how to model a real alternative to HYSAs: use long-history T-bill data instead of SHY, add regular monthly contributions to reflect real life, and examine drawdown length and worst-case windows over three to five-year spans. You’ll learn why shorter, shallower drawdowns can matter more than headline returns when timing is uncertain, and how Testfolio helps you compare paths with clarity. We also unpack a powerful planning angle: rolling leftover 529 funds to a Roth IRA under current rules, including holding periods, beneficiary considerations, earned income needs, and why Roth contribution capacity is too valuable to waste.
We don’t shy away from the spicy stuff either—managed futures, leverage, and the gap between theory and practice. Rather than letting fear set the rules, we talk about small, controlled experiments that build skill and confidence. That shift—from anxiety to informed action—can change both your portfolio and your peace of mind.
If this resonates, support Fairfax CASA via the link in the show notes and mention Risk Parity Radio or Mary Vasquez in the comment box. Then hit follow, share the episode with a friend who’s stuck between stocks and savings, and leave a quick review to help more DIY investors find us.
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In this episode we answer email Serge, Nielsen, Paul and Loren. We dig into the core question that drives every portfolio -- when will this money be spent and by whom -- which dictates how it should be invested, and talk about the website, ETPs and their variations, and thinking about sabbaticals and Coast FI. We also mention our Risk Parity Radio gathering at EconoMe on Friday at the Celare Hotel.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
The New(ish) Web Page: Risk Parity Radio
Retire Often Book: Retire Often | Create a meaningful and enjoyable life
Breathless Unedited AI-Bot Summary:
What is this money actually for—and when will it be used? We build from that deceptively simple question to map two clear paths: an equity-heavy accumulation approach for wealth you won’t touch for decades, and a diversified, endowment-inspired design for money you plan to spend or share in the near term. Along the way, we unpack revealed preferences, why giving while living can outperform hoarding for family outcomes, and how to convert volatility into usable cash flow with risk parity principles.
We share practical playbooks for different life chapters. If you’re sitting on a seven-figure portfolio and dreaming of a sabbatical, hold 1–2 years of cash and let the rest compound in accumulation mode. If you’re leaning toward Coast FI, keep retirement assets in equities while your current work covers life today. If you aim to fund 4–5 percent distributions to family or philanthropy, build a portfolio with multiple return drivers—equities for growth, Treasuries for crisis defense, gold and commodities for inflation, and managed futures for trend resilience—plus disciplined rebalancing to support withdrawals through market cycles.
We also clear up product confusion: GLD lives under the broader ETP umbrella while functioning like an ETF to most users—structure matters for risks and taxes, so read the prospectus and know what you own. To ground it all, we review the latest market moves—small-cap value strength, gold’s lead, managed futures momentum—and walk through sample portfolios, including rebalancing thresholds and what’s working now. Ready to align your portfolio with your real timeline and purpose? Hit play, subscribe for more smart, research-backed investing talk, and leave a review to help others find the show.
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In this episode we answer questions from Ben, Todd, and Tom. We discuss how managed futures differ from momentum, differentiating Monte Carlo simulations and why you need to be careful with parameterized simulations, and flexible withdrawal strategies generally and applied to the sample portfolios.
LInks:
QMOM and DBMF comparison and correlations: testfol.io/analysis?s=5lCK1KCsAsx
Morningstar 2025 State of Retirement Income Report: Morningstar State_of_Retirement_Income_2025.pdf - Google Drive
Portfolio Charts Annual Returns Calculator: Annual Returns – Portfolio Charts
Stress Test Comparisons (Golden Butterfly, Golden Ratio, 60/40 and Three Fund Portfolios) Starting in 2000 with 5% withdrawal rate and CPI Inflation: testfol.io/?s=7jwHMS4FogB
Breathless Unedited AI-Bot Summary:
Ever wondered why a momentum stock fund and a managed futures fund can look similar on the surface yet behave like opposites when markets lurch? We dig into the real differences between equity momentum strategies like QMOM and multi-asset trend programs like DBMF, explaining how managed futures trade across stocks, bonds, commodities, and currencies with the ability to go long and short. That breadth—and the discipline to follow trends over weeks to a year—creates low correlation to traditional portfolios and turns macro chaos into potential opportunity.
From there, we tackle the Monte Carlo confusion that trips up even seasoned planners. We compare historical shuffles that preserve real-world co-movements with parameterized simulations that assume normal distributions and independence—two assumptions markets love to break. You’ll hear why fat tails matter, how “impossible” scenarios sneak into naïve models, and where to find usable inputs without double-counting inflation. We also share a simple framework: use multiple calculators, add historical stress tests starting in rough windows like 1968 or 2000, and look for consistent results across tools before you trust any forecast.
Finally, we turn to retirement withdrawals and the habits that actually hold up. Instead of rigid CPI bumps, we walk through constant-percentage withdrawals, guardrails, and the reality that retiree spending tends to run at CPI minus 1–2 percent outside healthcare. We highlight how flexible rules can raise sustainable withdrawal rates and why resilient portfolio design—think Golden Butterfly or Golden Ratio—can outperform a classic 60/40 under severe sequences. If you’re ready to upgrade your plan with better diversification, better testing, and smarter spending rules, you’ll leave with practical steps you can apply today.
Enjoyed the conversation? Subscribe, leave a review, and share this episode with a friend who’s serious about building a portfolio that survives bad markets. What testing change will you make this week?
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In this episode we answer emails from Sebastian, Mark, and James. We discuss the purpose of treasury bond allocations, annuity cash flows, and where rentals fit, goofy accounting for taxes, a bridge to social security and answer questions about Testfolio and data sources. And celebrate Catherine O'hara.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Charts Article re Accumulation in an RP-style Portfolio: Minimize Your Miss – Portfolio Charts
Immediate Annuities: Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com
Portfolio Charts Data Sources Page: Data Sources – Portfolio Charts
Breathless Unedited AI-Bot Summary
Markets threw a curveball this week: gold ripped, then slipped; small cap value popped; long bonds mostly yawned. We use the noise as a lesson in clarity—every asset in a risk parity mix has a job. Treasuries aren’t for yield; they’re for recession insurance and rebalancing power when stocks sag. Gold, managed futures, and value are there to diversify return drivers so you’re not betting your future on a single story.
We dig into a listener’s Golden Ratio allocation with annuitized payouts and single-family rentals. The key is classification. Treat rentals as income if you’re keeping them, or as a future lump sum if you plan to sell—but don’t try to count both the cash flow and the equity for rebalancing. We also tackle the “can I replace treasuries with X?” question, and explain why the only valid substitute must reliably rise when recessions hit. If it won’t go up when growth falls, it isn’t doing the bond job.
From there, we clean up two planning snags that trip up even seasoned DIY investors. First, the tax myth: don’t “tax-adjust” asset values across accounts. Taxes are expenses, not asset haircuts. Optimize location, model annual tax liabilities, and keep the allocation true on the asset side. Second, Social Security modeling: the most practical move is to add it as an inflation-indexed future cash flow in a robust planner. If you need a present value for net worth, price a comparable inflation-adjusted deferred annuity instead of guessing with discount rates. For bridging years before benefits start, a TIPS ladder can unlock higher, earlier spending without warping your core portfolio.
We wrap with a clear performance snapshot and withdrawals across eight sample portfolios, from the classic Golden Butterfly and Golden Ratio to levered experiments and a return-stacked build. The thread through it all is discipline: know each asset’s purpose, keep cash intentional, rebalance when markets hand you spread, and let validated data—not hunches—drive decisions.
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In this episode we answer emails from Gregory, Rick and Graham. We discuss some more amateur ideas on gold and cash buffers, and modeling managed futures, and we explain why costs and liquidity often matter more than the story you’re told. We share tools, back-tests, and resources that help DIY investors build smarter, calmer portfolios.
Graham's "Fall Back" instructions for inputs for Testfolio: "For example, since you typically use DBMF but would want to back test further, one can write DBMFSIM?FB=KMLMSIM which will use DBMF as far back as it can, then fall back to using KMLM. Did you know these can be chained? One can fallback onto commodities beyond the KMLM simulation, like this: DBMFSIM?FB=KMLMSIM?FB=GSGSIM."
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Three Ingredients: Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts
Video on Hedge Fund Market Wizards: Jack Schwager presents: 15 Hedge Fund Market Wizards trading secrets & insights in their own words
Infinite Loops Podcast with Cliff Asness: Surviving the Meme Stock Bubble | Cliff Asness
Damodaran 2026 Critiques of CAPE Ratios: Aswath Damodaran 2026 Critiques of CAPE Ratios.pdf - Google Drive
Managed Futures/Trend Following Paper for Download: A Century of Evidence on Trend-Following Investing
Graham's Full House Portfolio: testfol.io/?s=5cyAAHgo1OH
Breathless Unedited AI-Bot Summary:
What if the biggest edge in your portfolio isn’t a hot strategy but the boring details—costs, liquidity, and the ability to rebalance in seconds? We dig into listener questions on gold, long-term treasuries, cash buffers, and managed futures, and we separate evidence from stories that sound good but quietly erode returns. We look at why an 80 percent stocks and 20 percent gold mix can be fine during accumulation, yet struggle in retiree withdrawals when stocks and gold sometimes fall together. Then we explain how duration from long treasuries can change the drawdown math, especially in recessions.
We also push back on the temptation to chase yield on vaulted physical gold. Once you add spreads, storage, transaction fees, and redemption friction, that “yield” comes at a cost, and you sacrifice the instant liquidity your rebalancing plan needs. Gold ETFs give you precise position sizing and near-zero friction so you can trim, add, and move on. On cash, we keep it blunt: a small buffer for bills makes sense, but large multi-year cash cushions drag safe withdrawal rates over time. Replenish cash by trimming whichever asset has run hot—simple rules, fewer regrets.
For listeners trying to model managed futures, we cover why commodity funds are poor proxies and how to use Testfolio’s fallback feature to extend DBMF or KMLM backtests across regimes. The larger message is pragmatic: stop searching for the perfect allocation and build a naively diversified mix that can handle growth, inflation, and shocks without prediction. Want to see how this plays out? Hit play, take notes, and test a small, real-money experiment in a side account to learn your own behavior.
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In this episode we answer emails from Isaiah and Mike. We unpack how metrics hijack meaning and show how a diversified, risk-parity approach lets you thrive without chasing perfect scores, review our business model and help Mike tweak his portfolio selections.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
"The Score" Video Summary: The Score Summary Video.mp4 - Google Drive
"The Score" Slideshow: The Score Summary Slideshow.pdf - Google Drive
How To Do An Asset Swap Video from Risk Parity Chronicles: How to Do an Asset Swap
Breathless AI-Bot Summary:
Numbers promise clarity. But when scores start steering our choices, we trade meaning for metrics—and investing gets harder, not easier. We take you inside a listener-recommended book on gamification and value capture, then connect its insights to practical retirement planning, rebalancing discipline, and the craft of building portfolios that can handle ambiguity.
First, we break down a simple framework to resist metric addiction: practice metric mindfulness, guard “opaque” spaces where you don’t track every moment, and treat numbers as disposable tools. That shift matters for health, career, and especially money. Chasing precision in complex markets leads to false confidence and needless anxiety; aiming for ballparks and using satisficing rules keeps you steady.
From there, we dive into performance and positioning. While large growth stalls, small cap value, gold, commodities, and managed futures are pulling their weight. We share how diversified, risk-parity style allocations harness those uncorrelated trends without prediction—and why selling strength into rebalancing is the quiet edge that compounds over time. You’ll also hear clear, practical guidance on tax location and cash: put growth in Roth accounts, anchor bonds in tax-deferred space, keep cash lean if you have flexible liquidity, and rebalance across accounts at the household level.
Underneath the tickers is a broader life stance. Money, power, and fame are easy to count and easy to chase. Relationships, time autonomy, and meaningful work resist scoring yet deliver the lasting returns. Let numbers serve your purpose, not replace it. If you’re ready to think beyond dashboards and build a portfolio—and a life—built for uncertainty, you’ll feel right at home.
Enjoy the conversation? Follow the show, leave a review, and share it with a friend who needs a saner way to invest.
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In this episode we read a lengthy email missive from our good friend Dr. Bill on reaching financial independence a few years early, designing a risk parity portfolio with an advisor, and facing the emotional fog that follows. We share how to replace optimization with intention and use time, not money, as the measure of value, and touch on these points:
• hitting FI earlier than planned after high savings, growth and a modest windfall
• shifting from global cap weight to risk parity for steadier withdrawals
• choosing fee‑for‑service advice and aligning incentives
• handling FI emotions, identity shifts and one‑more‑year urges
• using four idols as red flags for decisions
• buying happiness through relationships, experiences, time‑buying and generosity
• satisficing small choices to protect energy and attention
• building post‑career structure with short chapters and yearly subtractions
• treating time as the scarce currency, not money
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Dr. Bill's Interview on Bigger Pockets Money: The Decumulation Strategy After Hitting Financial Independence | Bill Yount
Kardinal Financial: Kardinal Financial — Flat Fee & Fee-Only Financial Advisor Bryan Minogue | Madison, WI
Afford Anything Episode #618: They Ran Out of Money. I Didn’t. Here’s Why.
Breathless Unedited AI-Bot Summary:
The number hits, the accounts say you’re free, and yet the feeling isn’t triumph—it’s fog. We dive into that messy, honest space after financial independence with a candid letter from Dr. Bill, a late starter who reached FI years ahead of schedule. His story opens the door to two challenges at once: how to build a portfolio that steadies withdrawals in uncertain markets, and how to build a life that isn’t ruled by “one more year.”
We start with the money. Risk parity isn’t a magic trick, but it’s a powerful framework for retirees and late starters: diversify by risk, not headlines, so stocks, bonds, and real assets share the load. That balance can dampen drawdowns and reduce sequence risk when you’re finally taking income. We highlight why fee‑for‑service advice beats legacy models, what to expect from a thoughtful plan, and how to avoid turning markets into a source of constant anxiety. Sleep matters as much as return.
Then we face the human side: identity, purpose, and the gravitational pull of more. Using a simple lens—avoid the four idols of money, power, fame, and unhealthy pleasure—we redirect focus to the only currency that compounds after FI: time. We break down practical ways wealth buys happiness through relationships, experiences that spark flow, time‑buying that deletes chores and commutes, and generosity that deepens community. You’ll hear tactical rules to cut over‑optimization, pilot a lighter work schedule, structure short chapters instead of a rigid life plan, and run annual “stop doing” audits to keep your days aligned with what matters.
If you’re nearing FI, newly independent, or stuck in the fog, this conversation offers a clear path forward: design a portfolio for resilience, and design a life for meaning. Subscribe, share with a friend who’s wrestling with “enough,” and leave a review to help more DIY investors find a saner way to retire on purpose.
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In this episode we answer emails from Gregory and Isaiah. We discuss whether tail-hedged ETFs belong in a retirement portfolio, then map out a cleaner path with Treasuries as recession insurance, a value tilt for equity resilience. We also discuss the problems with relying on voices from popular personal finance unless they are well supported by professional and academic teachings, and the importance of the four quadrant model in understanding correlations and diversification. We also a practical taxonomy for classifying holdings.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Links Page at Risk Parity Radio: Links | Risk Parity Radio
Analysis of Tail Risk ETFs: testfol.io/analysis?s=jCSSoT7bFRe
Bob Elliot Macro Masterclass: Bob Elliott, Unlimited Funds – A Macro Masterclass
Bob Elliot on Excess Returns: Understanding Economic Cycles | Bob Elliott
"Best of" Bob Elliot on Excess Returns: Markets Always Return to Economic Reality | Bob Elliott Explains How It Happens
Bob Elliot on The Compound: The Blue Chips of Junk | TCAF 175
Portfolio Tracker: GitHub - danbuchal/portfolio-tracker: Portfolio Tracker: Track your investments and asset allocation
Breathless Unedited AI-Bot Summary:
Looking for protection without sacrificing long-term returns? We dig into a donor’s question about using tail-hedged ETFs like SPD and SPYC for early retirement and explain why constant hedging tends to bleed performance. The core idea is simple: prioritize assets with positive expected returns that also diversify when it matters. That’s where long-term Treasuries serve as recession insurance and why picking the right time horizon for correlation analysis changes everything.
From there, we zoom out to the four-quadrant framework—growth and inflation as the axes that drive correlations. Stocks thrive in positive growth with moderate inflation, Treasuries support you in weak growth and disinflation, and assets like gold and managed futures help when inflation shifts. If passive flows are reshaping markets, the practical antidote isn’t a new product; it’s a value tilt on the equity side. History shows value, especially small-cap value, is a reliable counterweight when growth-heavy indexes crack.
We also share a clear, DIY method to audit and classify your holdings ahead of retirement. Start with growth vs value as your primary lens, use size as a secondary tilt, and treat international exposure as tertiary since currency swings drive much of the variance. Tools like Morningstar and Portfolio Tracker make it easy to roll up accounts, view factor exposure, and keep your targets on track. Finally, we walk through our sample portfolios and a crisp market snapshot—gold’s strength, steady REITs and commodities, and how leveraged mixes are faring—to show how these principles play out in real allocations.
If this helps you build a stronger plan, follow the show, share it with a friend who’s rethinking their hedge, and leave a quick review to help more DIY investors find us.
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In this episode we answer emails from Bee, Brian, and Derek. We discuss shifting from pure equities toward a Golden Ratio allocation at 60% of the way to financial independence, using 401(k) BrokerageLink to add small cap value, and replacing monthly performance screenshots with better backtesting tools. Along the way, we talk donor-advised funds, advisor incentives, and why most financial advisory practices run on fear because its the most profitable business model.
Links:
Portfolio Charts Article: Minimize Your Miss – Portfolio Charts
Sonia Parker on Crystal Balls: Crystal ball gazing, how to use a Crystal Ball ~ How to Scry with a Crystal Ball ~ by Sonia Parker
Jim Sandidge Chaos Paper: RMJ081-ChaosAndRetirementSecurity.pdf
Breathless Unedited AI-Bot Summary:
Tired of being told to fear the market, fear retirement, and fear doing it yourself? We dig into three real listener scenarios to show how clarity, incentives, and modern tools beat sales scripts every time. First, we sit with a 41-year-old investor who’s 60% to a FIRE number and wrestling with whether to add risk-parity elements now or stick with 100% equities a bit longer. We break down how a gradual shift toward a Golden Ratio–style mix can reduce volatility without forcing a hard “all-at-once” pivot, and why matching your allocation to your timeline, taxes, and temperament matters more than waxing theoretical about the perfect moment.
Next, we explore the power of Fidelity’s BrokerageLink and the case for a structural small cap value tilt. If costs are minimal, opening the 401(k) architecture unlocks better ETFs and truer diversification. A large growth and small value balance can set you up for meaningful rebalancing, while keeping income-heavy assets in tax-advantaged accounts avoids unnecessary drag. We also spotlight donor-advised funds as a practical way to give appreciated shares, lower taxes, and simplify charitable plans—especially helpful during high-income years or advisor breakups.
Finally, we question the industry’s incentive structure and the fear-based marketing behind complex portfolios, annuity pitches, and “risk profiles” designed to sell products. Instead of monthly performance screenshots that can mislead when withdrawal rates vary, we point you to TestFolio and Portfolio Visualizer to run clean, apples-to-apples comparisons. Five years of live results won’t settle lifetime decisions; full cycles and solid process will. If you want a portfolio that’s low-cost, transparent, and built to last—without crystal balls or steak-dinner seminars—this conversation lays out the path. If this helped you think clearer about your allocation, subscribe, leave a review, and share it with a friend who’s ready to keep more of their own returns.
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In this episode we answer emails from Jeff, Chad and Matt. We discuss choices in 100% equity accumulation portfolios, distribution methodology for the sample portfolios, more on radio-personalities-cum-financial-advisors who try to punch down, the landscape of financial advisors and distinguishing the good, the bad, and the ugly, and our overall approach here, which is simply to match financial behaviors with financial goals. Because Personal Finance is FINANCE.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Links:
Best Equity Index ETFs: Best ETFs 2025 | Merriman Financial Education Foundation
Sarah Catherine Gutierrez Presentations: Interacting with the Financial Services Industry with SC Gutierrez
Afford Anything Podcast re RPR: They Ran Out of Money. I Didn’t. Here’s Why.
Breathless Unedited AI-Bot Summary:
What if your portfolio actually reflected your real goal—spend confidently while you’re alive—or, if you prefer, maximize what you leave behind? We dig into that choice and show how to align behavior with outcomes, from accumulation tilts to retirement withdrawals, without getting trapped by complexity or fear.
We start by tackling a common accumulator snag: limited 401(k) menus. When a plan doesn’t offer the exact funds for a 50% large-cap growth and 50% small-cap value tilt, we show how to keep the core in a low-cost total market index and use outside accounts for precise small-cap value exposure. The final 10%? It’s often a coin flip—simplicity and consistency usually win. We also compare small-cap value options and why funds with profitability screens (like AVUV) can sharpen the tilt.
For retirees and near-retirees, we lay out a clean distribution method. Use cash generated by the portfolio first; if you must sell, trim the position most above target since the last rebalance. Prefer even fewer trades? Hold a modest cash sleeve and draw from it, replenishing during scheduled rebalances. The aim is to reduce friction while keeping allocations on track. Throughout, we push for strategies that raise safe withdrawal rates, not stories that only soothe nerves.
We also hold a bright light on advisor incentives. AUM fees aren’t “evil,” but they’re misaligned with consumer interests and compound against your long-term outcomes. Fee-only, flat-fee, or hourly planning models provide clarity and control without the drag. Our stance is simple: demand the math, insist on base rates, and ask every product or tweak one question—does this increase sustainable spending power?
The market check brings it all together: small-cap value is out front, gold remains a steady diversifier, and diversified sleeves like managed futures, REITs, and Treasuries contribute ballast. We walk through the eight sample portfolios, highlight performance since 2020 and 2024 inceptions, and note why mechanical year-end rebalancing can backfire when flows get weird. If you’re a do-it-yourself investor who values low costs, clarity, and evidence over noise, you’ll find practical steps you can use today.
If this resonates, follow the show, leave a review, and share it with someone who needs more signal and less sales pitch.
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In this episode we answer emails from Midwest Nice, Ron and Stefan. We discuss helping a cautious parent with a high-fee advisor, what services are actually worth paying for in their case, how to invest home-sale proceeds for a 5–10 year horizon, where to learn beyond basic indexing without losing the plot, the McKenna Man portfolio, and best approaches to try to beat the market (beyond don't try).
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Excess Returns Channel: Excess Returns - YouTube
Tacoma Narrows Bridge Collapse Video: Tacoma Bridge Collapse: The Wobbliest Bridge in the World? (1940) | British Pathé
Stefan's Sparkline Capital Article: Buffett's Intangible Moats
Ben Felix Video On Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)
Book List:
Ashvin Chhabra: "The Aspirational Investor"
J. David Stein: "Money For The Rest of Us"
Michael Mauboussin: "More Than You Know" and "Think Twice"
Antti Ilmanen: "Expected Returns" and "Investing Amid Low Expected Returns"
Andrew Lo: "In Pursuit of the Perfect Portfolio"
Ed Thorpe: "A Man For All Markets"
Larry Swedroe: "Your Complete Guide to Factor Investing"
Breathless Unedited AI-Bot Summary:
Ever tried to help a parent who’s financially fine but glued to a “nice” advisor and a vague plan? We dig into the real-world tactics that preserve relationships while improving outcomes—think gentle on-ramps like scam protection, account alerts, and sharing your own planning choices. The goal isn’t to win a debate; it’s to earn access, reduce avoidable taxes, and align risk with comfort, especially when pensions and Social Security already cover spending.
From there, we get specific about value. If an advisor stays, the highest-return work for many retirees is tax strategy, asset location, and simplification—not performance theater. We talk practical setups like Wellington or Wellesley for low-cost balance, when a deferred QLAC can be a comfort hedge, and why generating more income than you need can backfire at tax time. For listeners sitting on house-sale proceeds with a 5–10 year window, we unpack why hoarding cash invites erosion and why a golden ratio–style mix can cap drawdowns to a few years while keeping growth and inflation resilience alive.
Curious investors also get a roadmap for learning beyond slogans. We highlight factor tilts with quality screens, institutional-grade thinkers like Ilmanen, Lo, and Mauboussin, and the simple truth that outperformance usually comes from concentration or leverage—so position sizing and behavior matter more than hot takes. We challenge the myth that a cap-weight index buys the “whole economy,” and we favor building like engineers: learn from failures, control volatility, and design for the stress you’ll actually feel.
If this helped you rethink fees, timelines, or tilts, follow the show, share it with a friend, and leave a quick review so more DIY investors can find these tools.
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In this episode we conduct our annual portfolio reviews of our eight sample portfolios you can find at Portfolios | Risk Parity Radio, and compare them with commercial alternatives. We discuss why factors beat geography, and explain how gold, bonds, and managed futures improved results and withdrawal durability.
We also confront the real roadblock to a good retirement: underspending driven by identity and fear, which we heard about in 2025 from Bill Bengen, Michael Kitces and Carl Richards, Morgan Housel and David Bach, among others.
Breathless Unedited AI-Bot Summary:
The biggest retirement risk most prepared savers face isn’t market volatility—it’s not spending enough. We dig into why identity and fear keep people stuck in “I am a saver” mode, and how to break that habit with a portfolio built for higher, safer withdrawals. Then we open the books on eight sample portfolios and share what actually worked in 2025: factor-driven international exposure, a powerful year for gold, the yield curve’s shift favoring intermediate bonds, and a split decision for managed futures where DBMF led.
You’ll hear how the Golden Butterfly and Golden Ratio outperformed classic 60/40 approaches by leaning on uncorrelated return drivers, and why DIY risk parity designs can match or beat commercial funds at lower cost. We walk through the conservative All Seasons mix, the diversified Risk Parity Ultimate, and two leverage case studies: one that shows how leverage without real diversification can disappoint, and another that demonstrates smart “return stacking” with OPTRA—combining modest leverage, gold, value tilts, and managed futures for equity-like returns with a steadier ride.
Along the way, we connect portfolio choices to what matters most: turning savings into a life well-lived over the next decade. A candid listener story reminds us that time is finite, and that a better withdrawal rate is not a luxury—it’s a plan for joy, relationships, and experiences now. If you’ve wondered whether your mix underuses factors, overlooks gold, or over-relies on 60/40 assumptions, this is your field guide to a sturdier, more generous retirement strategy.
If this resonates, tap follow, share it with a friend who needs a nudge to spend confidently, and leave a quick review with your biggest portfolio question. Your next ten years will thank you.
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In this episode we answer emails from Tyler, Michael and Jon. We discuss managing an inherited Roth across a 10-year window and related questions, compare VXUS to targeted international tilts, tax and asset location considerations for traditional and Roth IRAs, and talk about some of the basic ideas for achieving higher safe withdrawal rates.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Golden Ratio Portfolio Article: Beautiful Constants and the Golden Ratio Portfolio – Portfolio Charts
Afford Anything Podcast #618: They Ran Out of Money. I Didn’t. Here’s Why.
Slide Deck: Afford Anything Episode 618 RPR Basics Slide Deck.pdf - Google Drive
Video Summary: Afford Anything Episode 618 Video Summary.mp4 - Google Drive
Afford Anything Risk Parity Portfolio Blueprint: Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive
Bigger Pockets Money Podcast: The Secret to a 5% Safe Withdrawal Rate | Frank Vasquez
Slide Deck: BP Money Interview Slide Deck.pdf - Google Drive
Video Summary: BP Money 5 Pct Withdrawals (F. Vasquez).mp4 - Google Drive
Breathless Unedited AI-Bot Summary:
A surprise inheritance, a strict 10-year clock, and a plan that has to work through whatever the market throws at it—this conversation tackles the decisions that actually move the needle. We break down a practical approach to managing an inherited Roth IRA, why delaying withdrawals can preserve tax-free growth, and how to separate speculation from your core allocation so one risky bet doesn’t hijack your entire plan. Along the way, we show how risk parity portfolios lower sequence-of-returns risk and why the best “edge” is often calm structure, not prediction.
We dig into tax location with real-world transitions in mind. During your working years, most of the portfolio belongs in equities; the puzzle appears when you move toward retirement and spread assets across bonds and diversifiers. That’s where location shines: place ordinary-income-heavy assets in traditional accounts, keep the highest-growth assets in Roth, and avoid turning your taxable account into a tax drag. We also talk about securities-backed lines of credit and why reducing portfolio volatility can materially lower margin stress when you’re funding future purchases like rentals.
If international stocks feel like a copy of your U.S. exposure, they probably are. We explain how currency drives much of the U.S. vs ex-U.S. gap and why targeted tilts—international large cap growth and small cap value—can be a more effective pairing than broad VXUS. Then we tackle illiquid plays and limited partnerships: categorize by the underlying asset, respect rebalancing limits, and treat truly illiquid positions as separate businesses with independent cash flows.
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In this episode we answer emails from Jenna, Kevin, and Jack Rabbit. We challenge the myth of “never pay taxes” and show how to transition scattered holdings into a Golden Butterfly framework while keeping taxes manageable. We also examine Bitcoin’s role, review sample portfolio performance, and share new listener-created bonus material on the site.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Jack Rabbit's Creation re Episode 208 (Advice for Beginning Investors): A Parable for Beginning Investors in the Land of Oz
"Free Steak Dinner" Rant Episode: Episode 321: A Small Rant About Newman Selling Annuities At Local Steakhouses | Risk Parity Radio
Breathless Unedited AI-Bot Summary:
You can optimize a portfolio to the comma and still miss the point if the tax tail is wagging the rest of your life. We dive into a common blocker—fear of realizing gains—and replace it with a better plan: build the mix you actually need, then minimize taxes over years with smart account placement, specific-lot sales, and well-timed gain harvesting. From there we lay out a practical route to a Golden Butterfly structure—growth and value stocks, long Treasuries, gold, and short-term bonds—implemented primarily inside tax-deferred accounts to keep the brokerage account’s changes light and intentional.
Along the way, we tackle a hot question on Bitcoin. Our take is grounded, not tribal: no income, high volatility, and shifting correlation that often mirrors high-beta growth. If you must touch it, keep it tiny so it can’t steer your long-term outcomes. More important, we reframe risk tolerance: being comfortable with swings isn’t a destination. Decide whether your target is maximizing lifetime spending or terminal wealth, then right-size volatility and liquidity to fit that goal. Finance comes first; the personal is how you stick to it.
We round out the conversation with a market scoreboard—gold’s surge, equities’ strength, managed futures’ late-year pop—and a transparent look at model portfolios, from classic all-weather to a measured, levered stack that’s built for accumulators who accept higher swings. We also share a listener-made “graphic novel” twist on a past episode now posted as bonus material. If you’re ready to shed tax paralysis, align your assets with your life, and use diversification that actually works across regimes, this one’s for you. If you enjoyed it, subscribe, leave a review, and tell us: what’s the next move you’ll make to simplify and realign your portfolio?
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In this episode we answer emails from JT, Phil, and Glenn. We revel in the updates to the TestFolio tools, weigh how tilting toward small cap value can lift safe withdrawal rates but also reduces overall diversification, return to KBWP and how property and casualty insurance companies can provide value-tilted diversification, and discuss the tracking results reported on the About page at the website.
Links:
Testfolio 5% Withdrawal Backtest Comparison: testfol.io/?s=74fuq6N5WWd
Testfolio Comparison of SCV, LCG, LCV and SCG: testfol.io/?s=4eqimbZveGX
Weird Portfolio: Weird Portfolio – Portfolio Charts
Testfolio KWBP and BRK-B Analysis: testfol.io/analysis?s=l34pkinSxde
Fund Seeder Tracker Site: FundSeeder - Empowering Top Traders with Capital and Insights
Breathless Unedited AI-Bot Summary:
Ready to push past rules of thumb and actually pressure-test a retirement portfolio? We dig into how far a DIY investor can tilt toward small cap value to raise a safe withdrawal rate, what history really shows across 30- and 50-year windows, and why correlation—not bravado—decides whether you can keep spending through ugly markets. Using new Testfolio features with 100-year factor data, we compare the Golden Ratio and Golden Butterfly against more value-heavy mixes and pinpoint where the extra “cowbell” helps and where it just adds stress.
We also open a less-traveled door inside equities: property and casualty insurers. Whether you own them through KBWP or direct index the top names, this sleeve has delivered rare intra-equity diversification, often keeping pace with broad markets while zigging in years like 2022. We share the practical trade-offs—expense ratios vs. tracking error, simplicity vs. tax loss harvesting—and explain when the ETF is the smarter, lower-hassle choice. If you already own Berkshire Hathaway for your value core, you’ll hear why insurers can complement or substitute without bloating overlap.
Context matters, so we pull back the curtain on our publicly tracked taxable account and why it can look extreme in a bad year and strong in a good one. The whole-portfolio view is far steadier, closer to a risk parity blend of stocks, long treasuries, and diversifiers like gold and managed futures. The takeaway: if you want a withdrawal rate you can live with, build for multiple regimes—blend small cap value and large cap growth, keep long bonds for deflation shocks, and add real diversifiers that cut correlation when you need it most. Subscribe, share this with a DIY investor who loves data, and leave a review to tell us where you’d tilt next.
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In this episode we answer emails from Anonymous from New Jersey, James, and Brad. We answer a donor’s six-part retirement plan, from mortgages and liquidity to 403(b) constraints, ETF trading, asset location, asset swaps, and tax‑savvy withdrawals. Then we discuss the risks of staying in an accumulation portfolio for too long and the options for obviating a crash before transitioning.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
How To Do An Asset Swap Video from Risk Parity Chronicles: How to Do an Asset Swap
Tax Planning Book: Amazon.com: Tax Planning To and Through Early Retirement: 9798999841599: Garrett, Cody, Mullaney, Sean: Books
Breathless AI-Bot Summary:
Ever wonder whether paying down a mortgage before retirement is actually the safest move? We make the counterintuitive case for liquidity first: keep cash flexible during the messy early retirement years, when housing changes, college timelines, and new expenses collide. With a real listener case study, we show how a mortgage can be a tool, not a trap—and why you can always accelerate later once the dust settles.
From there we dig into a pain point for many educators and nonprofit pros: weak 403(b) lineups. We break down why insurance-driven menus lag, how to advocate for better providers and funds, and when it makes sense to roll to an IRA for full control. You’ll also learn how to keep tracking simple, why monthly check‑ins beat daily dashboards, and how consolidating at a service‑oriented custodian streamlines everything. On execution, we explain why ETFs beat mutual funds for rebalancing speed and precision, plus how to convert Vanguard mutual funds to ETFs without tax surprises.
Taxes and withdrawals get the spotlight too. We clarify asset location—shelter ordinary income, let capital appreciation work in brokerage and Roth—and outline “asset swaps” that let you sell what’s up while managing tax impact. For those still accumulating, we talk strategy for a smoother glide into a risk parity portfolio to reduce sequence risk, and the trade-offs between earlier protection and maximum growth. We wrap with a market scoreboard across stocks, bonds, gold, REITs, commodities, preferreds, and managed futures, and report on sample portfolios including Golden Butterfly, Golden Ratio, Ultimate, and leveraged variants.
If you value actionable, no-nonsense guidance for DIY investors, you’ll find ideas you can use right away—whether you’re five years from retirement or still building your base. Subscribe, leave a review, and share this with a friend who’s wrestling with 403(b) choices or planning a tax-smart withdrawal strategy.
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In this episode we answer emails from Anonymous, Pete, and Wilhelm. We discuss how MiFID reshapes investing for U.S. citizens retiring in the EU, the commodities fund HGER and the "Desert Portfolio."
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
IBKR MiFId Client Page: MiFID Client Category
Portfolio Charts Assets Page (for finding funds): Assets – Portfolio Charts
Animal Spirits Podcast re HGER: Talk Your Book: How to Invest in Commodities - Animal Spirits Podcast | Podcast on Spotify
Testfolio HGER Analysis: testfol.io/analysis?s=dcDPCTQc1j6
HGER Fund Page: ETF | Harbor Commodity All-Weather Strategy ETF (HGER) | Harbor Capital
Portfolio Charts Safe Withdrawal Rates Chart: Withdrawal Rates – Portfolio Charts
Breathless Unedited AI-Bot Summary:
Planning to retire in Europe while keeping a U.S.-style portfolio? The moment you change residency, MiFID rules can block purchases of U.S.-domiciled ETFs, turning routine rebalancing into a headache and putting your safe withdrawal rate at risk. We break down practical steps to keep your plan intact, including using Interactive Brokers to run a two-sleeve setup—sell-only in the U.S. account, buy in an EU account with UCITS equivalents—and how to make rebalancing work without creating a tax and paperwork nightmare. You’ll hear the pros, cons, and tradeoffs of each path so you can navigate regulation with confidence, not guesswork.
We also examine a smarter way to think about commodities. Legacy benchmarks like BCOM haven’t evolved with investor goals, and that’s where HGER’s rules-based design stands out with a quality and carry overlay that often elevates gold. But if you already hold gold, does a gold-tilted commodity fund add diversification or just overlap? We compare HGER to PDBC, highlight correlations with stocks and gold, and explain why managed futures can deliver broader, more resilient diversification across commodities, rates, and currencies. If you’re after true crisis defense, a blend of gold and managed futures may beat a traditional commodity sleeve.
To round it out, we stress-test the “desert portfolio”—high treasuries, modest equities, a touch of gold—and explain when its calm ride helps and when it lowers your long-term sustainable withdrawal. If your real objective is durable retirement income, consider upping equity exposure, adding value tilts, and relying on uncorrelated diversifiers that keep you rebalancing through drawdowns. Subscribe for more DIY-friendly portfolio tactics, share with a friend who’s eyeing an EU move, and leave a review to tell us what cross-border investing questions you want answered next.
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In this episode we answer emails from Adam, Cha Cha, and TJ. We discuss how cash and short-term bonds affect safe withdrawal rates, why the Golden Butterfly’s allocation is a preference not a rule, and how to build a growth-first plan when you’re starting late. And we wish Happy Birthday to Mick the Mugga Mugga.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Many Happy Returns Podcast Featuring Tyler: How to Pick Your Perfect Portfolio, with Tyler from Portfolio Charts
Video Summary of Recent Bronnie Ware Interview: https://drive.google.com/file/d/1XO1H7719LTel-WrwUABpMaAzdFk6-juv/view?usp=sharing
Catching Up To FI Podcast: Financial Independence - Catching up to FI
Excess Returns Podcast: Excess Returns Podcast | Excess Returns Podcasts - Helping Make You a Better Investor
Swedroe Factor Investing Book: Book Review: Your Complete Guide to Factor-Based Investing | CFA Institute Enterprising Investor
Breathless AI-Bot Summary:
Worried your portfolio is heavy on cash but light on purpose? We unpack the real trade-offs behind short-term bonds, money markets, and the Golden Butterfly’s famous “comfort cushion,” then show how a few precise tweaks can lift safe withdrawal rates without blowing up your sleep. Listener questions drive the heart of the episode: how much cash is too much, whether VTIP truly hedges better than VGSH, and why cash management rarely changes outcomes even though it feels reassuring.
From there we shift to a late-starter’s dilemma: chasing 8–10% average returns over a decade without gambling. We get practical about the only two ways to beat the market, why stock-picking “wins” often just mirror factor exposure, and how to use a simple, research-backed pairing—large-cap growth with small-cap value—to seek higher expected returns. We also cover when international tilts help, how currency drives comparisons more than people think, and where bonds, gold, and REITs fit as you move closer to financial independence.
Our take is direct and usable: minimize inert cash, diversify for shallower drawdowns, and reserve complexity for places that pay. Build growth while the gap to FI is wide, then add ballast on purpose as you near the goal. If you want a sturdier plan and a quieter mind, this conversation clears the noise and spotlights the levers that matter.
Enjoy the show? Follow, rate, and share it with a friend. Send your questions to Frank at RiskParityRadio.com, and if it helped, leave a quick review so more DIY investors can find it.
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In this episode we answer emails from Patrick, Kyle, and Dave. We discuss the advantages of using risk parity style portfolios for higher withdrawal rates, how to manage a sleeve of individual REITs, the joys of giving in its various forms, a risk parity style portfolio in a Donor Advised Fund, and reverse glide paths. We share how planned generosity, donor-advised funds, and employer matches can make retirement more meaningful.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Kitces & Carl podcast about "Frugal Bob": Helping Retired Clients To Actually Start Spending And Enjoying Their Money - Kitces & Carl Ep 178
Bigger Pockets Money Test Risk Parity Style Portfolio: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
Choose FI Podcast #574: Top Five Regrets of the Dying (Book Club with Frank Vasquez and Ginger) | Ep 574
Kitces Reverse Glidepath Article: The Benefits Of A Rising Equity Glidepath In Retirement
Breathless AI-Bot Summary:
Most retirees don’t fail because they spend too much; they struggle because their portfolios weren’t built for withdrawals. We unpack how risk parity, smarter rebalancing, and a reverse glide path can protect early-retirement years while keeping growth on the table. Along the way, we share listener stories that show what happens when a 100% stock believer embraces diversification and discovers the joy of giving—through donor-advised funds, employer matches, and a simple plan to distribute one percent or more each year.
We start with a real allocation shift: blending large growth, small value, long Treasuries, gold, managed futures, and a small sleeve of REITs to reduce sequence risk. Then we get tactical. For individual REIT holdings, we treat the sleeve as one allocation and only rebalance when the sleeve moves versus the rest of the portfolio. Inside the sleeve, focus on outliers—trim oversized winners, reassess laggards with deteriorating stories—and keep transactions light to minimize taxes and churn.
The heart of the episode explores how generosity reshapes retirement planning. Using a donor-advised fund to “stress test” withdrawals at high rates teaches mechanics and builds confidence, while employer matching turns donations into leveraged impact. We talk practical tools—automating gifts, donating appreciated shares, setting “use-by” dates on giving accounts—and nontraditional forms of giving that create work, support local businesses, and deepen relationships.
We close by breaking down the reverse glide path championed by Michael Kitces and echoed by Bill Bengen: start retirement with lower equity exposure and increase it over time. Our working template moves from the low 40% equity range toward 60–70% as years pass—an evidence-informed band that historically supports higher safe withdrawal rates and tamps down sequence risk. Paired with risk parity diversification and a deliberate giving plan, it’s a path that funds a life you actually want to live.
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In this episode we answer emails from Grant, Brian, and Mourad. We unpack Grant's various gambling problems with leveraged ETFs and Bitcoin wrappers, owning gold in CAD or USD for Canadians, the role of preferred shares and Mourad's recent visit to the Father McKenna Center.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Choose FI Podcast #574: Top Five Regrets of the Dying (Book Club with Frank Vasquez and Ginger) | Ep 574
Mary's CASA Case Adoption Story: The Johnson’s Foster Care & Adoption Story
Portfolio Charts Global Analysis: What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts
Breathless Unedited AI-Bot Summary:
Ever been tempted by a product that promises steady price, double‑digit yield, and exposure to the hottest asset on earth? We take a hard look at leveraged ETFs, Bitcoin‑linked strategies, and engineered income, then draw a clean line between thrill and risk you can actually carry. Grant checks in with a levered twist on the Golden Butterfly, swapping UPRO for TQQQ and TNA, and we explain why the Russell small cap complex often hides junky growth that fails to diversify when you need it most. If you want real balance, pair concentrated growth with genuine value or defensives, not a label that only looks like value on a factsheet.
We also break down MicroStrategy’s stock behavior versus spot Bitcoin and explore STRC, the “preferred” fund aiming to keep price near par while dialing a high payout. The headline yield is labeled return of capital, which may defer taxes but doesn’t manufacture wealth if the underlying can’t out-earn distributions. When the tide turns, structures like this tend to leak value, especially if they rely on direction and volatility to cooperate. If your goal is Bitcoin exposure, owning a spot ETF is usually cleaner and more predictable than chasing premium/discount dynamics or engineered yield.
For Canadian listeners, we make the case for treating gold as a currency and holding it in CAD to match real-world spending, reducing the noise of USD/CAD swings. Bonds are different: long U.S. Treasuries remain premier crisis ballast thanks to reserve currency demand. We review a thoughtful 50% equity risk‑parity‑style allocation targeting a 5% withdrawal rate, flag why a heavy preferred shares sleeve can be a drag, and suggest shifting part of that into long duration Treasuries, more gold, or a true diversifier like managed futures. Want portfolios that survive the cycle? Favor transparent exposures, honest hedges, and tools like Portfolio Charts to pressure‑test your mix across currencies.
If this helped sharpen your plan, follow the show, share it with a friend who loves complex wrappers, and leave a quick review so more DIY investors can find us.
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In this episode we answer emails from Camille and Jeff. We discuss how 72(t) and asset swaps enable early IRA access, where to place managed futures and treasuries for taxes, practical cash options at IBKR and ultra-short term ETFs, designing a mix for higher safe withdrawal rates, when to ratchet spending and when to hold flat, and tracking mandatory versus discretionary spending, among other things.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
How To Do An Asset Swap Video from Risk Parity Chronicles: How to Do an Asset Swap
FI Tax Guy Post on 72(t): Retire on 72(t) Payments – The FI Tax Guy
White Coat Investor Podcast with Sean Mullaney: Managing Taxes in Retirement with Sean Mullaney | White Coat Investor
Tax Planning Book: Amazon.com: Tax Planning To and Through Early Retirement: 9798999841599: Garrett, Cody, Mullaney, Sean: Books
Ultra-short ETFs for Parking Excess Cash: Ultra Short-Term ETF List
Portfolio Charts Descriptions of Variable Withdrawal Strategies: Retirement Spending – Portfolio Charts
Breathless Unedited AI-Bot Summary:
What if your IRA isn’t a locked box until 59½? We dig into the real-world playbook for early access and smarter withdrawals, showing how 72(t) and asset swaps let you fund life now without wrecking your allocation or triggering penalties. Along the way, we answer donor questions on where to park managed futures when tax-advantaged space is tight, how to rebalance when bonds live behind the IRA wall, and the cleanest ways to earn yield on cash at Interactive Brokers with short-term ETFs like SGOV, BIL, and JPST. We also touch on BOXX for high earners and ask our Canadian friends to weigh in on legacy RRSP headaches.
From there, we map a durable withdrawal framework: blend growth and value equities, hold intermediate and long treasuries for ballast, and add diversifiers like gold and trend to raise your safe withdrawal rate. If pensions and Social Security cover the essentials, a 5% withdrawal from a risk-balanced mix can still thrive over 30 years, especially when you limit spending increases to 1% instead of full CPI. For raises, we compare floor-and-ceiling rules to ratchets so you can lock in gains after meaningful portfolio advances, yet stay flexible when markets wobble.
To ground it all, we run through market movers—growth stocks buzzing, gold shining, bonds steadying—and share performance across our sample portfolios, from classic Golden Butterfly to leveraged variants. Takeaways are simple and usable: your access is wider than you think, tax location is a spectrum not a slogan, and the best spending rule is the one that fits your life. Subscribe, leave a review, and tell us: which withdrawal rule would you follow this year, floor and ceiling or a ratchet?
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In this episode we answer emails from Phil and Chris. We discuss moving from target date funds to low-cost index funds, why equity diversification needs a value tilt, how managed futures replication mimics an index fund in that asset class, options collars versus simply holding less equity, momentum models trade-offs and regime risk, long Treasuries compared with STRIPS for rate sensitivity, why TIPS don’t hedge portfolio-level inflation and practical ways to fight portfolio-level inflation with value-tilted stocks and alternatives.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Many Happy Returns Podcast Featuring Tyler: How to Pick Your Perfect Portfolio, with Tyler from Portfolio Charts
Portfolio Charts Drawdowns Chart: Drawdowns – Portfolio Charts
DMBF Video Re Dispersion of Recent Returns: iMGP DBi Managed Futures Strategy ETF Update with Andrew Beer | October 2025
Bernstein TIPS Article: Riskless at Age 104 - Articles - Advisor Perspectives ("A bond fund manager recently related to me his difficulty in figuring out the role of TIPS in his portfolios. After fumbling for a reply, I realized that he was right: like Social Security, they don’t occupy a formal slot in most folks’ asset allocation. . . . TIPS should be kept mentally separate from the policy asset allocation as well.")
Breathless Unedited AI-Bot Summary:
Ever feel like your “set it and forget it” fund is quietly holding you back? We open the hood on target date funds and show how shifting to clear, low-cost index building blocks can recover real performance over the long haul. From there, we get practical about designing portfolios that don’t just look diversified—they behave differently when markets sour. Think value tilts to counter mega-cap concentration, long-duration Treasuries for recession defense, and managed futures for trend-driven shock absorption.
We also tackle the allure of complexity. Options collars can cap losses, but they cap gains too—and often mimic what you’d get by simply holding less equity and more diversifiers. Momentum strategies like GEM carry academic support, yet every rule set faces regime risk and behavioral hurdles. Rather than chasing perfect timing, we focus on roles: which assets hedge recessions, which fight inflation, and which compound steadily in normal times. That clarity helps you skip the noise and build sturdy allocations.
On inflation, we cut through the myths. TIPS protect relative to nominal bonds, but they rarely shield an entire portfolio when inflation surges. If you want a real inflation response, look to assets with pricing power and trend sensitivity—managed futures, energy producers, and certain insurers—while reserving long Treasuries for growth shocks. We share why DBMF’s replication approach acts like an “index” for trend following, how STRIPS such as ZROZ can replace some long bonds for targeted rate exposure, and why a global perspective makes U.S.-centric limiting beliefs easier to spot and drop.
If you’re ready to swap wrappers for transparency and replace clever tactics with durable structure, this one’s for you. Follow the show, share it with a friend who’s reconsidering their default fund, and leave a quick review so more investors can find these ideas.
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In this episode we answer emails from Arun, Neil, and Stephen. We discuss intermediate accumulation portfolios, when you start needing bonds and being a good family man; favorite listener episodes #436 and #441, and an analysis of Thurman portfolios and what they are missing.
Links:
Episode 436 Video Summary: https://drive.google.com/file/d/1WQ1hvoLaX3hJL3DoLnaWsAxNBdOYFLB0/view?usp=sharing
Episode 441 Video Summary: https://drive.google.com/file/d/1fHpBZCykn-UOXMarWKIMVX0tLG9-OEDa/view?usp=sharing
Retirement Investment Advisors SEC Disclosure: Microsoft Word - DRAFT 2 ADV 03.2025 PART 2-03.25.2025
Thurman 10 Steps To Build Retirement Portfolio: E-Book 10 Portfolio Steps v1.2024
PortfolioLab Thurman Portfolio: Randy Thurman All-Weather Retirement Portfolio | PortfoliosLab
Portfolio Visualizer Analysis of Thurman Portfolios: Backtest Portfolio Asset Class Allocation
Breathless Unedited AI-Bot Summary:
Tired of vague investing advice that wilts when real life hits? We open the mailbag and get practical about three decisions most DIY investors face: rebalancing a mid-term portfolio, adding bonds before retirement, and whether a 100 percent stock allocation can actually work when you’re withdrawing. Along the way, we put a highly marketed “all-weather” retirement framework under the microscope and show why corporate bonds often fail when you need ballast most.
We start with an intermediate-term goal: saving for a house in three to five years. Rather than forcing taxable rebalancing, we explain how to direct new contributions and dividends toward lagging sleeves to maintain balance while sidestepping taxes. Then we tackle bond placement for accumulators in their late 30s and early 40s: why Treasuries belong in traditional 401(k)s, why cost basis doesn’t matter inside retirement accounts, and when adding bonds is a sleep-aid rather than a must-have. Next, we confront the 100 percent stock question. If you intend to underspend and maximize terminal wealth, it can work. If you want higher sustainable withdrawals, diversification wins.
The centerpiece: a head-to-head backtest of an “all-weather retirement” recipe built around corporate bonds and global equities versus a more balanced, risk-parity-inspired mix that includes Treasuries and a modest allocation to gold. The results highlight a core truth of sequence risk: smaller, shorter drawdowns can raise safe withdrawal rates and preserve flexibility. We also talk mindset—stop treating assets like sports teams. They’re tools: stocks for growth, Treasuries for defense, gold for inflation shocks. Set your stock percentage first, split growth and value, prefer Treasuries over corporates for hedging, consider 10–15 percent gold, and test your plan with Portfolio Visualizer, Portfolio Charts, Testfolio, and the Early Retirement Now toolkit.
Life design matters too. For parents in the exhausting middle—toddler chaos, peak earnings, zero time—we share a simple playbook: cut low-yield work commitments, focus on small, memorable family moments, and accept this as a temporary storm. Build a portfolio that buys time, not stress, and let your money serve the life you want. Enjoy the conversation, and if it helps, subscribe, leave a review, and share this episode with a friend who’s balancing markets and midnight wake-ups.
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In this episode we answer emails from Dave, Isaiah, and Ian. We discuss back-testing tools, revisit UPRO and leverage from the last episode, the inherent biases and incentives for retail financial advisors to recommend underspending and using underspending plans larded with window dressings, and revisit a limited 401k and a retirement scenario from Episodes 420 and 444.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Visualizer Backtester: Backtest Portfolio Asset Allocation
Testfolio Backtester: testfol.io
Breathless Unedited AI-Bot Summary:
Think your withdrawal rate is just a number? We dig into why the path matters more than the headline, showing how 0%, 3%, and 6% withdrawals change resilience without altering which portfolios dominate across different eras. Then we pull apart the leverage mirage: why 3x S&P funds can look unbeatable in calm runs yet suffer brutal volatility drag and catastrophic left tails when the decade turns against you. The goal isn’t fear—it’s sizing risk so you don’t bet your future on luck.
We also wade into the psychology of advice. Even fee-only planners face incentives to keep clients underspending, leaning on cash-heavy buckets, retirement “paychecks,” and tidy jargon that soothes but often costs performance. If you’re wired for DIY, you’ll appreciate a finance-first approach: let evidence drive the allocation, not marketing hooks. We contrast retail comfort with institutional discipline and offer a practical way to align your plan with the results you actually want.
For listeners wrestling with constrained 401k menus, we map out how to approximate risk parity using the levers that matter most: low-cost stock and core bond indexes, selective value tilts, and tax-aware placement. We touch Roth versus traditional choices when you’re in a low bracket, how to secure your FI core, and why continuing to work a decade after reaching FI might mean it’s time to spend more on life, not just accumulate more line items.
We close with a sharp market rundown and performance across sample portfolios, from classic diversifiers to levered blends. If you want a clear-eyed, practical framework for withdrawals, leverage, advisor incentives, and building robust portfolios with imperfect tools, this conversation will sharpen your plan. If it resonates, follow the show, leave a review, and share it with a friend who needs a finance-first reset.
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In this episode we answer emails from Roman, Andrew and Iain. We discuss the plusses and minuses of leverage, volatility drag, and how leverage interacts with diversification and withdrawals, general observation on tax optimization via account buckets, small cap value index funds and Avantis/DFA merits, and modelling annuities versus mandatory versus discretionary spending in retirement.
LInks:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Ben Felix Leverage Video: Investing With Leverage (Borrowing to Invest, Leveraged ETFs)
Leveraged ETFs Paper: Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs
Optimized Portfolios Article/Website: How To Beat the Market Using Leverage and Index Investing
Jim Sandidge Chaos Theory Applied to Drawdowns: RMJ081-ChaosAndRetirementSecurity.pdf
"Buffet's Alpha" Paper: Full article: Buffett’s Alpha
New Tax Planning In Early Retirement Book: Amazon.com: Tax Planning To and Through Early Retirement: 9798999841599: Garrett, Cody, Mullaney, Sean: Books
Merriman Best IN Class ETF Selections: Best ETFs 2025 | Merriman Financial Education Foundation
Breathless Unedited AI-Bot Summary:
Ever wonder why leverage looks brilliant during bull markets but feels brutal the moment you start withdrawing cash? We break down the promise and pitfalls of adding leverage to diversified, risk parity-style portfolios, then show how the math of volatility drag and sequence risk can quietly erode safe withdrawal rates. It’s an honest tour of what works in accumulation, what breaks in retirement, and how to engineer a calmer path without surrendering all upside.
We start with the straight talk: leverage and concentration are the two proven routes to outperformance, but only one of them can be paired safely with broad diversification. From hedge fund history to the “Aggressive 50/50” experiment, you’ll hear why high-octane blends can top the charts and then stall after deep losses, especially when distributions force selling at the worst times. We contrast that with return stacking and measured leverage, which aim for equity-like returns with better risk control, and we share practical tools—rebalancing discipline, cash buffers, and dynamic spending bands—to keep a drawdown portfolio intact.
Taxes matter just as much as tickers. We walk through Roth vs traditional contributions, why present marginal rates and future flexibility drive the choice, and how to place bonds smartly across tax buckets. On the equity side, we revisit small cap value: why classic S&P 600 value exposure is solid, and how AVUV and DFA’s profitability filters can sharpen the factor without turning it into active guesswork. Then we turn to spending: build the plan around real expenses, not theoretical annuities. Set a durable floor for essentials, keep a flexible layer for the fun stuff, and consider partial annuitization later in life if longevity and peace of mind are worth the trade.
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In this episode we answer emails from Jess, Phil and Scott. We discuss an experience of setting up a sample RPR portfolio for one's self, using asset swaps to manage cash, and fun with the low bar standards and other inadequacies of many financial advisors.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
How To Do An Asset Swap Video from Risk Parity Chronicles: How to Do an Asset Swap
Bigger Pockets Money Test Risk Parity Style Portfolio: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
Excess Returns Podcast With Rick Ferri (forward to minute 49): Most Never Escape Stage 3 | Rick Ferri on How You Can Beat the Complexity Trap
Breathless Unedited AI-Bot Summary:
Tired of being told that everything beyond a three-fund portfolio is “too hard”? We pull back the curtain on practical tools that make DIY investing simpler in practice, not smaller in ambition. Starting with a listener’s test portfolios, we show how hands-on experience beats theory, why diversification means loving today’s winners and tomorrow’s comebacks, and how to turn rebalancing into reliable cash flow.
We go deep on asset location and the overlooked power of asset swaps. By “selling here, buying there,” you can keep your overall mix unchanged while moving ordinary income into tax-deferred accounts and positioning equities in taxable for qualified dividends and capital gains. If you’ve been parking big cash balances in a HYSA and wondering why your tax bill keeps creeping up, this segment is your blueprint for tax efficiency without extra risk.
Then we tackle withdrawal rates with clear eyes. Many advisors still anchor to 3 percent for retirees in their 60s. We explain why diversified, risk parity style allocations can responsibly target closer to 5 percent over long horizons, especially when you harvest from strength. Case in point: trimming gold after a powerful run to fund November distributions across our sample portfolios. We share market snapshots, what’s leading and lagging, and how a rules-based process keeps emotion out of the driver’s seat.
If you want an investing plan that funds a life—relationships, experiences, generosity—rather than an accounting hobby, this conversation is your on-ramp. Subscribe, share with a friend who needs a nudge to start that test portfolio, and leave a review telling us your target withdrawal rate and why.
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In this episode we answer emails from Tyson, Patrick, and Shuchi. We discuss the basics of transitioning, SCHD as a value fund choice, bitcoin vs. gold, why "only works for 30 years" is a fake problem, the difference between our use of value funds vs. Paul Merriman's, and when would me make adjustments to our plans in retirement.
Links:
Bigger Pockets Money Podcast #1: The Secret to a 5% Safe Withdrawal Rate | Frank Vasquez
Bigger Pockets Money Podcast #2: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
Morningstar Analysis of SCHD: SCHD Stock - Schwab US Dividend Equity ETF | Morningstar
Golden Ratio Portfolio on Portfolio Charts: Golden Ratio Portfolio – Portfolio Charts
Retirement Spending Calculator: Retirement Spending – Portfolio Charts
Drawdowns Calculator: Drawdowns – Portfolio Charts
Michael Batnick Critique of CAPE Ratio "Predictions": Stocks Are More Expensive Than They Used to Be
Breathless AI-Bot Summary:
A plan that survives contact with the market looks different from the one you sketch on a napkin. We break down the 80 percent FI pivot—why shifting from an aggressive accumulation mix to a retirement-ready allocation a few years early can defuse sequence risk without surrendering growth—and show how to decide when to pull that lever without second-guessing every blip.
We also tackle one of the most popular questions right now: can Bitcoin replace gold? Short answer: not for core diversification. Gold’s role as a Basel III Tier 1 reserve asset and its central bank demand make it a unique stabilizer in a way that risk-on assets can’t duplicate. Bitcoin behaves more like a levered tech proxy, which is interesting for satellite bets but insufficient as an anchor. On equities, we explain why splitting the stock sleeve between growth and value—think a broad growth-leaning fund paired with a true value fund like SCHD—creates the performance dispersion that fuels rebalancing gains during stress, raising durability without betting on factor outperformance.
If the 30-year rule worries you, breathe. Withdrawal rates flatten as horizons extend, and real-world retiree inflation typically runs 1 to 2 percent below CPI, offsetting the longer timeline. Add simple guardrails—pausing raises, trimming discretionary spend in bad years—and you can boost sustainability by about a percentage point. The key is to know your portfolio’s historical drawdown depth and length, set bright lines for action, and avoid valuation-based fortune-telling. Diversification and disciplined rebalancing beat crystal balls.
If you found this helpful, follow the show, leave a review, and share it with a friend planning their FI transition. Your support helps more DIY investors build portfolios designed to last for life.
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In this episode we answer emails from Eva, Jess and Mr. Toxic. We discuss the three levers of safe withdrawal rates applied to a listener's upcoming retirement situation, running test risk parity style portfolios to get some practice like with have done with Bigger Pockets money, and what little we know about HSAs.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
How To Do An Asset Swap Video from Risk Parity Chronicles: How to Do an Asset Swap
Jackie Cummings Koski on Investing with HSAs: Investing With The Health Savings Account - Define Your Legacy W/ Jackie Cummings Koski
Bigger Pockets Money Test Risk Parity Style Portfolio: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
Breathless Unedited AI-Bot Summary:
Most retirement plans stumble not on math, but on mechanics. We sit down with a listener who’s 55, VTI-heavy in a taxable account, and ready to pivot into a modified golden ratio portfolio—then unpack a practical path to move from concentration to resilient diversification without lighting up a massive tax bill. Along the way, we map out the three levers that quietly raise your safe withdrawal rate: portfolio design, baseline expenses, and personal inflation that often runs 1–2% below CPI.
We get specific on asset location and reallocation: placing treasuries and managed futures in tax-deferred accounts, using gold and equities where they’re most tax-efficient, and gradually trimming VTI by targeting favorable tax lots and capital gains brackets. If you’ve wondered whether a small cap value tilt can help, we explain how it can reduce volatility and lift a portfolio’s historical withdrawal capacity by roughly 0.5–1%—and how to pursue it at a measured pace. We also clear up a common confusion: rebalancing returns you to your target mix; reallocating changes the target itself.
Then we turn to HSAs. They’re a triple tax-advantaged powerhouse for you, but a poor inheritance vehicle for kids who must recognize the balance as income in a single year. We break down the strategy of saving receipts, the shift at age 65 when non-medical withdrawals are IRA-like, and why timing HSA spending for higher-income retirement years often makes sense. Don’t count on a costly end-of-life to “use it up”—many don’t have that trajectory. A smarter approach draws down the HSA earlier for qualified costs and Medicare premiums while avoiding a tax bomb for heirs.
We wrap with weekly portfolio reviews across classic and levered models and a reminder that simple beats clever: a resilient allocation, tax-savvy placement, and flexible spending can carry you from early retirement through Social Security and beyond. If this helped tighten your plan, follow the show, leave a review, and share it with a friend who’s staring down a VTI-heavy portfolio and wondering where to start.
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In this episode we answer emails from Luc and Nick. We discuss the four levels of investors, the fundamental problems with identity that terms like "saver" and "Boglehead" cause per Morgan Housel, fallacious reasoning often applied to investing and portfolio construction, equity core with growth–value balance and small-cap value tilt, VTI vs VUG trade-offs and tax considerations, tax efficient asset location for bonds, equities, gold, considerations about alternatives like managed futures, and using risk parity portfolios for intermediate term savings during your accumulation phase.
Links:
Luc's Boglehead Forum Link: Golden Ratio Portfolio - Frank Vasquez - Bogleheads.org
Mindy Jensen's Risk Parity Style Portfolio: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
Breathless Unedited AI-Bot Summary:
Want a portfolio that funds your life, not your identity? We dig into the fuss around the “Golden Ratio” name and get to what actually matters: principles that increase safe withdrawal rates and reduce stress when markets turn weird. Instead of defending a formula, we show how to use uncorrelated assets, thoughtful macro-allocation, and enough simplicity to keep you invested without blinding you to risk.
We break down four investor levels—from money hygiene and shiny-object traps to the comfort of low-cost indexing—and then the jump to level four, where professional-grade ideas get translated for DIY investors. That’s where uncorrelated assets like Treasuries, gold, and managed futures earn their keep, not because they’re trendy, but because they lower correlation to stocks and smooth cash flows across regimes. We also call out common fallacies that derail portfolio debates: past performance cliches that prove nothing, irrelevant metrics used as cudgels, and cherry-picking that erases the 1970s and 2022 as if rare events never recur.
Then we get practical with a young FI couple: how to build a durable equity core by pairing total market or large-cap growth with a small-cap value tilt, why VTI is usually fine while VUG may diversify better against value in tax-deferred accounts, and how to avoid tax pain when transitioning. We map smart asset location—ordinary-income generators in traditional, long-term growers in Roth, tax-efficient equities in taxable—and set realistic ranges: 40–70 percent stocks, 15–30 percent Treasuries, under 10 percent cash, and 10–25 percent alternatives. No dogma, just ranges that historically support higher withdrawal rates.
We close with a versatile idea: an intermediate risk parity “slush” portfolio you can tap for big purchases without riding the all-stock rollercoaster. Add to laggards, sell winners, keep it simple, and stay focused on the only scoreboard that matters—sustainable spending. If you’re ready to trade identity for outcomes and marketing for math, this one’s for you.
If this resonated, follow the show, leave a review, and share it with a friend who’s rethinking their allocation. Your future self—and your future spending—will thank you.
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In this episode we answer emails from Ron, Mark, Rick and Keith. We revel in your generosity and discuss the mechanics of monthly withdrawals and how rebalancing smooths that over, modelling portfolio with money going in and money going out, and a follow up on portfolios employing futures contracts as leverage. And gooooold!
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Our South Africa Trip Video Playlist: Penguins in Cape Town
Remembering Gov. Schaefer: The Eastern Shore remembers Schaefer
Recent Bigger Pockets Money Episode Mentioning RP Portfolios: FIRE is Dead...and Here's What Replaced It
Portfolio Visualizer Financial Goals Tool: Financial Goals
Accumulating in a Golden Ratio Portfolio Article: Minimize Your Miss – Portfolio Charts
Keith's Portfolio Backtest: https://testfol.io/?s=9Am02OVX6XD
Breathless Unedited AI-Bot Summary:
Gold doesn’t care about narratives, and this year it’s rewriting a lot of them. We walk through what a powerful gold run means for real-world withdrawals, safe withdrawal rates, and the way diversified portfolios shoulder risk when the regime shifts. From the Golden Butterfly and Golden Ratio to return-stacked experiments, we review performance, drawdowns, and why structural diversification—equities, Treasuries, gold, real assets, and managed futures—often beats clever timing when you’re spending from your nest egg.
We also open the donor mailbag with sharp questions from listeners practicing monthly withdrawals ahead of retirement. Should you fund withdrawals from accumulated cash or trim recent winners? How much does trade timing matter at month-end? We share simple rules that reduce friction: let dividends build a cash buffer, sell strength back to targets, and rely on periodic rebalancing to correct small timing errors. For those using volatile tools like UPRO, TMF, or crypto, we explain why defined targets and a steady cadence matter more than chasing the “perfect” price.
Futures curious? We touch on financing costs, collateral choices, and the risk realities of leverage, including why even elegant models must respect max drawdown. Along the way, we challenge the habit of erasing the 1970s from gold analysis and highlight how data-driven diversification can protect retirees from sequence risk. Whether you’re simulating withdrawals or already living on your portfolio, you’ll get practical tactics and a clearer lens for portfolio design.
If this resonates, follow the show, leave a review, and share it with someone planning their retirement drawdown. And if you want your question answered sooner, support the Father McKenna Center through our site—every donation helps and moves you to the front of the line.
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In this episode we answer emails from Niek, Dustin, Dale, Hydromod and . We discuss adopting a golden ratio mix and not having unrealistic expectations, the plusses and minuses of the AI-version-of-you fad, the new website and why trying to use gold futures for leverage might not be the best choice for your gambling problem.
Link:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Breathless Unedited AI-Bot Summary:
Ever had a month where nearly everything in your portfolio rose and wondered if the universe broke? We unpack why September’s across-the-board lift made sense in a weaker-dollar world, what temporary positive correlation looks like in practice, and how a golden ratio-style allocation helps you ride the wave without refreshing your account every hour.
A listener’s note from the road kicks off a candid conversation about trusting diversified portfolios and ignoring daily noise. From there, we dig into the hype and hazards of AI finance gurus—yes, including Ray Dalio’s “digital Ray.” We talk usefulness, accuracy gaps, and the risk of forming unhealthy attachments to bots that sound wise but miss nuance. Along the way, we challenge a popular myth: that copying successful people’s habits will unlock their results. Extraordinary investors aren’t great because they make their beds; they’re great because they’re extraordinarily skilled. For the rest of us, evidence-based allocations, low costs, and sensible rebalancing are the habits that pay.
We also get practical. You’ll hear our simple distribution shortcut (divide by 240 for a 5% annualized monthly draw), plus a tour of our streamlined website with faster search and full transcripts. Then we roll up our sleeves on gold exposure: why futures create rollover and curve headaches, when ETFs and return-stacked funds can be smarter, and how modest, low-cost margin—or leveraging equities instead—can open room for diversifiers like gold and managed futures. The throughline is clarity over complexity: build a portfolio that bends without breaking, whether the dollar dips, inflation flares, or correlations get weird for a while.
If this resonates, follow the show, leave a quick review, and share it with a friend who’s wrestling with allocation choices. Your questions shape future episodes—send them our way and join the conversation.
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In this episode we answer emails from Jimmy, Anonymous and Matthew. We discuss financing a home with portfolio leverage via ETFs or margin, revel in the generosity of our listeners and real-life encounters, and review a risk parity style portfolio and plan. And touch on our recent vacation to South Africa.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
New Father McKenna Center YouTube Channel: Father McKenna Center - YouTube
SOAR Gala Information: 2025 Washington DC Awards Gala - SOAR! - Support Our Aging Religious
Breathless Unedited AI-Bot Summary:
A near-miss with lions on safari sets the stage for a different kind of risk: how to fund a new home when most of your wealth sits in a taxable portfolio. We dive straight into the trade-offs between selling positions, taking a margin loan at a low-cost broker, or using a return-stacked ETF like RSST to maintain exposure while freeing up cash. The core question isn’t just, “Can I do this?” but “Can I live with it through a full market cycle?” We break down taxes, financing costs, and the behavior premium that separates clever from fragile.
From there, we build a clean, high-conviction risk parity allocation anchored in three pillars—stocks, Treasuries, and gold—and show why that can be enough to lift a safe withdrawal rate if you respect correlation math and rebalance discipline. Within equities, we pair large-cap growth with small value and international value to spread factor and regional risk. In the bond sleeve, we weigh a simple one-fund approach against a two-fund split (VGIT + VGLT) for small fee and flexibility gains. We also get practical on withdrawals: monthly trims from winners can quietly rebalance your portfolio while matching real-life bills, while quarterly or annual withdrawals suit planners who prefer fewer moves and more cash on hand.
Finally, we pull up the dashboard. Gold’s massive run challenges narratives that cherry-pick 1980 as a starting point; bonds have life; small value lags; and our sample portfolios highlight why diversification and costs matter more than headlines. The classics keep compounding, while the leveraged set underscores that concentration plus leverage is a rough mix, and thoughtful “return stacking” needs clear rules and flexible spending. If you’re weighing a home purchase, chasing a higher safe withdrawal rate, or simply trying to keep your strategy steady, you’ll find concrete steps you can use today.
Enjoy the conversation? Follow the show, leave a quick review, and share this episode with a friend who’s planning a big financial move.
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In this episode we answer questions from Chris, George and "I Have No Name." We discuss a transition situation with bonus portfolio question, the plusses and minuses of Pralana and similar calculators, and an amusing take on the Golden Butterfly portfolio reimagined.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Rational Reminder Podcast: David C. Brown: The Underperformance of Target Date Funds | Rational Reminder 374
Breathless Unedited AI-Bot Summary:
What happens when you need to transition from a high-equity portfolio to a risk parity approach but face limited investment options in your 401(k)? How reliable are those fancy retirement calculators that promise to predict your financial future? And do those neatly organized "bucket strategies" actually improve portfolio performance, or are they just psychological comfort tools?
Frank Vasquez tackles these pressing questions from listeners who are navigating the complexities of retirement planning and portfolio construction. Beginning with practical advice for a listener four years from financial independence, Frank explores how to handle the transition to a risk parity portfolio despite restrictive 401(k) investment options. Rather than fixating on finding the perfect funds immediately, he suggests focusing on getting the macro-allocations roughly right until more flexibility becomes available through an IRA rollover.
The conversation shifts to a critical examination of retirement calculators like Pralana that rely on parameterized returns rather than historical data. Frank cuts through the marketing hype to reveal why these tools often function more like crystal balls than reliable forecasting instruments. "You're supposed to use base rates," he explains, "not make up things from a crystal ball that says things are going to be worse than they were before, better than they were before." This segment offers a masterclass in distinguishing between good forecasting methodologies and mathematically sophisticated but fundamentally flawed approaches.
Perhaps most illuminating is Frank's analysis of bucket strategies in retirement planning. While organizing investments into conceptual buckets labeled for different time horizons may feel reassuring, these psychological tools don't fundamentally alter portfolio performance. "Looking at personal finance and separating what is finance from what is personal" becomes the key insight, helping listeners distinguish between strategies that actually improve financial outcomes versus those that simply make complicated concepts easier to visualize.
Ready to see beyond the marketing gimmicks and focus on evidence-based approaches to retirement planning? Listen now, then like, subscribe, and leave a review to support the show while Frank takes a brief hiatus until mid-October.
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In this episode we answer one big long email from Mr. Bill (actually Dr. Bill). We discuss a planning process grounded in good data science, forecasting techniques and decision theory, and how we incorporate the concepts described in Bill Bengen's new book, using Dr. Bill as our guinea pig.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Risk Savvy Lecture: Risk Savvy: How to Make Good Decisions
Bill Bengen's New Book: Bill Bengen's New Book | A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.
Portfolio Charts Safe Withdrawal Rate Calculator: Withdrawal Rates – Portfolio Charts
Breathless Unedited AI-Bot Summary:
Retirement planning doesn't have to be rocket science. In this illuminating episode, we dive deep into the transition from accumulation to distribution phases of financial independence, offering a clear-eyed approach based on data science and practical wisdom.
At the heart of effective retirement planning lies proper forecasting methodology. Most financial advisors miss this crucial foundation – they load forecasts with conservative assumptions rather than using base rates, creating unnecessarily fearful projections. We explore why understanding the difference between risk (what's calculable) and uncertainty (what isn't) transforms how you should approach planning for the decades ahead.
The four levers that control your retirement success form our central framework: supplemental income, asset selection, flexible withdrawals, and fear/hoarding. Each lever offers unique opportunities to optimize your financial independence. Risk parity portfolios consistently demonstrate 1-2% higher safe withdrawal rates than traditional portfolios, while simply accounting for retirees' typical lower inflation experience (CPI minus 1-2%) can safely increase withdrawal rates by 0.5-1%.
We tackle the psychological aspects of retirement planning too. Most retirees underspend significantly, pulling the "fear and hoarding" lever while ignoring the other three, ultimately sacrificing quality of life and relationships. Instead, we advocate for thoughtful legacy planning while alive – supporting family members, teaching financial literacy, and creating meaningful impact with your resources.
Whether you're approaching retirement or already there, this episode offers practical wisdom to simplify your planning process. By focusing on tracking expenses meticulously in the early years and using simple rules of thumb for long-term forecasting, you'll create a retirement plan that maximizes both financial security and life satisfaction.
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In this episode we answer emails from Adam, Private Cowboy, and Jose. We discuss managed futures (again with references!), Bill Bengen's latest book and how it integrates into our approach, and the pros and cons of a Vanguard Personal Advisor-created portfolio and the hypocritical quandaries it creates with the gods of Simplicity.
Links:
Demystifying Managed Futures: Demystifying Managed Futures
Bloomberg Presentation On Investments In Inflationary Environments: MH201-SteveHou-Bloomberg.pdf
Dunn Capital Analysis: High-Vol-Trend-Following-Trend-Index-Edition-0825-DIGITAL.pdf
Kardinal Financial Video: What is Alternative Investing?
Interview of Bill Bengen: Episode 195: The 4% Rule and Beyond: Retirement Strategies with Bill Bengen
Weird Portfolio: Weird Portfolio – Portfolio Charts
Afford Anything Episode: #618: How to Retire at 50 While Supporting Aging Parents, with Frank Vasquez - Afford Anything
Corey Hoffstein Interview: Show Us Your Portfolio: Corey Hoffstein
Breathless AI-Bot Summary:
The perfect asset allocation isn't a formula—it's a framework built on uncorrelated assets that dance to different drummers during market storms. This episode dives deep into managed futures, one of the most powerful yet misunderstood portfolio diversifiers available to individual investors.
Three listener questions explore how managed futures fit within retirement portfolios, particularly for those approaching their post-career years. Frank breaks down why managed futures have essentially zero correlation to stocks, bonds, and even gold, making them uniquely valuable during both inflationary crises (like 2022) and deflationary periods (like 2008). He references new research from Dunn Capital comparing various alternative strategies and explains how ETFs like DBMF have democratized access to institutional-quality diversification.
Beyond managed futures, the episode synthesizes Bill Bengen's latest safe withdrawal rate research with Ray Dalio's "Holy Grail" principle of uncorrelated assets. While Bengen's new book doesn't explicitly analyze alternatives, Frank connects these complementary approaches to formulate practical guidelines: maintain 40-70% equity exposure divided between growth and value, use 15-30% treasury bonds for recession protection, allocate 10-25% to alternatives, and limit cash to under 10%.
The discussion takes a critical look at cookie-cutter financial advice, particularly questioning whether paying 0.3% annually to a Vanguard advisor provides value when their recommendations often involve overlapping funds and questionable international bond allocations. Frank challenges the "worship of simplicity" that permeates financial discussions while exposing the irony that these same advisors often recommend complex multi-fund portfolios.
What emerges is a call for "system two" thinking—the willingness to incorporate new information rather than clinging to outdated formulas out of consistency.
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in this episode we answer emails from Chris, Trudie, and Earl. Highlights: The Father McKenna Center "Top of the T-shirt" campaign raised over $66,624 thanks to generous listener contributions; financial advisors are conflicted and also relatively uninformed marketing machines who are not very curious about finances and are too reliant on calculators; AI tools like Copilot can help implement risk parity strategies when fed quality information.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
If you have comments or questions, please email frank@riskparityradio.com or visit www.riskparityradio.com.
Breathless AI-Bot Summary:
What happens when financial wisdom meets unconventional thinking? This episode of Risk Parity Radio opens with Emerson's timeless quote about foolish consistency being "the hobgoblin of little minds" – perfectly setting the stage for a fresh look at portfolio management that marches to a different beat.
The Risk Parity Radio community shines as Frank announces the remarkable success of the Father McKenna Center fundraising campaign, which raised over $66,624. This achievement showcases the extraordinary engagement of listeners who value both financial knowledge and giving back. As Frank puts it, "I never really cared about having the largest audience. I just wanted to have the most engaged audience" – and with 2,500 regular listeners who actively participate in such initiatives, that goal has clearly been achieved.
Diving into listener correspondence, Frank explores how one community member has leveraged AI tools like Copilot to implement risk parity strategies. This sparks a broader examination of technology's role in personal finance, with Frank cautioning that AI is only as good as the information it's fed. In an age where many advisors have become what Frank calls "calculator jockeys" – professionals who rely on planning software without understanding its limitations – this distinction between tools and expertise becomes crucial.
The episode delivers a masterclass in practical financial knowledge, including an elegant explanation of the 240/200 rule for calculating monthly distributions. This mathematical shortcut exemplifies the podcast's approach: making complex concepts accessible without talking down to the audience. Frank demonstrates how dividing a portfolio value by 240 yields a monthly distribution equivalent to a 5% annual withdrawal rate – the kind of straightforward, useful information that listeners can immediately apply.
The weekly portfolio review reveals impressive performance across all eight sample portfolios, with gold continuing its remarkable run at 36.91% year-to-date. From conservative allocations to more experimental leveraged strategies, these real-world examples provide valuable insights for listeners navigating their own investment journeys.
Ready to break free from financial convention and build a portfolio that truly reflects your goals? Subscribe now and join a community of independent thinkers who know that sometimes the most rewarding path is the one less traveled.
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In this episode we answer emails from Andy, Phil and Brady. We entertain Andy's musings on small cap value and the economy with crystal balls and complex adaptive systems theory, discuss the foibles of radio personalities attempting to try to be able to comment on what we do -- and their hypocrisies and conflicts of interest --, and touch base with the parent of a special needs child.
Links:
Phil's link to Radio Personality Podcast: Query Day - Talking Real Money - Investing Talk - Apple Podcasts
Mary Tyler Moore Episode: The Mary Tyler Moore Show S5E23 Ted Baxter's Famous Broadcasters' School (February 22, 1975)
Comparison of 60/40 and Golden Ratio Portfolios: https://testfol.io/?s=eUbVJ2frelJ
Apella Wealth Form ADV: APELLA WEALTH - Investment Adviser Firm
Morningstar Article Re GLDM and DBMF: How ETF Diversifiers Performed During Market Turmoil | Morningstar
Breathless Unedited AI-Bot Summary:
Ever wonder why financial advisors insist DIY investing is "too complicated" while charging fees that can consume a third of your retirement income? In this eye-opening episode, Frank Vasquez exposes the hypocrisy behind mainstream financial advice and offers practical alternatives for truly resilient portfolios.
When a listener asks whether structural market changes warrant portfolio adjustments, Frank dives into the nature of financial markets as complex adaptive systems. Like a sandpile where it's impossible to predict which grain will cause an avalanche, markets respond to events in unpredictable ways that even the most sophisticated models can't forecast. This reality doesn't mean we should abandon strategy—rather, it underscores why diversification across truly different asset classes matters more than ever.
Frank takes aim at financial media personalities who promote oversimplified solutions while dismissing alternatives they don't fully understand. Through careful analysis of SEC disclosures, he reveals how some advisors criticize strategies on air that their own firms use with paying clients. The fixation on "simplicity" often serves as marketing to convince DIY investors they need professional help, while masking fee structures that can extract 1-1.5% of assets annually—an enormous drain on retirement resources.
The episode highlights recent Morningstar research confirming what Risk Parity Radio has long advocated: portfolios incorporating alternative assets like gold and managed futures demonstrably outperform traditional 60/40 allocations while reducing volatility. As Frank notes, echoing Einstein, we should make investing "as simple as possible, but no simpler." This wisdom proves especially crucial during withdrawal phases when sequence risk poses the greatest threat to retirement security.
Whether you're planning for your own retirement or, like one listener, strategizing for a dependent with special needs who may require lifelong support, this episode offers both practical insights and a framework for evaluating financial advice with clear eyes. In a world where conflicts of interest often distort financial guidance, Frank's independent perspective provides a refreshing and valuable counterpoint.
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In this episode we answer emails from a Mysterious Visitor, Pal and Byron. We review our approach to international stock funds and how to improve their diversification, try to help out a Canadian nomad and discuss some new Vanguard funds.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
US vs International Stocks In Strong And Weak Dollar Markets (link from Episode 393: us-dollar-strength-has-correlated-with-performance-03312023.pdf
Testfolio Analysis of VXUS vs. AVDV and IDMO: testfol.io/analysis?s=eDLfJ4jcFLK
Constructing a Golden Ratio Portfolio with International Components: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
Byron's Link: Vanguard Launches a New Actively Managed Bond ETF | Vanguard
New Wellington ETFs: Vanguard to Launch First Stock-Picking ETFs With Wellington — at Its Highest Fees Yet
Breathless Unedited AI-Bot Summary:
Conventional wisdom about international diversification gets turned on its head as we explore what truly drives the performance difference between domestic and international stocks. Far from being about different economies or company headquarters, approximately 40-50% of this performance gap stems directly from currency fluctuations between the US dollar and foreign currencies. When the dollar weakens, international stocks surge; when it strengthens, US stocks lead.
For investors focused on building resilient portfolios with sustainable withdrawal rates, this revelation reshapes diversification priorities. Value versus growth diversification emerges as significantly more important than geographic diversification, followed by size factor (small versus large caps). This hierarchy challenges the simplistic notion that pairing a total US market fund with a total international fund provides meaningful protection.
Large US companies already operate globally, selling into worldwide markets regardless of headquarters location. This makes traditional total international funds less diversified from US large caps than many investors realize. Instead of blanket international exposure, we explore more effective approaches using specific international value, small-cap, and emerging market funds that provide genuine diversification benefits.
The episode also tackles practical implementation questions, including how expatriates and nomadic investors might construct globally resilient portfolios using Irish-domiciled ETFs for potential tax advantages. We briefly examine Vanguard's new ETF offerings and explain why their corporate bond funds hold limited appeal for investors seeking recession insurance rather than income.
Our monthly portfolio review highlights gold's stellar performance (up 31.56% year-to-date) amid dollar weakness, demonstrating the principles discussed throughout the episode. These eight real-world portfolios showcase different approaches to implementing risk parity principles, with performance and distribution data available at riskparityreview.com.
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In this episode we answer emails from Nick, No Name, and Nathan. We discuss transitioning at 70% to FI, the inherent problems with a lot of psychology-based and convenience-based finance media and personal finance that fails to do the finance part first, Mary's amusement with Frank's ego (don't encourage him), and financial coaching.
And we get to hear from Abby at the Father McKenna Center.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Shannon's Demon Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Video Interview of Abby: The Church's View on Homelessness Amid Trump’s Removal Plan in D.C. | EWTN News Nightly
If you have comments or questions, please send them to frank@riskparityradio.com or visit www.riskparityradio.com.
Breathless Unedited AI-Bot Summary:
When should you transition from a high-equity portfolio to a risk parity approach? This question, posed by a listener at 70% of their FIRE number, launches us into an exploration of timing one of the most critical shifts in an investor's journey.
The ideal transition point typically comes at 80% of your target number and about five years from your goal. The logic is straightforward: you want to secure your gains while your portfolio sits near all-time highs, shifting from aggressive growth to stability as you approach financial independence. Your decision should weigh how much you'll continue contributing and your personal risk tolerance.
This episode also pulls back the curtain on the troubling state of financial media. Too many "experts" repeat outdated concepts like the "100 minus your age" rule—a relic from the 1990s with no empirical backing. We explore how financial advice has become psychologically driven rather than financially optimized, with advisors choosing strategies that are easy to explain rather than those that deliver optimal results.
As Upton Sinclair observed, "It's difficult to get a person to understand something when their salary depends on them not understanding it." This explains why many advisors promote bucket strategies and time segmentation plans despite their inefficiency—they're selling what clients can understand, not what best serves their financial futures.
The DIY investor's advantage is clear: we can focus on data first and psychology second. Your financial behaviors should align with your goals—if you want to spend more in retirement, you need a portfolio designed for that purpose, not just psychological tricks to feel comfortable underspending.
Want to make better financial decisions? Stop trying to predict the future. Adopt a decade-long perspective instead of obsessing over current conditions. Remember that rebalancing works over time due to Shannon's Demon—the mathematical reality that regularly rebalanced diverse assets outperform in the long run.
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In this episode we answer emails from Dave, Mike, and Andy. We discuss an inherited IRA, 529s, how historical data provides more reliable investment guidance than simulated data based on crystal balls, particularly when considering economic environments and asset correlations, and the Rock & Roll Hall of Fame. Cleveland Rocks!
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donations: Donate - Father McKenna Center
Listener Blog Post Describing Risk Parity Concepts And Four Quadrant Model: 15 Uncorrelated Assets | SSiS
Bridgewater Research Paper: Bridgewater Paper 2009.12 AW Info Pack.doc (granicus.com)
Rock & Roll Hall of Fame Exhibit: SNL: Ladies & Gentlemen...50 Years of Music | Rock & Roll Hall of Fame
Breathless Unedited AI-bot Summary:
What happens when you try to predict market outcomes using simulated data rather than historical performance? Frank tackles this profound question by explaining why many investment simulations fail to capture the fundamental reality of how assets behave in different economic environments.
Using a brilliant weather metaphor, Frank demonstrates why you "cannot have a drought and rainstorms at the same time" – just as you cannot simultaneously experience a recession and inflation. This insight explains why historical data, which shows how assets perform in specific economic conditions, provides more reliable guidance than simulations that treat each asset class as an independent variable.
The episode also addresses practical financial concerns, including strategies for managing inherited IRAs subject to the 10-year distribution rule and approaches to college savings that balance tax advantages with flexibility. Frank shares his personal approach of using 529 plans primarily for state tax benefits while maintaining additional education funds in more accessible accounts.
Weekly portfolio reviews reveal nearly all asset classes in positive territory this year, with gold shining brightest at +28.47% YTD. This unusual pattern reflects a weakening dollar, demonstrating how macroeconomic conditions influence asset performance across the board. The episode's exploration of base rates in forecasting also explains why predictions based on historical probabilities typically outperform crystal ball prognostications that assign outsized probabilities to possibilities rather than focusing on known patterns.
For investors seeking to build robust portfolios for uncertain times, this episode offers invaluable perspective on understanding economic environments, recognizing asset correlations, and using historical data to prepare for different market conditions. Listen now to discover why the lessons of market history may be your most reliable investment guide.
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In this episode we answer emails from Evan, James and Brandy. We discuss the joys of more cowbell from first principles and its origin story, a recent back-and-forth between Karsten and Tyler, the inherent problems with trying to massage data with crystal balls and what it's really revealing about the shortcomings of a basic 75/25 portfolio, some nuggets from Bill Bengen's new book, and some musings about bitcoin and gold.
Links:
Early Retirement Now Article: Can we increase the Safe Withdrawal Rate with Small-Cap Value Stocks? – SWR Series Part 62 - Early Retirement Now
Portfolio Charts Response: The Human Complexities of Correcting the Record – Portfolio Charts
Bill Bengen's New Book | A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.
Lyn Alden Talk: Nothing Stops This Train w/ Lyn Alden | Bitcoin 2025
RSSX Fund: ReturnStacked® U.S. Stocks & Gold/Bitcoin ETF
Breathless Unedited AI-Bot Summary:
What makes a truly optimal retirement portfolio? The conventional wisdom suggesting a simple 75% S&P 500 and 25% bond allocation deserves serious reconsideration according to mounting evidence from multiple sources.
Bill Bengen, creator of the original 4% withdrawal rule, has published a groundbreaking new book that challenges long-held assumptions about retirement spending. By incorporating a more diversified approach—including US large, small, mid-size, and micro-cap stocks alongside international equities and treasury bonds—Bengen demonstrates that safe withdrawal rates could potentially reach 4.7% or higher. When accounting for current inflation levels, he suggests rates between 5-5.5% might be sustainable with properly diversified portfolios.
The historical data speaks volumes. When examining performance during the worst possible retirement starting years (1929, 1960s, 1972-73, 1999-2000, 2008-09), portfolios with value tilts or alternative assets consistently outperformed simple index-based approaches. This critical finding undermines the narrative that concentration in broad market indexes represents the safest approach for retirees who actually need to spend from their portfolios.
We also explore Bitcoin's potential role in modern portfolios, examining its correlation with technology stocks and questioning whether it functions as a true diversifier. Unlike gold, which maintains near-zero correlation with equity markets, Bitcoin increasingly moves in tandem with growth stocks as institutional adoption increases. This distinction matters significantly for investors seeking stability rather than speculation. New financial products like RSSX are emerging to capitalize on this dynamic, combining stocks, gold, and Bitcoin with adjustments based on relative volatility.
The fundamental question isn't about maximizing theoretical returns or terminal wealth, but about constructing portfolios that reliably provide income through various market conditions. A well-diversified approach has historically delivered better outcomes for those spending from their portfolios than simple stock/bond splits—aligning with Bengen's philosophy of spending more and enjoying retirement rather than dying with maximum wealth.
Looking to refine your retirement strategy? Send your questions to frank@riskparityradar.com or visit riskparityradar.com to join the conversation.
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In this episode we answer emails from Postmaster, John, and Patrick. We discuss the ins and outs of managed futures, the outs of international bonds and currency funds, and Risk Parity Chronicles. Reborn!
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donations: Donate - Father McKenna Center
Demystifying Managed Futures Article: Demystifying Managed Futures
DBMF Video (and link to YouTube channel): DBMF in Four Minutes
Morningstar Article re Alternatives: How ETF Diversifiers Performed During Market Turmoil | Morningstar
Summary: “The Misbehavior of Markets”. A Fractal View of Risk, Ruin, and Reward by Benoit Mande
Risk Parity Chronicles Shannon's Demon Article: Shannon's Demon Explainer - by Justin
RPC Article re Rebalancings: Does threshold rebalancing work with leveraged funds?
RPC Portfolios: Overview of the RPC Portfolios - by Justin
RPC Subscription Link: Risk Parity Chronicles | Justin | Substack
Breathless Unedited AI-Bot Summary:
Ever wondered how managed futures work and why they're becoming increasingly popular in diversified portfolios? This episode delivers a comprehensive explanation of these powerful but often misunderstood investment vehicles.
Managed futures use trend-following strategies (academically called "time series momentum") to profit from price movements across commodities, currencies, interest rates, and equity indexes. Dating back to the 1960s, these strategies challenge efficient market theory by capitalizing on the observation that when prices start moving in a direction, they often continue that trajectory for extended periods.
What makes managed futures particularly valuable is their complete lack of correlation with traditional assets like stocks and bonds, combined with their positive skew. Unlike stocks that "go up the stairs and down the elevator," managed futures typically deliver modest returns during normal markets but can produce extraordinary gains during extreme market environments - precisely when conventional investments struggle most. This unique return profile was on full display in 2022 when many managed futures funds gained 20-30% while both stocks and bonds suffered.
The democratization of managed futures through ETFs like DBMF, KMLM, and newer offerings from Fidelity and BlackRock has made these institutional-quality strategies accessible to everyday investors at reasonable costs. DBMF, in particular, uses an innovative replication approach to match the performance of the Société Générale CTA Index, functioning somewhat like a Vanguard for the managed futures space.
We also discuss why international bond funds make less effective diversifiers than managed futures, share exciting news about the return of Risk Parity Chronicles blog, and review the performance of our eight sample portfolios.
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In this episode we answer two emails from John and one from Pete. We revel in John's summary of the podcast from its humble beginnings to its current form, his sailboat analogy to portfolio construction and his highly humorous questions. We also discuss two common but conflicting investor biases: rejecting assets because they've performed poorly recently or because they've performed too well recently and discuss rebalancing rules for leveraged funds and the newer managed futures fund CTA.
Links:
Listener Blog Post Describing Risk Parity Concepts: 15 Uncorrelated Assets | SSiS
Pete's Testfolio Rebalancing Analyses: testfol.io/?s=k6HKskV4lsy
Testfolio CTA Analysis: testfol.io/analysis?s=9WzkwrOUa0h
Breathless Unedited AI-Bot Summary:
The evolution of Risk Parity Radio takes center stage as we dive into a fascinating listener journey through 445 episodes of financial wisdom and soundbite mayhem. From our humble COVID-project beginnings to developing signature elements like standardized soundbites, cowbell references, and charitable partnerships, this episode offers a rare look at how the podcast has grown alongside its community.
A brilliant sailing analogy perfectly captures the essence of risk parity investing: just as skilled sailors can make forward progress in various wind conditions by using the right sails, diversified portfolios can navigate different economic environments by including assets that perform well under specific conditions. This metaphor elegantly explains why we emphasize creating all-weather portfolios rather than attempting to predict market movements.
Gold's dramatic turnaround provides a perfect case study in investment humility. In late 2022, some listeners questioned including gold, calling it a "waste of space" that wasn't fulfilling its purpose. Fast forward to 2025, and gold delivered an impressive 28% compound annual growth rate. This example highlights a common cognitive trap: rejecting unfamiliar assets either because they've performed poorly recently ("must be done forever") or because they've performed too well ("must be too high to invest in now").
We also explore technical questions about rebalancing strategies for portfolios containing leveraged ETFs and observations about managed futures funds, demonstrating how complex portfolio management requires thoughtful consideration beyond simple formulas.
Whether you're a longtime listener appreciating the walk down memory lane or a newcomer curious about our approach to investing, this episode delivers valuable insights about portfolio construction while maintaining our characteristic blend of education and entertainment. Ready to dive deeper? Subscribe now and join our community of thoughtful DIY investors!
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In this episode we answer emails from Ian, Bruce and Boone. We discuss dealing with a 401k with limited options, the limitations of the ticker symbol analyzers of Portfolio Visualizer and incorporating individual stocks into a retirement portfolio, and limitations and developments in leveraged ETF land.
Note: No podcast this upcoming weekend as Frank and Mary will be on hiatus. Check out Frank's recent interview on the Mile HI FI podcast for more insights and a scintillating discussion about cooked green vegetables.
Links:
Optimized Portfolio Website: Leverage | Optimized Portfolio
Testfolio Website: testfol.io
Value Stock Geek Website: Security Analysis | Value Stock Geek | Substack
Mile Hi Fi Podcast: You Should Spend More (Probably) - Frank Vasquez | MHFI 279 | Mile High FI Podcast
Breathless Unedited AI-Bot Summary:
Frank Vasquez dives into the practical realities of implementing risk parity principles within common investment constraints in this illuminating Q&A session. Drawing on his wealth of experience, Frank tackles three distinct listener questions that reveal the gap between theoretical investment strategies and their real-world application.
When confronted with a listener's limited 401k options, Frank demonstrates how to make pragmatic choices while staying true to risk-conscious investing principles. Rather than abandoning risk parity altogether, he suggests practical compromises using available funds for the short term, with plans to transition to a more ideal allocation after retirement. This advice brilliantly showcases how financial independence seekers can adapt sophisticated strategies to work within institutional limitations.
The conversation takes a fascinating turn as Frank debunks misleading backtest results from Portfolio Visualizer, explaining why recent market conditions might create dangerously optimistic expectations about individual stock performance. With characteristic humor, he guides listeners away from recency bias and toward sound portfolio construction principles that prioritize asset allocation over security selection.
Perhaps most valuably, Frank explores the complex world of leveraged ETFs, demystifying why products like UPRO and TMF rarely achieve their stated multiplication factors over extended periods. His careful analysis of these sophisticated tools, along with newer innovations like return-stacked ETFs, provides crucial perspective for investors considering these instruments for retirement planning.
Throughout the episode, Frank balances technical expertise with accessibility, using cultural references and humor to make complex concepts digestible. His commitment to evidence-based investing shines through as he consistently reminds listeners to focus on risk management, broad diversification, and long-term thinking rather than chasing recent performance or market timing.
Have questions about implementing risk parity in your own portfolio? Email Frank at frank@riskparityradio.com or visit riskparityradio.com to learn more about building resilient investment strategies that can weather any market environment.
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In this episode we break rules and have guests! Dennis and Ben from the Father McKenna Center. We review the fabulous results of the Top of the T-Shirt Campaign and reflect on the generosity engagement of our listeners.
Then we answer emails from Jamie, Camille and Jon. We discuss Jamie's portfolio experiments, bond allocations in a 403b, musing about changes in the reserve currency status of the US Dollar and transitioning issues.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Jamie's Portfolio Analyses: https://testfol.io/?s=jusQGGadC9P
Breathless Unedited AI-Bot Summary:
What happens when a finance podcast community rallies around a worthy cause? Something extraordinary. In this special episode, we break our "no guests" rule to welcome Dennis D and Ben Hoffschneider from the Father McKenna Center, where they share the remarkable story behind our recent fundraising campaign.
Dennis's journey will stop you in your tracks – from arriving at the center homeless after a 24-hour bus ride from Florida to eventually becoming its Executive Director. His powerful testimony shows how organizations like the McKenna Center transform lives daily. When our listener "Matthew63" stepped forward with a $15,000 matching challenge, none of us expected what would follow.
The results left everyone speechless: $60,969.83 raised (yes, down to the penny) from approximately 100 donors across the country. This campaign now represents 4% of the center's annual budget and has become their leading donor source for the fiscal year. As we reflect on Theodore Roosevelt's famous "Man in the Arena" speech, it becomes clear who the true warriors are – those doing the daily work with limited resources to address homelessness and food insecurity.
After our interview, we tackle several listener questions about portfolio construction. Jamie wonders about using VXX and SCO as bond replacements, Camille seeks guidance on holding treasury bonds in retirement accounts, and John asks about transitioning from target date funds to a more diversified approach. We close with our weekly portfolio review, noting gold's continued strong performance up 27.83% year-to-date.
Want to support the Father McKenna Center's work? Register for their Walk for McKenna on September 27th or follow them on social media to see your donations in action. The t-shirts featuring our logo will be available mid-September – a small reminder of what we can accomplish together.
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In this episode we answer emails from Thirsty Horse, Graham, Chris, Oberon, Ronald and Mark. We discuss their personal progress with finances and better relationships, books about that and thriving, treasury bond funds, choosing volunteering and charitable opportunities, and sample portfolio dividends and interest.
Campaign update: Top of the T-Shirt fundraiser for Father McKenna Center closing July 31!
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Testfolio Comparison of VGLT, TYA and GOVZ: testfol.io/analysis?s=4bAJZXAObDD
Breathless Unedited AI-Bot Summary:
The journey from wealth accumulation to meaningful spending is perhaps one of the most challenging psychological transitions in personal finance. In this thought-provoking episode, we explore the mental barriers that prevent even financially successful people from fully enjoying their hard-earned freedom.
Through several listener stories, we witness the transformative power of risk parity principles not just as investment strategies, but as confidence-building frameworks that empower life changes. One listener shares how implementing these concepts gave them the security to leave a high-paying career for more purposeful work. Another reveals their struggle with "optimization addiction" - postponing experiences like concerts and travel while continuing to accumulate unnecessary wealth.
This episode delivers practical wisdom on finding balance between financial security and life enjoyment. We discuss recommended books for navigating the retirement mindset transition, including Bronnie Ware's "Five Regrets of the Dying" and Arthur Brooks' work on finding purpose in life's second half. For those interested in the technical side, we examine treasury bond strategies during recessionary environments, comparing performance across different instruments.
Perhaps most valuably, we explore how to select meaningful charitable causes that align with your skills and passions. The Father McKenna Center campaign illustrates how financial independence can create opportunities for impact beyond personal wealth.
Ready to shift from obsessing over your portfolio to embracing life's experiences? This episode might just give you the perspective shift you need. Remember: winning the financial game is just the beginning – learning to actually play it is where true fulfillment begins.
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In this episode we celebrate some milestones and answer emails from Amy and John. We discuss the 10-year anniversary of Portfolio Charts, our one millionth download and Mary's good news about her CASA work. Then we talk about the parable of the Starfish Thrower, go on requested rant about personal finance hoarding cultures and financially privileged people looking for pats on the head and their willing AUM facilitators, and talk about how real happiness and legacies are created.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Charts 10-year Anniversary Post: Celebrating 10 Years of Portfolio Charts – Portfolio Charts
Narrative Psychology: How to tell stories that give you meaning | Jane Goodall, Terry Crews & Dan McAdams
Parable of the Starfish Thrower: Starfish Story (aka The Star Thrower)
ChooseFI Pod #508: 508 | 5% SWR, Revealed Preferences, and the 3 Stories | Frank Vasquez
Bringing Up The Baileys: Melissa Bailey (@bringingupthebaileys_) • Instagram photos and videos
Come And Get It: Comeandgetit | Facebook
Breathless AI-Bot Summary:
What does it mean to create a meaningful legacy? Is it the money you leave behind, or something far more valuable that transcends financial wealth?
As we celebrate our millionth podcast download and the 10th anniversary of Portfolio Charts—a revolutionary tool that transformed how DIY investors analyze diverse assets—we're reflecting on what truly matters in personal finance and beyond. The real highlight comes from Mary's work as a Court Appointed Special Advocate, where after three years of dedicated advocacy for five children in foster care, four were adopted into the same loving home. This embodiment of the "Starfish Thrower" parable reminds us that while we can't save everyone, making a difference for even one person creates ripples of meaningful change.
We take a hard look at the wealth inequality permeating financial media, where those with millions often dominate conversations while seeking validation for their already-secure positions. This echo chamber creates distorted priorities and revealed preferences toward death-focused wealth accumulation rather than life-focused enjoyment. In contrast, we share the story of Melissa—a woman who overcome tremendous hardships including foster care and the loss of a child, yet leads a joy-filled life despite financial constraints. Her legacy isn't measured in money but in traditions passed between generations while everyone is still alive.
Our portfolio reviews show mostly positive performance across various investment strategies, but the numbers pale in comparison to the real message: wealth isn't just what you have, but what you do with it. Whether you're struggling financially or blessed with abundance, your impact on others will always be your most valuable asset.
Join us as we explore what it means to live richly—not just by accumulating wealth, but by creating meaning. How will you throw your starfish today?
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In this episode we celebrate Ozzy Osbourne and answer emails from Iron Tony, Ben and Robbin. We discuss some of the charts at Portfolio Charts and some related research, the unexpected problems of complex trusts and the value of simplifying estate planning by giving money away while you are alive and balancing treasury bonds, gold, and equity allocations to create resilient portfolios.
If you'd like to move to the front of the email line, please consider donating to the Father McKenna Center at fathermckennacenter.org or through the support page at riskparityradio.com.
Links:
Portfolio Charts Page O' Charts: Charts – Portfolio Charts
Portfolio Charts Golden Ratio Article: Beautiful Constants and the Golden Ratio Portfolio – Portfolio Charts
Jim Sandidge Chaos Paper: RMJ081-ChaosAndRetirementSecurity.pdf
Dana Anspach Presentation (watch minutes 17 - 59): How to Turn Investments into a Retirement Paycheck in 2023
Testfolio Comparison of TLT and VGLT: https://testfol.io/analysis?s=dGUGRbj009N
Breathless Unedited AI-Bot Summary:
Season 6 kicks off with a deep dive into the powerful analytical tools at Portfolio Charts that can transform how you evaluate investment strategies. Frank unpacks essential charts like Withdrawal Rates and Drawdowns, revealing why understanding a portfolio's behavior during market stress matters more than chasing maximum returns. Through clear explanations and vivid analogies, he demonstrates how risk parity approaches function as the Toyota 4Runners of investment strategies—reliable, versatile, and designed for challenging conditions.
The conversation shifts to a listener's complex trust situation, sparking a thoughtful examination of estate planning pitfalls. Frank offers a compelling perspective on legacy planning: rather than creating elaborate structures meant to preserve wealth indefinitely, consider simpler approaches that benefit heirs during your lifetime and avoid unintended family conflicts. His personal approach of allocating roughly 1% of his annual portfolio withdrawals to giving provides a practical model for balancing financial security with meaningful impact.
Finally, Frank addresses portfolio construction fundamentals, explaining why Treasury bonds serve as essential "recession insurance" and how to balance them with other assets like gold and equities. He emphasizes that even historically strong performers like gold can experience decade-long drawdowns, reinforcing the need for true diversification across asset classes that respond differently to varying economic conditions.
Whether you're new to risk parity investing or refining your existing strategy, this episode delivers valuable insights for creating a resilient portfolio designed to weather market uncertainty while supporting your long-term financial goals. Have questions about your own investment approach? Send them to frank@riskparityradio.com or use the contact form at riskparityradio.com.
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In this shocking, season-ending episode we answer an email from another generous and Nameless listener regarding a levered portfolio for Nameless, Jr., their omnipotent baby in waiting. We also have fun with Fibonacci numbers.
And THEN we do our annual rebalancings of the first four sample portfolios you can find at Portfolios | Risk Parity Radio. And we also do our weekly portfolio reviews.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Bigger Pockets Money Podcast #1: The Secret to a 5% Safe Withdrawal Rate | Frank Vasquez
Bigger Pockets Money Podcast #2: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
All Seasons Portfolio Write-Up: All Seasons Portfolio – Portfolio Charts
Golden Butterfly Portfolio Write-Up: Golden Butterfly Portfolio – Portfolio Charts
Golden Ratio Portfolio Write-Up: Golden Ratio Portfolio – Portfolio Charts
Breathless Unedited AI-Bot Summary:
A foolish consistency may be the hobgoblin of little minds, but financial consistency through strategic portfolio rebalancing is the cornerstone of successful long-term investing. Welcome to Episode 439 of Risk Parity Radio, where we're tackling our annual portfolio rebalancing ritual with a healthy blend of investment wisdom and pop culture quips.
After sharing highlights from recent appearances on the BiggerPockets Money podcast where I guided host Mindy through constructing a risk parity portfolio using the golden ratio, we dive into an extraordinary listener story. TheNamelessOne made a mathematically beautiful donation of $5,321.10 to the Father McKenna Center—a reverse Fibonacci sequence that brilliantly connects to our golden ratio portfolio construction methods.
The market snapshot reveals gold shining brightest in 2023, up over 27% year-to-date, significantly outperforming both the S&P 500 and NASDAQ 100. This performance pattern creates the perfect scenario for demonstrating the discipline of rebalancing—systematically selling high (primarily gold across all portfolios) and buying low (particularly Treasury bonds and small cap value).
Each of our four sample portfolios gets the rebalancing treatment, with the Golden Butterfly standing tall at 43.16% return since inception while maintaining sleep-at-night stability. For those fascinated by the mathematical underpinnings, I explore how the Fibonacci sequence approaches the golden ratio (approximately 1.618), creating natural proportions that translate beautifully to portfolio construction.
Beyond the standard portfolios, we venture into experimental leveraged territory—not recommended for beginners but fascinating for understanding how different approaches perform through market cycles. The stark contrast between our worst performer (Aggressive 50-50, down 11.37% since inception) and our best (Golden Butterfly) offers powerful lessons in risk management.
Whether you're a math enthusiast, movie quote afficionado, or serious DIY investor, this episode delivers practical rebalancing strategies while maintaining that distinctive Risk Parity Radio blend of education and entertainment. Your portfolio might march to the beat of a different drummer, but that's precisely what makes risk parity so fascinating.
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In this episode we answer emails from Brian, Gary and Rob. We discuss the foibles of follies of attempting to market-time gold, the fundamental problems of trying to use TIPS as inflation "hedges" in a diversified portfolio and the limited circumstances in which they make sense, introducing children to financial topics, and tax considerations in making portfolio transitions.
Please remember to check out our alternative website design by clicking "Alt Site" at the top right of riskparityradio.com and send your feedback to frank@riskparityradio.com.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Bill Bernstein TIPS Ladder Article ("A bond fund manager recently related to me his difficulty in figuring out the role of TIPS in his portfolios. After fumbling for a reply, I realized that he was right: like Social Security, they don’t occupy a formal slot in most folks’ asset allocation."): Riskless at Age 104 - Articles - Advisor Perspectives
Once Upon A FI Book: Once Upon a FI by Paul Mollenkopf | Discover Financial Wisdom Today
Analysis of LTPZ (-31.68% in 2022 -- "that's not an improvement!"): LTPZ – PIMCO 15+ Year US TIPS ETF – ETF Stock Quote | Morningstar
Breathless AI-Bot Summary:
Ever found yourself frozen by investment indecision? In this illuminating mailbag episode, we tackle three pressing questions from listeners who've generously supported the Father McKenna Center.
First, we address the common dilemma of gold market timing. When prices seem high, should you wait for a pullback or stick to your long-term plan? The answer lies not in crystal ball predictions but in understanding the purpose gold serves in your portfolio across decades, not months. Rather than trying to outsmart the market, consider transitioning gradually into your desired allocation—whether that means buying now or implementing a systematic approach over time.
The conversation then pivots to one of investing's most misunderstood instruments: Treasury Inflation-Protected Securities (TIPS). Despite their reputation as inflation hedges, the data tells a different story. We examine why TIPS have consistently disappointed during both inflationary and deflationary environments, dragging portfolios down precisely when protection was most needed. For investors seeking genuine inflation buffers, we explore alternatives that have historically outperformed during inflationary periods, including managed futures, commodities, and certain equity sectors.
Perhaps most valuable is our discussion about raising financially literate children. Rather than forcing concepts on uninterested young minds (a strategy that often backfires), we suggest meeting children where they are developmentally. From opening teen brokerage accounts to creating opportunities for learning about buyer's remorse with small amounts of money, these practical approaches help children develop healthy relationships with finances without overwhelming them.
We conclude with tax-efficient portfolio rebalancing strategies, demonstrating how to reduce overconcentrated positions without triggering massive tax bills. By identifying specific tax lots, directing new investments strategically, and managing dividend reinvestments, investors can gradually transform their allocations while minimizing the tax impact.
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In this episode we answer emails from Ron, Michael, Jaime and Clare. We discuss all the generosity bestowed on us and our charity, including the McKenna Man portfolio, a listener's personal portfolio and two-year experience, portfolio longevity issues and common myths thereabout, tax considerations and how to really enjoy retirement after accumulation.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Michael's Portfolio (unlevered) vs. a 70/30 since 2022: testfol.io/?s=fW46hjKw65M
Breathless AI-Bot Summary:
Money can buy you more wealth, but it can't buy you more time. This fundamental truth frames our deep dive into the stories of listeners who've transformed their financial futures through risk parity investing.
We begin with Ron's creative McKenna Man Portfolio – a 100% equity allocation that makes quarterly charitable distributions while still growing steadily. Michael shares his journey from traditional investing to a risk parity approach that delivers impressive returns with dramatically lower volatility, proving these principles work in real-world applications.
The heart of this episode tackles a question many struggle with: how to plan for extremely long retirement periods of 50+ years. Contrary to popular fear-mongering that suggests dramatically lower withdrawal rates, we explore research showing withdrawal rates tend to flatten over extended timeframes. Variable withdrawal strategies that adjust based on actual spending needs rather than rigid CPI increases can support withdrawal rates only slightly lower than traditional 30-year plans. For those concerned about longevity risk, slight adjustments to equity allocations or implementing rising equity glide paths provide additional security without sacrificing quality of life.
Perhaps most powerful is Claire's story of transitioning to a work-optional lifestyle at 56, using risk parity principles to escape a high-pressure career and create space for relationships and experiences. Her wisdom cuts through financial noise with crystal clarity: "Don't worry about running out of money, worry about running out of time."
When we reflect on Bronnie Ware's "Five Regrets of the Dying," none involve wishing for more wealth. They center on authentic relationships, self-expression, and allowing more happiness – precisely what proper financial planning should ultimately enable. The purpose isn't maximizing wealth, but confidently answering "how much is enough" so you can stop playing the accumulation game and start truly living.
What would your life look like if financial fears no longer dictated your choices? Join our community at riskparityradio.com to continue the conversation.
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In this episode we explore one big long answer to an email from Bob about why people refuse to spend money in retirement despite having more than adequate resources. We touch on the math and psychology of the Possibility Effect and how to use Base Rates to overcome that, what the numbers say you really should be afraid of, how to break down expenses to alleviate fears and the real underlying problem in many cases, which is not fear, but personal identity rooted in "Frugality Inertia."
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Books Referenced:
"The Top Five Regrets of the Dying" by Bronnie Ware
"Falling Upward" by Richard Rohr
"Strength to Strength" and "Build The Life You Want" by Arthur Brooks
"The Second Mountain" by David Brooks
"The Soul of Wealth" by Daniel Crosby
"The Art of Spending Money" by Morgan Housel
"Die With Zero" by Bill Perkins
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Morgan Housel Podcast: The Morgan Housel Podcast, Episode 1: The Art of Spending Money
Narrative Psychology: How to tell stories that give you meaning | Jane Goodall, Terry Crews & Dan McAdams
ChooseFI Pod #508: 508 | 5% SWR, Revealed Preferences, and the 3 Stories | Frank Vasquez
Four Idols Video: https://tinyurl.com/4vua3eb2
Satisficing: Satisficing - Wikipedia
Breathless AI-Bot Summary:
This episode tackles the psychology behind the "golden coffin" phenomenon – wealthy retirees who maintain sub 3% withdrawal rates, essentially ensuring they'll die with maximum assets. While justified as prudent planning, the real barriers to enjoying retirement wealth are more complex and fascinating.
We dive into cognitive science, exploring how the "possibility effect" (identified by Kahneman and Tversky) distorts our risk perception. Your brain amplifies the tiny probability of running out of money while downplaying the vastly higher probability of running out of time. A 55-year-old man has an 11.3% chance of dying within 10 years – yet many obsess over financial scenarios with less than 1% probability of occurring.
Beyond cognitive biases lies an identity crisis. Many successful investors have spent decades defining themselves through wealth accumulation. This "frugality inertia" becomes so embedded in self-image that spending feels wrong, even when mathematically sound. The financial services industry exploits these fears, selling products that promise impossible certainties while encouraging hoarding behaviors.
The solution? Reframing retirement spending around four evidence-based wellbeing categories: relationships, experiences, work avoidance (paying for freedom from tedious tasks), and giving. These categories reliably generate happiness returns far superior to watching account balances grow. For those struggling to make this psychological transition, books like "Falling Upward" (Rohr), "Strength to Strength" (Brooks), and "The Soul of Wealth" (Crosby) provide frameworks for evolving beyond accumulation as life purpose.
What retirement story are you living? The miser who dies rich but unfulfilled, or the transformed Scrooge who discovers generosity's joy? The choice defines not just your retirement, but your legacy.
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In this episode we answer emails from Tracy, Mike and "Some Call Me" Tim. We discuss the speculations and gambles of Forex, portfolio transitions, the Vanguard Market Neutral Fund and moving overseas. And we have a mystery guest reader!
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Catching Up To FI Website: Financial Independence - Catching up to FI
VMNFX Testfolio Comparative Analysis: https://testfol.io/analysis?s=eFgblWT8SJO
VMNFX Home Page: VMNFX-Vanguard Market Neutral Fund Investor Shares | Vanguard
Morningstar VMNFX: VMNFX – Vanguard Market Neutral Inv Fund Stock Price | Morningstar
Breathless Unedited AI-Bot Summary:
Navigating the complex world of personal finance often means confronting tough questions about investments we don't fully understand, partners who approach money differently, and life transitions that demand portfolio adjustments. This episode dives deep into three listener questions that illuminate these challenges.
When Tracy's husband becomes deeply invested in forex trading despite a significant loss, she makes the bold decision to split their investment portfolios. This raises fascinating questions about marriage, money, and risk tolerance. Frank unpacks the reality of forex trading, explaining why it's neither an investment nor typically suitable for most individual investors. Drawing from his own trading experience in the 1990s, he distinguishes between disciplined speculation and outright gambling, offering clarity for anyone tempted by the allure of currency trading. As Tracy approaches her financial independence number, Frank provides thoughtful guidance on transitioning from an accumulation portfolio to a more conservative allocation while markets remain strong—wisdom applicable to anyone approaching their financial goals.
The exploration continues with an analysis of Vanguard's Market Neutral Fund, revealing how even traditional investment companies offer alternative strategies that many investors overlook. While this long-short fund provides impressive diversification benefits, its lackluster returns highlight the trade-offs investors must consider when pursuing uncorrelated assets. For listeners curious about expanding beyond conventional index funds, this segment offers valuable perspective on evaluating alternative investments.
Finally, for those contemplating international moves while managing US retirement accounts, Frank provides practical advice that cuts through confusion. By focusing on investment fundamentals rather than geographical considerations, he reminds us that solid financial principles transcend borders. Whether you're wrestling with a spouse's different investment philosophy, considering alternative assets, or planning an international life change, this episode delivers insights to help navigate your financial journey with confidence and clarity.
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In this episode we answer a question from Ness. We have fun with The Untouchables, retirement clubs, Portfolio Visualizer and many other things.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
To donate to the Top of the T-Shirt campaign and double your fun, please visit the Father McKenna Center donation page and note "Risk Parity Radio Match" when making your contribution.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Charts Free Charts: Charts – Portfolio Charts
Portfolio Visualizer Tutorial Video: Tutorial #4: Portfolio Visualizer Monte Carlo Simulator -- Introduction
Retirement Answer Man Case Study Podcast (start at minute six): I Just Lost My Job. Can I Retire Now?
Portfolio Visualizer Simulation #1: https://tinyurl.com/yuev3s59
Portfolio Visualizer Simulation #2: https://tinyurl.com/kjy5ur7n
Portfolio Visualizer Simulation #3: https://tinyurl.com/yc2rstr7
Breathless Unedited AI-Bot Summary:
Tired of retirement planning approaches that feel more like crystal ball gazing than strategic analysis? In this episode, we demystify the often-confusing world of retirement planning tools and techniques, revealing how to achieve better results without expensive software or club memberships.
We dive deep into how free tools like Portfolio Visualizer can perform sophisticated retirement planning when used correctly – specifically by analyzing asset classes rather than ticker symbols. This approach not only provides access to decades of historical data but creates a more robust foundation for retirement decisions than the parameterized returns many paid services rely upon.
Through a detailed case study, we demonstrate how a risk parity-style portfolio improved a retirement plan's success rate from 85% to 96% compared to a traditional 60-40 portfolio. This significant enhancement required no additional savings or lifestyle changes – just smarter portfolio construction based on proven diversification principles that many financial advisors haven't incorporated into their practices.
The episode also examines retirement clubs that charge $600-900 annually, questioning whether their financial planning guidance justifies the cost when their approaches often lag behind current best practices. While these clubs may offer valuable social connections and psychological support for the transition to retirement, their portfolio construction recommendations frequently default to outdated models followed by excessive "padding" rather than optimization.
For DIY investors, we provide practical guidance on using free or low-cost tools like Portfolio Charts' heat map to stress-test portfolios and identify maximum drawdown periods – crucial information that many expensive planning tools don't clearly reveal. This approach helps you build true resilience into your portfolio structure rather than compensating for mediocre construction with excessive cash reserves.
Ready to take control of your retirement planning with sophisticated tools that won't cost you hundreds of dollars? Listen now to discover how to analyze your portfolio like a pro and potentially improve your retirement outcomes without paying for expensive software or memberships.
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In this episode we answer questions from Mason, Brian, and Anonymous. We discuss portfolio transitions from a highly overlapped portfolio and related consideration, treasury strips funds and leveraged ETFs (twice), and the power of advice from the great Jim Rohn. UNLIMITED POWER.
Just remember that "Affirmation without discipline is the beginning of delusion."
And we discuss our campaign for the Father McKenna Center and Quebecois updates to our website.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
The Source of the "We Don't Know" Clip: Jim Rohn Join the 3% Club and Walk away from the 97%
Breathless Unedited AI-Bot Summary:
Transforming your portfolio into a risk parity approach doesn't have to be complicated, but it does require both strategy and courage. This episode dives deep into listener questions about making that transition while navigating tax implications and psychological barriers.
When Mason asks about converting his advisor-built collection of funds into a risk parity portfolio, Frank reveals a crucial insight most investors miss: holding multiple similar funds creates "false diversification." Those four large-cap funds in your portfolio? They're basically the same investment with different names. True diversification comes from understanding what's inside each fund, not collecting different tickers.
For those curious about leveraged ETFs like UPRO, Brian's question leads to fascinating observations about why some leveraged products perform better than others. The conversation reveals why Treasury strips funds like GOVZ/ZROZ make reasonable substitutions for standard Treasury allocations, while leveraged gold ETFs might be problematic for long-term investors. Frank shares his personal experience reducing his own UPRO allocation and explains why experimentation with small portions of your portfolio is the wisest approach to newer investment strategies.
The philosophical foundation of the show emerges when a listener asks about the "Nobody Knows" sound clip. The attribution to motivational speaker Jim Rohn opens a window into the mindset that drives successful investing. Rohn's philosophy that "affirmation without discipline is the beginning of delusion" perfectly captures why just thinking about better investment outcomes isn't enough—you must take action to create them.
Ready to reshape your investment approach? This episode provides both the practical steps and the motivational spark to move forward confidently. As Rohn reminds us, "If you think investing is risky, wait till you get the tab for not investing."
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In this episode we answer emails from Isaiah, Jack, Jon and Luke. We discuss preliminary transition issues and de-risking, Jack's "25 x 4" risk parity style portfolio, Invictus and similar themes, treasury bonds and gold as co-diversifiers and ESG funds. And revel on how we Tom Sawyer'ed Paula Pant into creating a nice 'Risk Parity Portfolio Blueprint" for us.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
To donate to the Top of the T-Shirt campaign and double your fun, please visit the Father McKenna Center donation page and note "Risk Parity Radio Match" when making your contribution.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Afford Anything Podcast Episode: #618: How to Retire at 50 While Supporting Aging Parents, with Frank Vasquez - Afford Anything
Paula Pant's Risk Parity Radio Blueprint: Frank Vasquez Risk Parity Portfolio Giveaway.docx
Claudia Moise Paper: Flights to Safety, Volatility Risk, and Monetary Policy by Claudia E. Moise :: SSRN
Professor Aswath Damodaran on ESG Funds: The Difficult Truth about ESG Investing with Aswath Damodaran
FRDM Fund: FRDM – Freedom 100 Emerging Markets ETF – ETF Stock Quote | Morningstar
Breathless AI-bot Summary:
What happens when retirement portfolio theory meets real-life investment challenges? In this illuminating episode of Risk Parity Radio, Frank Vasquez responds to listener questions that cut to the heart of creating resilient, diversified portfolios for financial independence.
A military member with six years left before retirement asks how to transition from a heavy equity allocation to a risk parity approach without triggering unnecessary tax consequences. Frank offers practical guidance on using existing retirement accounts to begin de-risking immediately, demonstrating how macro allocation principles can work within institutional constraints. The advice highlights a crucial lesson: reducing overall market exposure takes precedence over perfecting individual asset selections.
The psychological challenges of portfolio construction take center stage when a medical professional shares his "25 by 4" portfolio, showing equal allocations to large cap blend, small cap value, gold, and intermediate treasuries. While validating the approach, Frank addresses the emotional resilience needed when certain assets inevitably underperform for extended periods. This conversation exposes a troubling disconnect between certified financial planning education and practical portfolio construction, particularly regarding gold's vital diversification benefits.
Misconceptions about long-term treasury bonds receive special attention, with Frank explaining why their value in risk parity portfolios transcends historical performance during falling interest rates. Their tendency to show negative correlation with stocks during recessions provides the portfolio protection that enables sustainable withdrawal strategies.
For those interested in values-based investing, Frank challenges the notion that commercial ESG products truly align with personal ethics. His recommendat
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In this episode we answer emails from Luc, Craig, Luke and Lucky. We discuss updating the website, my recent roundtable on the Stacking Benjamins podcast, Achilles heels, and the inherent problems with not using proper forecasting techniques applied to CAPE ratios and other things, new funds like AVUQ and FFUT, and gold versus bonds in a portfolio.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Stacking Benjamins YouTube Live Stream Roundtable: Decumulational Strategies: The Special Retirement Spend Down Strategy Roundtable
Listen Notes Link: Risk Parity Radio (podcast) - Frank Vasquez | Listen Notes
Interview of Bob Elliot on the Compound Podcast: The Blue Chips of Junk | TCAF 175
Morningstar AVUQ: AVUQ – Avantis U.S. Quality ETF – ETF Stock Quote | Morningstar
Breathless Unedited AI-Bot Summary:
What's the real Achilles heel of risk parity investing? It's not what you might expect. While many point to historical data limitations, the true challenge is psychological—accepting lower returns during bull markets in exchange for better protection when everything crashes. This fundamental trade-off defines the strategy's purpose: enabling you to spend more money now rather than maximizing wealth at death.
The forecasting techniques that guide our investment decisions matter tremendously. Drawing from experts like Kahneman, Tetlock, Duke, and Gigerenzer, we explore why base rates (long-term historical averages) consistently outperform crystal ball approaches like CAPE ratios. When investment professionals try predicting market returns based on current valuations, they're often spectacularly wrong—more so than if they'd simply used historical averages. Remember: in forecasting, being less wrong beats being precisely incorrect.
The gold versus bonds debate continues to evolve. Bob Elliott, formerly of Bridgewater, suggests that since abandoning the gold standard in the 1970s, gold has performed as well as or better than bonds as a stock diversifier. While 30% gold allocation might seem excessive to some, it could make sense for those concerned about currency risks. Historical context shows both assets have experienced extended periods of outperformance, making a combined approach more resilient than trying to predict which will shine next.
We've entered a golden era for do-it-yourself investors, with new ETFs constantly emerging to fill specific niches. Avantis recently launched AVUQ for quality growth exposure, while Fidelity introduced FFUT for managed futures—both reflecting growing demand for sophisticated investment options previously unavailable to retail investors.
Don't forget our ongoing campaign supporting the Father McKenna Center for hungry and homeless people in Washington DC. Your donation not only helps those in need but also moves you to the front of our email response line. As we explore these complex investment topics together, we remain committed to freely sharing knowledge rather than hiding it behind paywalls—continuing the spirit of open collaboration that defined the early FIRE movement.
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In this episode we answer emails from I Have No Name, Deep and Joel. We discuss the extraordinary generosity of our listeners and how it uplifts the workers in the FMC trenches, rebalancing in accumulation, tax considerations for an intermediate term portfolio, saving for college, and what to do with new money just a few years from retirement.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
To donate to the Top of the T-Shirt campaign and double your fun, please visit the Father McKenna Center donation page and note "Risk Parity Radio Match" when making your contribution.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
FMC Instagram Page: The Father McKenna Center (@thefathermckennacenter) • Instagram photos and videos
FMC Facebook Page: The Father McKenna Center | Washington D.C. DC | Facebook
Breathless Unedited AI-Bot Summary:
Charitable giving and strategic investing merge powerfully in this week's episode as we celebrate remarkable fundraising success and tackle sophisticated portfolio questions. What began as a modest matching campaign for the Father McKenna Center has exploded into something extraordinary—over $22,000 raised in just two weeks, including a single $15,000 anonymous donation that left me nearly speechless. The genuine impact of this community's generosity on homeless and hungry individuals in DC cannot be overstated.
Diving into listener questions, we explore the nuances of portfolio construction across different life stages. For physicians in their accumulation phase, we distinguish between large cap growth and large cap value when paired with small cap value, revealing how Shannon's Demon effect operates during dollar-cost averaging. The discussion expands into tax-efficient risk parity strategies for high-income earners, offering practical guidance on minimizing taxable events while maximizing returns.
Parents of newborns will appreciate our deep dive into college savings strategies, including the optimal 50-50 large cap growth and small cap value approach that investment educator Paul Merriman and I both recommend. I share tactical insights on 529 plans versus brokerage accounts, suggesting that funding 529 plans earlier in a child's life maximizes tax advantages before transitioning to additional savings vehicles.
For those approaching retirement, we address the critical transition from accumulation to decumulation portfolios, emphasizing that your financial independence number—not market predictions—should drive allocation decisions. The episode concludes with our weekly review of eight sample portfolios, highlighting performance across conservative, balanced, and experimental approaches.
Follow the Father McKenna Center on social media to witness the direct impact of your donations, and consider contributing to our ongoing "Top of the T-shirt" campaign through July. Your support transforms lives while you transform your investment approach.
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In this episode we answer emails from Brent, Peter and Cy. We discuss our Father McKenna Center Top-of-the-T-Shirt Matching Campaign (again), Peter's risk-parity style portfolio in retirement and what to do with new cash coming in, and Cy's small cap value direct indexing experiment.
If you'd like to support the Father McKenna Center and get your questions answered on the show, please donate through the link in the show notes. Every dollar will be doubled through our matching campaign.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Stacking Benjamins YouTube Live Stream Roundtable: Decumulational Strategies: The Special Retirement Spend Down Strategy Roundtable
Hendrik Bessembinder on Rational Reminder Podcast: Episode 346 - Hendrik Bessembinder: Why It's So Hard to Beat the Market — Rational Reminder
Breathless AI-Bot Summary:
Marching to the beat of your own financial drummer doesn't mean ignoring proven investment principles. In this insight-packed episode, I dive into personalized portfolio construction for retirement success while answering thoughtful questions from listeners who've supported our Father McKenna Center charity campaign.
When constructing retirement portfolios, certain parameters consistently enable higher safe withdrawal rates: 40-70% in equities, 15-30% in treasury bonds, 10-25% in alternatives, and less than 10% in cash. We explore how one listener's portfolio elegantly captures these parameters with a 60/40 split tilted toward value and supplemented with gold, managed futures, and preferred shares.
The eternal question of adding international exposure resurfaces as we examine AVDV (international small-cap value) and IDMO (international momentum). While these funds have performed admirably this year—partly due to dollar weakness—I caution against chasing recent performance without long-term commitment. The property and casualty insurance sector (KBWP) similarly warrants consideration for its diversification benefits, having weathered the 2022 downturn admirably.
Perhaps most fascinating is our deep dive into direct indexing small-cap value stocks. One listener's meticulous experiment—complete with profitability screens, debt filters, and rebalancing protocols—illustrates both the potential and the complexity of this approach. I contrast this with Hendrik Bessembinder's research showing that roughly 4% of stocks drive the vast majority of market returns, underscoring why picking individual small-caps presents particular challenges.
For those approaching or in retirement, I offer a counterintuitive perspective on lump-sum cash inflows: sometimes the most efficient approach isn't investing at all, but rather using those funds to cover expenses for several years, potentially reducing tax liability without significantly impacting long-term portfolio growth.
Whether you're crafting your retirement strategy, exploring direct indexing, or optimizing your withdrawal approach, this episode delivers practical insights for aligning your investments with your unique financial journey.
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In this episode we answer emails from Anonymous, Tim, Mark and Luc. We celebrate the overwhelming generosity of our listeners and discuss using risk parity style portfolios for intermediate savings, heavy metal, tax efficient portfolio management, and some investing and retirement resources.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
To donate to the Top of the T-Shirt campaign and double your fun, please visit the Father McKenna Center donation page and note "Risk Parity Radio Match" when making your contribution.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
FIRE Takes Podcast Page: FIRE Takes Podcast
Michael Kitces Page and Resources: Kitces.com - Advancing Knowledge in Financial Planning
Andy Panko Resources: FREE Retirement Planning Education
Cody Garrett Page and Resources: Meet Cody - Measure Twice Financial
Sean Mullaney Page and Resources: The FI Tax Guy – The Tax Efficient Path to Financial Independence
Wade Pfau Book: Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success (The Retirement Researcher Guide Series): Pfau, Wade: 9781945640155: Amazon.com: Books
Ashvin Chhabra Book: Amazon.com: The Aspirational Investor: Taming the Markets to Achieve Your Life's Goals eBook : Chhabra, Ashvin B.: Kindle Store
AQR and Antti Ilmanen: AQR Principal Antti Ilmanen Authors New Book on Investing in a Low-Return Environment
Breathless Unedited AI-Bot Summary:
Have you ever wondered what to do with money that's not for emergencies but not quite for retirement either? Today we tackle the often-overlooked middle ground of intermediate-term savings and reveal why risk parity strategies offer a powerful solution for these "in-between" financial goals.
Most financial advice focuses heavily on either emergency funds or retirement accounts, leaving a significant gap in guidance for money you're saving for goals 3-10 years away. Whether you're planning for a home down payment, vehicle purchase, or building a Roth conversion ladder, the traditional advice to simply park this money in savings accounts is leaving significant opportunity on the table. We explore how portfolios like the Golden Butterfly and Golden Ratio can provide meaningful growth while keeping drawdowns manageable, typically recovering within 3-4 years at most.
Beyond just investment selection, we dive into the tax efficiency of managing these portfolios in taxable accounts. Unlike high-yield savings accounts that generate ordinary income taxed at your highest marginal rate, properly managed risk parity portfolios create opportunities for tax-loss harvesting and strategic rebalancing. We explain how directing new contributions to underperforming assets eliminates the need for selling investments to rebalance, substantially reducing your tax burden while maintaining your desired allocation.
For younger investors, managing an intermediate-term risk parity portfolio serves anoth
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In this episode we answer emails from Katie, Sean, Glen, Anonymous and Kelly. We discuss our matching campaign for the Father McKenna Center (rolled out in Episode 426), the BOXX ETF and the Rorschach test it presents, direct indexing, Risk Parity Chronicles, and the real purpose of Financial Independence and how to win at retirement and life.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Interview of Wes Gray about BOXX and other tax strategies: Episode 70: Dr. Wes Gray discusses the unique tax benefits of ETFs and other topics of interest, host Rick Ferri | Bogleheads On Investing Podcast
KBWP at Morningstar: KBWP – Invesco KBW Property & Casualty Ins ETF – ETF Stock Quote | Morningstar
Risk Parity Chronicles on YouTube: Risk Parity Chronicles - YouTube
The Life of Catherine McAuley: Catherine McAuley
Breathless Unedited AI-Bot Summary:
Money without purpose is just numbers in an account. Financial independence isn't the finish line—it's the starting point of a more meaningful journey.
In this deeply personal episode, Frank Vasquez tackles sophisticated investment strategies while unveiling the philosophical underpinnings of his approach to wealth. He examines the tax-efficient BOXX ETF, explaining how it allows investors in higher tax brackets to potentially convert ordinary income into more favorable long-term capital gains. Drawing on insights from Alpha Architect's Wes Gray, Frank positions this strategy within the evolving landscape of personal finance technology, contrasting innovators against those clinging to outdated viewpoints.
The conversation shifts to direct indexing—a strategy where investors replicate indices by purchasing individual securities rather than funds. Frank cuts through the marketing hype, offering practical guidance on when this approach makes sense (primarily for those in higher tax brackets) and when it's simply not worth the complexity. His personal experience with property and casualty insurance companies demonstrates selective implementation without paying unnecessary fees.
Most powerfully, Frank shares the story that shaped his retirement philosophy—his aunt Sister Francine of the Sisters of Mercy. This "firebrand and hellraiser" ran schools and soup kitchens, challenged the wealthy to contribute more, and built deep community connections. When she died without money or fame, her funeral filled a cathedral with mourners—the ultimate testament to a life well-lived.
What's the purpose of saving all that money if not to create meaningful impact? How might your financial independence serve something greater than account balances? Listen and reconsider what truly constitutes "winning at life."
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In this episode we answer emails from Pete, Kevin and Dale. We discuss Pete's "Berry Pie" portfolio experiments on the testfolio site, the ongoing debate about the size and value factors and why it doesn't matter that much for constructing diversified portfolios due to Shannon's Demon, and some basics on the process for constructing portfolios moving from asset classes to specific ETFs.
We also roll out our "Top of the T-Shirt" Matching Campaign to benefit the Father McKenna Center. Please support the Father McKenna Center by visiting their website and mentioning "Risk Parity Radio" in the dedication box when donating. Your contribution will be matched dollar-for-dollar and help provide meals and services to homeless and hungry people in Washington DC.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Pete's Test Portfolios Analysis: https://testfol.io/?s=cTkuwqvwzMS
Shannon's Demon Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Meb Faber Interview of Professor Ken French: Famed Finance Expert Kenneth French Reveals: Most Dangerous Investor Fallacies
Breathless Unedited AI-Bot Summary:
Ever walked into a dive bar and found unexpected wisdom? That's Risk Parity Radio—a refreshingly honest approach to investing where movie quotes mix with mathematical principles, and portfolio theory comes without the corporate jargon.
In this episode, Frank Vasquez launches the "Top of the T-Shirt Campaign," where an anonymous donor will match up to $15,000 in listener contributions to the Father McKenna Center. This small but mighty charity serves thousands of meals to homeless and hungry people in Washington DC with remarkable efficiency, using a $1.5 million budget, donated space, and an army of volunteers to maximize impact.
The heart of the episode tackles a fundamental investing misconception—that we include value stocks or small cap funds because they'll outperform. Frank explains that diversification isn't about prediction but about mathematical certainty: "That's Shannon's Demon. If you have two assets with similar long-term performance but they aren't fully correlated, you're better off holding both than either one alone." By splitting stock holdings between growth and value, investors create systematic rebalancing opportunities when these segments diverge—as they dramatically did in 2022, when growth cratered while value remained relatively stable.
Listeners get practical portfolio construction wisdom too: start with your goals, select appropriate asset classes, then choose specific funds—not the other way around. Frank emphasizes that ETFs have made mutual funds largely obsolete for new investments, offering better tax efficiency and portability.
Weekly portfolio reviews reveal gold's continued dominance (up 28% YTD) while diversified portfolios showed modest gains despite volatile markets. Risk parity approaches demonstrated their resilience, with the Golden Butterfly portfolio up 3.13% year-to-date and 38.12% since inception in 2020.
Ready to build a portfolio that doesn't require predicting winners? Want to support a worthy cause while learning? This episode combines financial wisdom with practical generosity—a perfect introduction to the Risk Parity Radio approach.
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In this episode we answer emails from Andy, El Yama and Paulo. We discuss a follow up to the question on margin accounts at Interactive Brokers in Episode 424, the use of SCHD fund as a large cap value fund in a risk parity style portfolio, the meaning of "safe" in "safe withdrawal rates" and the current popular obsession with international funds, as well as diversification considerations for using them. And an upcoming appearance on the "Afford Anything" podcast. And the famous SCTV parody "The Queen Haters."
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
SCHD Analysis on Morningstar: SCHD Stock - Schwab US Dividend Equity ETF | Morningstar
Breathless Unedited AI-Bot Summary:
Dive into the murky waters of investment strategy as Frank tackles listener questions with his signature blend of expertise and irreverent humor. This episode peels back the layers on three critical investing topics that frequently trip up even experienced investors.
Frank first dissects the mechanics of margin accounts at Interactive Brokers, clarifying how leverage percentages work differently when withdrawing cash versus purchasing additional assets. With characteristic frankness, he explains why brokers might offer leverage limits up to five times an account's value while emphasizing that such levels represent "way more margin than anyone really needs or would want, unless they truly have a gambling problem."
The conversation shifts to dividend ETFs, specifically SCHD, which Frank analyzes not by its label but by its actual characteristics. He reveals how this fund functions effectively as a conservative value play that "sits right on the border between mid-cap and large-cap" with "an even lower average PE ratio than most value funds." This practical approach to fund classification—looking beyond marketing labels to actual investment behavior—exemplifies the podcast's commitment to clear-eyed analysis.
Perhaps most valuable is Frank's demolition of several sacred cows in retirement planning. He explains how safe withdrawal rates already incorporate worst-case scenarios, making additional conservative assumptions not just unnecessary but potentially harmful. "When people are talking about 3% or less withdrawal rates, they are really just doing bad forecasting," he argues, characterizing such excessive conservatism as "essentially leaving life on the table by not spending the money when you're alive."
The episode culminates in a masterful takedown of the current "fervor" for international stocks. Frank explains how currency fluctuations—not magical mean reversion—drive performance differences between markets, and why holding total market US and international funds provides minimal true diversification. "That is pretty much the least diversified way of using international funds against US funds," he notes, before offering practical alternatives for constructing a genuinely diversified portfolio across meaningful factors.
Want to support the show? Consider donating to the Father McKenna Center, which helps homeless people in Washington DC. Email your questions to frank@riskparityradio.com or visit riskparityradio.com.
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In this episode we answer emails from Yangon, The Value Stock Geek, and Graham. We discuss the ins and outs of margin accounts at Interactive Brokers, some annoyances with gold ETFs and 1099s, and BTAL vs. treasury bonds.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Tyler On The Security Analysis Podcast: Tyler (@PortfolioCharts): The Amazing Power of Uncorrelated Assets
Analysis Of BTAL vs. SPY vs. TLT With Correlations: testfol.io/analysis?s=jAQO2TjzA
Paper Re Stock Market Volatility And Treasury Bonds (C. Moise): Flights to Safety, Volatility Risk, and Monetary Policy by Claudia E. Moise :: SSRN
Breathless Unedited AI-Bot Summary:
Diving deep into the financial weeds, Frank tackles several practical questions that impact do-it-yourself investors managing their own portfolios. What begins as a detailed exploration of Interactive Brokers' margin loan program reveals valuable insights about using portfolio assets as collateral, the tax deductibility of margin interest, and how to monitor your account to avoid margin calls.
The conversation shifts to an unexpected tax headache many gold ETF investors face: those annoying tiny distributions that clutter 1099 forms while providing minimal value. Frank compares how different brokerages handle these transactions, offering practical advice for simplifying your tax reporting experience. For those weary of manually entering dozens of nickel-and-dime transactions each tax season, this segment provides welcome relief.
Perhaps most valuable is Frank's thoughtful analysis of asset correlations and why treasury bonds remain irreplaceable in risk parity portfolios despite recent correlation changes. "Correlations are not magical and they're not random," Frank explains, dismissing the notion that we've entered a "new paradigm" where traditional diversification no longer works. He articulates why correlation changes are tied to macroeconomic conditions and why treasury bonds still serve as essential recession insurance that alternatives like BTAL cannot replace.
The weekly portfolio review brings welcome news as most sample portfolios show positive performance, with gold continuing its strong 2024 despite recent pullbacks. Small cap value remains the year's underperformer, while the diverse range of portfolio strategies demonstrates how risk parity principles can adapt to different investor needs.
Whether you're considering margin loans, puzzling over gold ETF tax statements, or questioning the role of treasury bonds in today's market environment, this episode delivers practical wisdom for navigating these complex investment waters. Frank's straightforward approach strips away the mystique surrounding these topics, empowering listeners to make more informed decisions with their portfolios.
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In this episode we answer emails from Dave, Jeff and Peter. We discuss a new risk parity ETF, ALLW, a social security claiming question and considerations, and how a listener has been misled regarding so-called dividend investing by misinterpreting a misleading source.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
ALLW Fund Main Page: ALLW: SPDR® Bridgewater® All Weather® ETF
Open Social Security: Open Social Security: Free, Open-Source Social Security Calculator
Hartford Funds Dividend Fund Page: The Power of Dividends: Past, Present, and Future
Ben Felix Dividend Video: The Irrelevance of Dividends
Ben Felix Dividend Video #2: The Relevance of Dividend Irrelevance
Breathless Unedited AI-Bot summary
Financial misconceptions can cost you dearly. This eye-opening episode tackles three critical investment topics that challenge conventional wisdom and may transform how you approach your portfolio.
When State Street and Bridgewater Associates launched their All Weather ETF (ALLW), it promised the stability of risk parity with the pedigree of Ray Dalio himself. We dissect this new offering—examining its 175% leverage, complex asset allocation, and 0.85% expense ratio—to determine whether it delivers on its promises or falls into the same traps as similar products like RPAR and UPAR. For investors approaching retirement, understanding these nuances could be the difference between confidence and confusion in the decumulation phase.
Delaying Social Security benefits remains one of retirement planning's most debated decisions. We cut through the noise of oversimplified break-even calculators to explore what truly matters: appropriate risk-free rate calculations, the value of guaranteed income streams, and perhaps most importantly, how your family's longevity history should influence your claiming strategy. For married couples, the analysis becomes even more critical as spousal benefits create powerful optimization opportunities that generic calculators often miss.
The episode concludes by dispelling one of investing's most persistent myths: the magical power of dividends. When Hartford Research noted that "85% of the S&P 500's return came from reinvested dividends and compounding," many investors misinterpreted this to mean dividends themselves were responsible for these returns. We reveal how this fundamental misunderstanding leads investors astray, explain why dividend payments offer no advantage in today's zero-commission environment, and demonstrate why creating your own "dividend" through strategic selling provides superior tax control.
Whether you're building wealth or planning your withdrawal strategy, these insights will help you see beyond marketing claims to make decisions based on financial reality rather than comforting illusions. Listen now to align your investment approach with actual market mechanics instead of persistent financial folklore.
Have a question about risk parity investing or portfolio construction? Email frank@riskparityradio.com or visit riskparityradio.
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In this episode we answer emails from Ed, Joe and Jack. We discuss a commodities fund, BCI, some more cowbell, and Fidelity's share lending program.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
BCI vs. PDBC vs. COM vs. DBMFX: testfol.io/analysis?s=3NIFkA7mNB9
Small Cap Value vs. S&P 500 In 21st Century: testfol.io/analysis?s=gkqbgk7mzka
Comparison Between Small Cap Value And Overall Market With Histogram: Backtest Portfolio Asset Class Allocation
Breathless Unedited AI-Bot Summary:
Looking for that perfect balance between return potential and downside protection? This episode delivers practical insights for DIY investors navigating today's complex markets.
We dive deep into commodity ETFs as listener Ed asks about PDBC versus BCI for his portfolio. The comparison reveals surprising differences in expense ratios, management approaches, and tracking errors that could significantly impact your returns over time. Frank shares why he's personally shifted away from dedicated commodity funds toward managed futures for inflation protection.
The conversation then turns to small cap value investing, but with a crucial twist that many investors miss. Rather than focusing solely on whether small cap value will outperform the broader market, Frank emphasizes its diversification benefits during market downturns. The 2022 market crash provides a perfect case study: while growth stocks plummeted 30-50%, value stocks ranged from -10% to +10%, creating powerful rebalancing opportunities that can enhance long-term performance.
We also examine Fidelity's Fully Paid Lending Program, which allows investors to earn additional income by lending their securities. While the potential return seems modest (around 0.625% annually), we consider the counterparty risks and regulatory protections you might sacrifice.
The episode concludes with our weekly portfolio reviews revealing fascinating performance patterns in 2024. Gold continues to shine with a remarkable 26.81% year-to-date gain while the broader market struggles. This performance disparity highlights why thoughtful asset allocation matters more than ever for investors seeking to build truly resilient portfolios.
Whether you're managing a multi-million dollar portfolio or just starting your investment journey, these insights will help you navigate market volatility with greater confidence and clarity.
What's your approach to balancing growth and value in your equity allocation? Have you considered how different assets might interact during the next market downturn?
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In this episode we answer emails from Luc, Ellen and Andrew. We discuss Luc's target portfolio, the process for evaluating and choosing new assets for a portfolio -- comparing why managed futures pass the test, while covered call fund and TIPs funds don't --, what's actually in our personal variation of the Golden Ratio portfolio, finding old podcast episodes and basic rebalancing principles as to timing. And learn some Canadian French and Minnesota vernacular along the way.
Links:
Andrew Beer Interview on Masters In Business Podcast: Andrew Beer on the Hedge Fund … - Masters in Business - Apple Podcasts
RPR Episode 40 on YouTube: Episode 40: Answering A Question About Big ERN's Gold Analysis From Joseph K.
Kitces Article on Rebalancing: Optimal Rebalancing – Time Horizons Vs Tolerance Bands
Breathless Unedited AI-Bot Summary:
What makes a truly resilient portfolio? In this revealing episode, Frank Vasquez pulls back the curtain on both theoretical and practical aspects of risk parity investing through thoughtful listener questions.
When a software engineer from French-speaking Canada shares his leveraged risk parity portfolio, Frank offers nuanced guidance on balancing potential returns with sustainability. Rather than dismissing leverage entirely, he suggests a more measured approach—reducing exposure to funds like UPRO while maintaining their rebalancing benefits. This practical compromise exemplifies Frank's philosophy of building portfolios that remain psychologically manageable through market turbulence.
The conversation takes a fascinating turn as Frank reveals his framework for evaluating new investment opportunities. Unlike many advisors who chase trends, his three-question methodology ensures only truly valuable assets earn portfolio space. His explanation of why managed futures succeeded where TIPS failed demonstrates how professional-grade analysis can be applied to personal investing. "The truth is," Frank notes, "a lot of otherwise viable or interesting strategies actually just don't fit into what we're trying to do here."
Perhaps most valuable is Frank's unprecedented breakdown of his personal portfolio holdings. Beyond the expected allocations to stocks, bonds, gold and alternatives, he shares his experiments with direct indexing of property and casualty insurance companies—a Warren Buffett-inspired approach that provided positive returns even during 2022's difficult markets. This rare glimpse into a professional's actual implementation bridges the gap between theory and practice.
Whether you're questioning how often to rebalance, wondering about international exposure, or simply curious about how a professional approaches their own money, this episode delivers actionable insights while maintaining Frank's trademark blend of humor and wisdom. Ready to build a portfolio that marches to a different drummer? This is the roadmap you've been waiting for.
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In this episode we answer emails from Anderson, Ian, FFS, and Michael. We discuss using Roths earlier in accumulation and tax considerations, wrestling with an expensive 401k plan with limited options, and the various and sundry deficiencies of this program and its website. Rest assured, we have "top men" working on it. Top. Men.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Breathless Unedited AI-Bot Summary:
Welcome to the dive bar of personal finance, where frank conversations about investing happen without sponsors, guests, or corporate jargon. In episode 420, Frank Vasquez serves up practical wisdom alongside his signature blend of humor and no-nonsense advice.
The heart of this episode centers around listener questions that reveal common investing dilemmas. When a father of six asks about Roth conversions while in a low tax bracket, Frank not only endorses the strategy but takes the opportunity to debunk widespread myths about future taxation. "The fear of future taxes is often overblown," Frank explains, noting how this anxiety is frequently exploited by financial professionals selling expensive products. He articulates why most people actually face lower tax rates in retirement—a perspective that runs counter to conventional financial advice but makes perfect mathematical sense when examining income sources and tax treatment.
Another listener struggling with limited 401(k) options receives thoughtful guidance on transitioning from 100% equities to a more balanced risk parity approach. Frank's explanation of the "macro allocation principle" illuminates why focusing on the percentage of stocks across all accounts matters more than perfect diversification within any single account. His pointed criticism of target date funds—describing them as "easy but not simple"—offers a refreshing counterpoint to the retirement industry's oversimplified solutions.
The episode culminates with Frank's detailed review of eight sample portfolios, revealing how diversification strategies are performing in today's volatile markets. While the S&P 500 struggles with a 3.02% year-to-date decline and small cap value plummets 13.16%, gold shines with a remarkable 23.2% gain. More importantly, the risk parity portfolios demonstrate remarkable stability compared to single-asset approaches.
Whether you're considering tax strategies, rebalancing your portfolio, or simply looking for straight talk about investing, this episode delivers valuable insights without the financial industry's typical marketing hype. Subscribe, leave a review, and visit riskparityradio.com for more resources to help guide your investment journey.
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In this episode we answer emails from Chris, Will and Neelix. We discuss the basics of transitioning from accumulation to decumulation, choosing funds for accumulation from a limited selection, more transitioning questions from an alien, my lawyerly approach to personal finance and why the public personal finance landscape is often not very helpful and leaves much to be desired.
Frank addresses listener questions about transitioning from accumulation to retirement portfolios, focusing on timing and asset allocation decisions for different life stages. The episode explores foundational concepts about when to shift to a less aggressive portfolio and how to work around investment account limitations.
Links:
All Podcasts On One Web Page: Risk Parity Radio RSS Feed
Merriman ETF Recommendations: Best-in-Class ETF Recommendations | Merriman Financial Education Foundationj
Breathless Unedited AI-Bot Summary:
Ready to make the leap from aggressive growth investing to a more balanced retirement portfolio? Join Frank Vasquez as he breaks down one of investing's most critical transitions through thoughtful analysis of listener questions spanning different life stages and portfolio challenges.
We dive deep into the essential question of timing: when should you transition from accumulation to decumulation? Unlike conventional wisdom that focuses on market conditions, Frank reveals why your personal financial readiness should be the primary consideration. Learn why calculating your Financial Independence number is crucial and why your current spending patterns offer surprisingly reliable guidance for retirement planning.
For younger investors struggling with 401(k) limitations, Frank offers practical strategies to achieve optimal asset allocation across multiple account types. His clear breakdown of why certain asset classes (looking at you, small-cap growth) deserve caution while others merit emphasis provides actionable guidance regardless of your investment timeline.
What sets this episode apart is Frank's candid assessment of the personal finance media landscape. Drawing from his background cross-examining financial experts, he categorizes financial content into entertainment, sales, and education - explaining why most advice falls short for those who actually plan to spend money in retirement. His Bruce Lee-inspired approach to financial wisdom - "take what is useful, discard what is useless, and add something uniquely your own" - offers a refreshing framework for cutting through the noise.
Whether you're decades from retirement or counting down the years, you'll gain valuable perspective on building a portfolio strategy that serves your actual spending goals rather than following the crowd. Share your own portfolio questions at frank@riskparityradio.com!
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In this episode we answer emails from Jeff, Jenzo and Sam. We discuss spending money on relationships, a 72(t) situation, what to do with an unused Coverdell, GDE (again), a nice risk parity write-up and some random musings about the history of free speech and communications technologies.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Jenzo's GDE Backtest: testfol.io/?s=0SLNjC7As4b
Sam's Most Excellent Risk Parity Explication Blog Post: 15 Uncorrelated Assets | SSiS
Sam's Most Excellent Bill Of Rights Blog Post: Boxed In | SSiS
Breathless Unedited AI-Bot Summary:
When markets tumble and headlines scream doom, properly diversified portfolios reveal their quiet strength. This episode showcases exactly that phenomenon - while small cap value has plummeted 15.58% and the S&P 500 has shed 5.74% year-to-date, gold has soared a remarkable 25.87%, creating a balancing effect that keeps risk parity portfolios remarkably stable.
We dive into listener Jeff's retirement strategy, examining his use of 72T distributions and exploring whether his recent RV purchase makes financial sense. The answer turns out to be more about relationships than raw numbers. Research shows expenditures that facilitate meaningful connections tend to yield the greatest happiness returns - a powerful framework for evaluating major purchases in retirement.
The emerging world of composite leveraged ETFs takes center stage as we examine GDE, which combines S&P 500 exposure with gold allocation at 1.8x leverage. While innovative funds like these package risk parity principles into convenient solutions, they represent a tradeoff between simplicity and control. We explore whether these instruments belong in a sophisticated asset allocation strategy or if traditional single-asset funds still offer superior flexibility.
For investors fascinated by portfolio design theory, we tackle the question of just how many truly uncorrelated assets one needs. While hedge funds and endowments might pursue 15+ distinct asset classes, diminishing returns suggest a more practical approach for individual investors. The mathematical reality shows the incremental benefit of adding that 11th or 12th asset pales in comparison to the impact of moving from one or two assets to five diverse investments.
Our weekly portfolio review reveals the practical power of these principles. Despite market turmoil, most of our sample portfolios remain nearly flat or slightly positive for the year - precisely the stability risk parity promises. Whether you're just beginning your investment journey or fine-tuning an established strategy, this episode offers both theoretical frameworks and practical evidence for building resilient portfolios in uncertain times.
Ready to hear more? Subscribe, leave a review, and send your questions to frank@riskparityradio.com.
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In this episode we answer emails from Marco Esquandolas and Multi-Family Investor. We discuss a long-term diversified Roth portfolio for a 13-year old, modelling Delaware Statutory Trusts in a portfolio, transitioning out of an all S&P 500 allocation in a taxable account, PFIX, Sabine Royalty Trust and individual stocks in retirement portfolios, and M1 Finance.
Note/Correction: Sabine is actually NOT structured like an MLP but as a true trust and therefore issues 1099s, not K-1s like most companies in the oil & gas royalty space.
Links:
Shannon's Demon Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
IDMO vs EFG (and other international growth funds) Analysis: testfol.io/analysis?s=4PEQ1YvTbAM
Breathless Unedited AI-Bot Summary:
Dive into the world of strategic portfolio building with this illuminating episode where Frank tackles questions from two distinct investors at opposite ends of the age spectrum. A father shares his 13-year-old son's Shannon's Demon-inspired portfolio that's being built for an ultra-long 50+ year time horizon, featuring a balanced approach to growth and value across both domestic and international markets. Frank offers targeted advice on fund selection while celebrating this young investor's precocious financial journey.
The conversation shifts dramatically when an engineer earning $250,000-300,000 annually shares his detailed retirement strategy with hopes of financial independence before 50. With $3.4 million spread across multiple investment vehicles including real estate, this listener puzzles over how to transition to a risk parity portfolio without triggering a substantial tax bill. Frank methodically dissects several aspects of this complex situation, questioning the wisdom of backdoor Roth conversions during peak earning years and clarifying misconceptions about Delaware Statutory Trusts as bond substitutes.
What makes this episode particularly valuable is Frank's blend of technical advice and practical wisdom. He cuts through complex tax and investment strategies to offer straightforward solutions - identifying tax-loss harvesting opportunities, rethinking account structures, and focusing on expenses rather than arbitrary portfolio targets. The discussion extends to specialized investments like royalty trusts and interest rate hedges, providing listeners with a masterclass in portfolio construction that balances theoretical ideals with real-world constraints.
Whether you're managing investments for the next generation or planning your own early retirement, this episode delivers actionable insights on building resilient, tax-efficient portfolios tailored to your unique circumstances. The principles shared apply across market conditions and investment goals, making this essential listening for any DIY investor seeking to optimize their financial future.
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In this episode we answer emails from El Yama, Graham, and James. We discuss using risk parity-style portfolios for intermediate term needs, the short-term bond allocation in the Golden Butterfly, accounting for child credit, rising equity glidepaths, the fundamental differences between 100% stock portfolios and diversified portfolios and why you want the latter for retirement unless your goal is to die with the most money, and a CAPE ratio critique from Meb Faber's podcast.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Kitces Article re Rising Glidepaths: The Benefits Of A Rising Equity Glidepath In Retirement
Kitces/Pfau Paper re Rising Glidepaths: Reducing Retirement Risk with a Rising Equity Glide-Path by Wade D. Pfau, Michael Kitces :: SSRN
Meb Faber Podcast with Brian Jacobs discussing problems with CAPE ratio predictions: A Century of No Return! The Truth About The Beloved Bonds (Brian Jacobs of Aptus Reveals)
Breathless Unedited AI-Bot Summary:
"A foolish consistency is the hobgoblin of little minds," begins this thought-provoking exploration of why most investors are trapped in accumulation-phase thinking even as they approach or enter retirement.
The question at the heart of this episode strikes at a surprising disconnect in personal finance: Why do so many investors intellectually understand they're investing to enjoy retirement, yet construct portfolios clearly designed to maximize wealth at death?
Through a series of illuminating listener emails, Frank unpacks how portfolios optimized for accumulation often fail spectacularly during the decumulation phase. One listener confesses he "always wondered why anyone would buy bonds when clearly stocks give a far greater return," before discovering through portfolio testing that a 100% equity portfolio would have "failed catastrophically" for someone retiring around 2000-2003.
This recognition—that diversification isn't about maximizing returns but enabling sustainable withdrawals—represents the fundamental insight many investors miss until too late. As Frank colorfully puts it, if your goal is to "die with the most money possible" in your "golden coffin," then by all means stick with 90-100% equities. But if you actually intend to enjoy your retirement by spending more than 3% of your portfolio annually, a properly diversified approach becomes essential.
The episode also addresses why attempts to use valuation metrics like CAPE ratios to predict market movements have largely failed, and why separating your portfolio into growth and value components offers a more reliable approach to capturing rebalancing bonuses without attempting market timing.
Make sure your investment behavior actually matches your stated goals. If you're planning to spend in retirement, construct a portfolio that optimizes for sustainable withdrawals, not maximum theoretical returns.
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In this episode we answer emails from Corn Pop, Dustin and Jim. We discuss annuities for elderly parents, TIPS ladders in retirement, REITs in small cap value funds, currency speculation, the GDE fund (again) and an aggressive portfolio construction.
Link:
Interview of Michael Kitces Re Problems With TIPS Ladders: Michael Kitces: How Higher Yields Affect Asset Allocation and Retirement Planning | Morningstar
Breathless and Promotional AI-Bot Summary:
Dive into the mailbag as Frank tackles complex investment questions with his signature blend of expertise and pop culture references. This episode unpacks several critical financial planning dilemmas that challenge conventional wisdom.
First, Frank examines when annuities make sense for elderly parents, explaining how health prospects and longevity expectations should guide this decision. For those likely to outlive actuarial tables, annuities can provide financial value and simplify management—but they're far from universally beneficial. Frank introduces Qualified Longevity Annuity Contracts (QLACs) as a strategic option for those concerned about funding long-term care in their later years.
The conversation shifts to a provocative take on TIPS ladders, with Frank describing long-term ladders as "a flex for hoarders" rather than necessary financial tools. He argues these complicated structures work best for defined periods with specific purposes—like bridging to Social Security—not as decades-long income vehicles that will inevitably be either too long or too short for your actual lifespan.
Currency speculation, Bitcoin, and aggressive portfolio construction round out the episode's explorations. Frank explains how currency exposure already exists implicitly in international stocks and gold without dedicated speculation, evaluates an aggressive portfolio with substantial Bitcoin allocation, and questions whether dividend stocks belong in accumulation strategies.
Throughout, Frank balances technical analysis with practical wisdom, reminding listeners that personalized investment approaches must account for individual circumstances rather than following generic advice. Whether you're managing a retirement portfolio or building wealth, you'll gain valuable perspective on how the finest investment strategies align with your actual needs rather than theoretical ideals.
Want your questions answered on a future episode? Email frank@riskparityradar.com and don't forget to subscribe and leave a review!
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In this episode we answer emails from Jeremy, Brad, and James. We discuss a more aggressive risk-parity portfolio similar to the Weird Portfolio, the problems with data analysis and recency bias and considerations in accounting for Social Security or pensions in retirement portfolio planning.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Jeremy's Portfolio on Portfolio Visualizer: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=LDhLHuhVF5zOKfTZckLT7
Weird Portfolio: Weird Portfolio – Portfolio Charts
Testfolio Portfolio Comparison (90/10 vs. 50/50): https://testfol.io/?s=2TDnqWEw5FE
Bogle Interview (re Social Security): Jack Bogle on Index Funds, Vanguard, and Investing Advice
Kitces Interview (re Social Security): Social Security: Part of Your Asset Allocation?
Breathless AI-Bot Summary:
"A foolish consistency is the hobgoblin of little minds," begins this episode, capturing the essence of breaking away from conventional investment thinking. Stepping into Frank's metaphorical "dive bar of personal finance," listeners are treated to an exploration of portfolio diversification during turbulent market conditions.
Frank tackles three thought-provoking listener questions that challenge common investing assumptions. First, he analyzes a balanced portfolio proposal with equal allocations to large-cap growth, small-cap value, REITs, long-term treasuries, and gold, explaining why this more aggressive risk parity approach shows promising safe withdrawal rates. The conversation shifts to the dangers of recency bias when a listener questions the underperformance of a 50-50 small-cap value/large-cap growth portfolio over just five years. Frank emphasizes that even a decade of data can be "just noise" when evaluating investment strategies, reminding us to focus on performance during challenging market periods rather than recent returns.
Perhaps most compelling is Frank's fresh perspective on integrating Social Security into financial planning. Challenging the notion that Social Security should be viewed as fixed-income allocation, he suggests treating it more like an annuity that reduces expenses rather than an asset within your portfolio. This shifts the conversation from wealth preservation to life maximization, encouraging retirees to consider increasing discretionary spending rather than hoarding assets.
The weekly portfolio review reveals a fascinating market story: while the S&P 500 has fallen 8.64% year-to-date and small-cap value has plummeted 19.69%, gold has surged 23.12%. This perfect illustration of risk parity principles shows how properly diversified portfolios maintain remarkable stability despite individual asset volatility. The unlevered sample portfolios remain down less than 1% year-to-date, demonstrating the power of hearing that "different drummer" when constructing your investment approach.
Have questions about building your own diversified portfolio? Email frank@riskparityradio.com or visit the website to connect directly. Don't forget to subscribe and leave a review wherever you listen to podcasts!
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In this episode we answer emails from Harry, Sally, Jack and Javon. We discuss recovering from financial set-backs, my life on the Choose FI board, assets that do well in inflationary environments and large cap growth funds like MGK in Merriman-type portfolios.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Mindset by Carol Dweck: Mindset: The New Psychology of Success by Carol S. Dweck | Goodreads
Bloomberg Presentation On Investments In Inflationary Environments: MH201-SteveHou-Bloomberg.pdf
Shannon's Demon Article from Portfolio Charts: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Testfolio Analysis of MGK and other funds: testfol.io/analysis?s=lbssElueG9D
Amusing Unedited AI-Bot Summary:
When financial disaster strikes, where do you turn? In this deeply empathetic episode, Frank Vasquez responds to a listener who's lost nearly everything through leveraged investments caught in market turmoil. His compassionate yet practical response offers a roadmap back from financial devastation, emphasizing that starting from net worth zero with income potential creates a foundation many successful investors have built upon.
The conversation shifts to examining the psychology behind financial social media, where Frank taxonomizes poster behaviors into revealing categories. From genuine question-askers to Dunning-Kruger sufferers repeating harmful advice from financial media marketing materials disguised as guidance, this analysis helps listeners navigate confusing information landscapes. His take on affirmation-seekers posting humble brags or seeking validation for poor decisions provides particular insight into why certain destructive financial ideas persist online.
With inflation concerns mounting due to potential tariffs and immigration restrictions, Frank offers practical portfolio protection strategies beyond traditional TIPS, which merely help investors tread water rather than outperform during inflationary periods. His breakdown of managed futures, commodities, value-tilted stocks in hard assets, and property/casualty insurance companies provides actionable alternatives. The discussion culminates in comparing investment theorist Paul Merriman's value-tilted ETF recommendations with Frank's diversification approach using Shannon's Demon principles, demonstrating how different philosophical frameworks can lead to successful long-term investing.
What distinguishes this episode is Frank's ability to balance technical expertise with emotional intelligence, offering not just investment strategies but wisdom about resilience and perspective during financial hardship. Whether you're recovering from losses or preparing for economic uncertainty, this episode delivers both tactical guidance and reassuring wisdom from someone who's weathered financial storms himself.
Have questions? Connect at frank@riskparityradar.com or through the website contact form. Please like, subscribe, and share with fellow investors seeking thoughtful financial guidance.
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In this episode we answer emails from Ron, Iain, an Anonymous Visitor and Mr. Data. We discuss Ron's generosity and his variable or guardrails withdrawal strategy, some helpful British website references, what we use bonds for in these portfolio and how the TSP G fund fits into that, and small cap growth vs. small cap value stocks. And some notes on recent market turmoil.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Charts Retirement Spending: Retirement Spending – Portfolio Charts
Monevator Quilt Chart: Asset allocation quilt – the winners and losers of the last 10 years - Monevator
Just ETF (UK) Page: ETF portfolios made simple
Shannon's Demon Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Amusing Unedited AI-Bot Summary:
Market crashes reveal the true value of diversification. While Professor Jeremy Siegel called last week's events "the worst policy mistake in US economic history in the last 95 years," properly structured portfolios weathered the storm remarkably well.
The recent market plunge shows exactly why risk parity strategies work—the S&P 500 dropped 13.3%, NASDAQ fell 17.2%, but our All Seasons portfolio remained flat for the year. This divergence creates powerful rebalancing opportunities that can enhance long-term returns.
Looking at performance across asset classes reveals a classic recession pattern: falling stocks, rising treasury bonds, and initial panic selling followed by differentiated recoveries. Long-term Treasury bonds (VGLT) are up 7.2% for the year, demonstrating their crucial diversification role during market stress. Gold, despite some wobbles, remains up 15.7% year-to-date.
The mathematical principle behind this outperformance is what Claude Shannon described as "Shannon's Demon"—when assets perform differently at different times, periodic rebalancing allows the portfolio to outperform any individual component. This explains why we maintain exposure to both growth and value styles, rather than trying to predict which will outperform next.
For DIY investors, this market correction offers valuable lessons about portfolio construction. Understanding why you hold each asset—whether for stability, income, or diversification—is far more important than chasing yields. The Golden Butterfly portfolio, with its balanced approach across stocks, bonds, and gold, is only down 1.78% year-to-date while continuing to provide consistent distributions.
Want to learn more about building resilient portfolios? Visit riskparityradio.com for sample portfolios and detailed resources, or email your questions to frank@riskparityradio.com.
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In this episode we answer emails from Michael, Brian and Ed. We discuss Michael's situation and options as a 34-year old with growing portfolios and a growing family, Brian's questions about the infernal Cederburg paper that won't go away and Ed's questions about accumulation portfolios.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Testfolio Comparison between Total Market and Large Cap Growth: testfol.io/analysis?s=0GbmPE8D9GK
Merriman Best In Class ETFs: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation
Shannon's Demon Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Rational Reminder Podcast #350: Episode 350 - Scott Cederburg: A Critical Assessment of Lifecycle Investment Advice — Rational Reminder
An Actually Useful Analysis of Global Portfolios: What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts
Brian's Golden Butterfly Monte Carlo: Monte Carlo Simulation
Brian's All Equity 50/50 Monte Carlo: Monte Carlo Simulation
Brian's All Equity 34/66 Monte Carlo: Monte Carlo Simulation
Amusing Unedited AI-Bot Summary:
Frank Vasquez tackles the complex world of portfolio construction across different life stages, offering practical wisdom mixed with his trademark humor for investors at all levels. This episode dives deep into a $1 million portfolio review, addressing how to balance real estate investments with securities, manage excess cash, and prepare for eventual retirement.
A key highlight is Frank's thorough debunking of a frequently misunderstood academic study suggesting all-equity portfolios are optimal for retirement. With mathematical clarity, he explains why the study's unusual methodology comparing non-reserve currency bonds to U.S. equities across disconnected historical periods doesn't translate to practical investment advice. His Monte Carlo simulation comparisons confirm that diversified portfolios consistently outperform all-equity approaches during drawdown scenarios.
The episode offers particularly valuable insights on pairing large-cap growth with small-cap value investments – not because either category is predicted to outperform, but because they create effective rebalancing pairs operating on different cycles while delivering similar long-term returns. This mathematical principle, known as Shannon's demon, shows how two assets with comparable returns but different timing can outperform either investment held alone.
For younger investors still accumulating wealth, Frank recommends focusing on equity exposure while avoiding unnecessary complexity. His practical advice extends to managing investments across different account types, structuring 401(k) investments with limited options, and maintaining psychological fortitude through market cycles. Whether you're managing a complex portfolio or just starting you
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In this episode we answer emails from Deeps, David, James, Steven and Jordan. We discuss the PHYS vs other gold ETFs, the podcast feed link, using AVGE in a risk parity style portfolio, why we do this and tail risk hedging.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
PHYS vs. GLDM: testfol.io/analysis?s=1lK9VB9xqaM
RPR Main Feed Link (all the podcasts -- open in browser): Risk Parity Radio RSS Feed
AVGE Composition And Other Info: AVGE – Portfolio – Avantis All Equity Markets ETF | Morningstar
Portfolio Matrix: Portfolio Matrix – Portfolio Charts
CAOS Fund: CAOS – Alpha Architect Tail Risk ETF – ETF Stock Quote | Morningstar
Amusing Unedited AI-Bot Summary:
Gold continues to shine while stocks falter in 2024's challenging market environment. This episode demonstrates the power of diversification during turbulent times, with precious metals up over 17% year-to-date as the S&P 500 struggles down nearly 5%. We explore why truly diversified portfolios are proving their worth yet again.
Responding to a listener question about gold ETFs, I break down why PHYS's potential tax advantages rarely outweigh its higher expense ratio compared to traditional options like GLD. The physical gold redemption feature sounds appealing but offers little practical benefit for most investors. The entire physical gold storage industry largely profits from fear rather than delivering substantive advantages to everyday investors.
The highlight of this episode comes from a fascinating listener discovery – combining the comprehensive Avantis AVGE fund with treasuries and gold creates a remarkably simple yet effective portfolio. This approach addresses a critical concern: ensuring surviving spouses can easily manage investments without sacrificing performance. Our analysis using Portfolio Charts shows this simplified approach delivers comparable results to more complex allocations while dramatically reducing management complexity.
We also tackle tail risk hedging strategies, explaining why these insurance-like approaches rarely justify their ongoing costs, especially for investors in the accumulation phase. True diversification provides more reliable protection than specialized instruments designed to profit from market crashes.
The portfolio performance review tells the real story – while traditional stock allocations struggle, our diversified sample portfolios are mostly holding steady or positive for the year. Historical patterns suggest diversified portfolios experience down years only about 20% of the time versus 30% for traditional approaches – a meaningful difference that compounds over retirement timeframes.
Have questions about navigating today's challenging markets? Send them to frank@riskparityradio.com – I'd love to answer them in an upcoming episode!
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In this episode we reflect on our recent meet-up and answer emails from Chris, Gigi and Mark. We discuss preferred shares funds and PFFA in particular, considerations about allocations in a TSP based on goals and current progress in your financial life, and them thar new-fangled return stacked funds.
Links:
PFFA Summary: PFFA – Virtus InfraCap US Preferred Stock ETF – ETF Stock Quote | Morningstar
Return Stacked Funds Page: Home - Return Stacked® ETFs
Amusing Unedited AI-Bot Summary:
Welcome to the dive bar of personal finance and do-it-yourself investing, where Frank Vasquez serves up straight talk with a splash of humor. This episode tackles core investment principles that cut through the noise of complex financial products and contradictory advice.
Frank begins by exploring preferred shares funds, specifically PFFA, explaining why its 20% leverage delivers higher returns but also brings greater volatility and a concerning 2%+ expense ratio. This leads into a deeper discussion about when specialized investment vehicles make sense for different investors and why tax implications matter when considering preferred shares positions.
The heart of the episode focuses on a listener's TSP allocation question, which Frank uses to illustrate a fundamental investment truth: many investors start at the wrong end of the planning process. Rather than beginning with fund selection, Frank outlines the proper sequence: first determine your overall financial needs, then establish appropriate asset allocations, and only then select specific funds. He draws an important distinction between accumulation portfolios (where growth is paramount) and retirement portfolios (where volatility management becomes critical).
Throughout the conversation, Frank emphasizes that diversification primarily reduces volatility rather than enhances returns. This insight proves particularly valuable when evaluating new investment products like return-stacked ETFs that combine traditional assets with alternatives like managed futures and merger arbitrage. While intriguing, Frank suggests most investors would benefit more from simpler approaches with established track records.
Whether you're nearing retirement or still in accumulation mode, this episode delivers clear frameworks for making better investment decisions, reminding us that successful investing stems from understanding your unique financial situation rather than chasing complicated strategies. Want more straight talk on building effective portfolios? Subscribe, leave a review, or reach out to frank@riskparityradio.com with your questions.
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In this episode we answer emails from Randy, Richard and Jamie. We discuss rebalancing frequency, share-lending at Fidelity, moves in Morningstar's style boxes and strips treasury funds vs. long term treasury bond funds.
And we announce the new listing of the Golden Ratio portfolio at Portfolio Charts and thank Tyler and Van for that.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Golden Ratio Portfolio at Portfolio Charts: Golden Ratio Portfolio – Portfolio Charts
Golden Ratio Portfolio Write-Up: Beautiful Constants and the Golden Ratio Portfolio – Portfolio Charts
Kitces Article re Rebalancing:
Optimal Rebalancing – Time Horizons Vs Tolerance Bands
Discussion of Changes to Morningstar's Style Boxes: Morningstar redefines growth/value style box criteria - Bogleheads.org
Risk Parity Radio All Episodes Feed Page: Risk Parity Radio RSS Feed
Amusing Unedited AI-Bot Summary:
Exciting news opens this episode as Frank announces the Golden Ratio Portfolio has been officially added to Portfolio Charts, complete with its own dedicated page and insightful write-up. This recognition represents a significant milestone for a portfolio strategy that has been a cornerstone topic throughout Risk Parity Radio's 400+ episodes.
The heart of the episode focuses on answering thoughtful listener questions about portfolio management techniques. Randy inquires about rebalancing frequency and whether to participate in Fidelity's securities lending program for gold ETFs. Frank explains that while rebalancing more frequently than once a year generally doesn't improve performance, coordinating semi-annual rebalancing with tax planning can be advantageous. As for securities lending, Frank shares his personal experience that these programs work smoothly but typically generate minimal income—setting realistic expectations for listeners considering this option.
A particularly detailed discussion explores the nuances between traditional long-term treasury funds and STRIPS funds (GOVZ, ZROZ, EDV). Frank clarifies that STRIPS-based ETFs typically move at approximately 1.5 times the rate of standard long-term treasury funds when interest rates change, effectively functioning as a form of leverage. This characteristic makes them valuable tools for tax-loss harvesting or creating more efficient allocations by achieving similar interest rate sensitivity with smaller position sizes. Rather than focusing on market timing for transitions between these instruments, Frank emphasizes coordinating such moves with broader tax management strategies—practical advice that demonstrates how risk parity investors can implement sophisticated portfolio techniques while maintaining tax efficiency.
Want to connect with other Risk Parity Radio listeners? Frank announces a meetup at the Economy Conference at the Solari Hotel. Email frank@riskparityradio.com for details and to join the community of thoughtful DIY investors exploring alternatives to traditional asset allocation.
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In this episode we answer emails from Dustin, MyContactInfo, and Mark. We discuss the ETF GDE and combo return stacked funds generally, why you probably don't want to use economists' "life cycle model" for personal finance planning due to its unrealistic underlying assumptions, and whether we could use historical high interest rates to create market timing and allocation signals between stocks and bonds.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Article About BTGD: New ETF Offers Dual Exposure to Bitcoin, Gold | etf.com
Optimized Portfolios Site: Optimized Portfolio - Investing and Personal Finance
Rational Reminder Podcast Re Lifecycle Model: Ben Mathew: The Lifecycle Model vs. Safe Withdrawal Rates (SWR) | Rational Reminder 340
Debunking Economics: Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned?: Keen, Steve: 8601406370678: Amazon.com: Books
Amusing Unedited AI-Bot Summary:
When market turbulence strikes, diversification proves its worth. This week, as the S&P 500 tumbles nearly 4% year-to-date and the NASDAQ falls over 6%, gold emerges as the standout performer—surging past $3,000 an ounce with returns exceeding 13%. These dramatic market movements create a perfect real-world demonstration of why uncorrelated assets matter in portfolio construction.
We dive deep into the limitations of economic models for personal financial planning, examining why the Life Cycle Model—while logically sound in theory—falls apart when confronted with life's inherent unpredictability. The assumption that we can accurately forecast our lifespans, relationships, and changing preferences decades in advance reveals a fundamental disconnect between theoretical economics and practical personal finance.
A thought-provoking listener question explores whether allocation strategies should shift dramatically if interest rates ever reach levels where risk-free returns match or exceed historical stock returns. Drawing on lessons from the early 1980s when Treasury yields exceeded 15%, we consider why developing investment rules based on rare historical anomalies rarely serves investors well.
The weekly portfolio review shows mixed performance across our eight sample portfolios, with those holding significant gold allocations weathering the current volatility far better than stock-heavy alternatives. We also examine rebalancing decisions for the Levered Golden Ratio portfolio, making thoughtful adjustments to improve its value tilt and diversification characteristics.
Whether you're curious about combining assets in hybrid funds, wondering how managed futures perform during market corrections, or simply wanting to see how different portfolio strategies are navigating current conditions, this episode delivers practical insights for the thoughtful, independent investor. Join us for this exploration of asset allocation in uncertain times.
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In this episode, we answer emails from Spencer, Ko and Steve. We discuss REITs as a portfolio allocation, why vacant land is probably not a good investment for most people, "talking your book" with bitcoin for fun and profit and how it looks today in a portfolio, law school education and that infamous Cederburg paper (again but only briefly).
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
NAREIT -- Types of REITs: Learn about Investing and Market REIT Sectors Today
Weird Portfolio: Weird Portfolio – Portfolio Charts
Ko's Michael Saylor Video: Michael Saylor’s Big Bitcoin Prediction | Relai Bitcoin Podcast #90
Amusing Unedited AI-Bot Summary:
Ever caught yourself obsessing over a particular asset class? In this engaging episode of Risk Parity Radio, Frank Vasquez tackles three fascinating investment topics that challenge conventional wisdom while providing practical guidance for DIY investors.
We begin with an exploration of REIT allocations beyond the standard 10% recommendation. Frank breaks down why correlation with broader markets matters more than yield history, why individual REITs often outperform REIT index funds for diversification purposes, and why these investments belong in retirement accounts rather than taxable brokerage accounts. A listener's cautionary tale about vacant land investing serves as a powerful reminder that illiquid, non-income-producing assets can become financial quicksand rather than solid foundations for retirement.
The conversation shifts to Bitcoin's evolving role in investment portfolios. Frank cuts through the promotional noise from crypto evangelists, explaining how Bitcoin's behavior has transformed from a true diversifier to essentially "a three times leveraged QQQ fund" highly correlated with tech stocks. This critical insight helps investors properly categorize crypto within their asset allocation rather than viewing it as a separate diversifying asset class.
Finally, we examine the controversial academic paper promoting 100% equity portfolios for retirees. Frank exposes the significant limitations of this research, demonstrating why seemingly groundbreaking financial theories often collapse under real-world scrutiny. Throughout the episode, Frank's pragmatic approach reminds us that successful investing requires looking beyond popular headlines and understanding the fundamental characteristics of what we own.
Whether you're rethinking your REIT strategy, curious about crypto's place in your portfolio, or questioning conventional retirement wisdom, this episode offers clarity amidst the noise of financial media. Share your own investment questions at frank@riskparityradio.com and join our growing community of thoughtful DIY investors.
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In this episode we answer emails from Eli, Garrison and Van. We discuss usig treasury strips ETFs like GOVZ and ZROZ and how they relate to long-term treasury bond funds like TLT and VGLT, a "returned-stacked" portfolio similar to O.P.T.R.A. for accumulation and early retirement and why the Golden Ratio portfolio performs very well on many metrics.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Charts Portfolio Matrix Tool: Portfolio Matrix – Portfolio Charts
(Note to compare the discussed Golden Ratio portfolio to other portfolios, input 21% LCG, 21% SCV, 26% LT bonds, 16% gold, 10% REITs and 6% t-bills as "My Portfolio")
Amusing Unedited AI-Bot Summary:
Dive into the nuanced world of portfolio construction with insights that challenge conventional wisdom about retirement planning and asset allocation. We kick off with an exploration of treasury bond strategies, examining whether STRIPS funds like ZROZ or GOVZ offer "free" 1.5x leverage compared to standard long-term treasury funds. This seemingly technical distinction opens fascinating possibilities for freeing up portfolio space while maintaining effective recession hedging.
The heart of the episode tackles a young investor's audacious plan for early retirement using a leveraged portfolio containing 11% UPRO (3x leveraged S&P 500) alongside small-cap value, treasuries, gold, and managed futures. We dissect the Monte Carlo simulations suggesting sustainable withdrawal rates above 6% and consider whether such "return stacked" portfolios represent the future for younger investors seeking growth with manageable volatility.
Most surprising is our deep dive into the Golden Ratio portfolio, which a listener discovered ranks #1 overall on Portfolio Charts despite containing just 42% stocks. We unpack the five fundamental rules that drive this portfolio's exceptional performance: strategic stock allocation between 40-70%, balanced growth and value exposure, precise treasury bond positioning, thoughtful alternative asset integration, and minimal cash holdings. The revelation that this construction is essentially an expanded 60/40 portfolio demonstrates how traditional wisdom can be enhanced rather than abandoned.
Our weekly portfolio review reveals gold's dominant performance in 2023 (up 10.89%) while small-cap value struggles (down 6.47%), reinforcing the value of thoughtful diversification in navigating today's market landscape. Whether you're planning for early retirement, optimizing your current portfolio, or simply seeking investment wisdom beyond mainstream advice, this episode delivers practical insights for the serious do-it-yourself investor.
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In this episode we answer emails from Caleb, Visitor #4565, Paul, Michael (from Scotland) and Jamie. We discuss tax location (or asset location for tax purposes), the zeitgeist of this podcast, an old book by Don Coxe about gold and other things, a good website for finding ETFs in the UK and otherwise outside the US, and how to best incorporate and prioritize (not) international vs. US funds.
Links:
Asset Swaps Video: How to Do an Asset Swap
Sean Mullaney On 72(t): 475 | How to Access Your Retirement Accounts Before 59.5 | Sean Mullaney
Mad Fientist on Accessing Retirement Funds Early: How to Access Retirement Funds Early
Merriman ETF Recommendations: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation
JustETF website and Sample Small Cap Value Fund: SPDR MSCI USA Small Cap Value Weighted UCITS ETF | A12HU5 | IE00BSPLC413
Amusing Unedited AI-Bot Summary:
Get ready for an enlightening episode of Risk Parity Radio, where we unravel complex investing strategies designed for the do-it-yourself investor! In this episode, we dive deep into key topics like the critical distinction between asset allocation and tax location, helping you understand how to manage your investments more efficiently. With listener emails sparking insightful discussions, we shed light on the often-misunderstood role of gold in your portfolio and why it might be a savvy addition during economic uncertainties.
We explore how misconceptions in diversification can derail potential growth and offer tactical advice on choosing between growth and value investments. Listeners will gain a holistic view of their assets, empowering them to make informed decisions that align with their long-term financial goals.
Whether you’re a seasoned investor looking to refine your strategies or a beginner eager to learn, this episode provides valuable insights to enhance your portfolio's performance. Join us for an engaging conversation that invites you to reflect on your approach to investing. Don't miss your chance to redefine your financial strategy today! Subscribe, share, and review—we’d love your thoughts!
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In this episode we answer emails from Andy, Mark and Graham. We discuss what may do well under the current US administration and related concerns, what a weak dollar means for risk assets and allocating to volatility, and how inflation should realistically be accounted for in withdrawals.
And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
New Catching Up to FI Podcast with Yours Truly: “The Risk Parity Paradox” an Exercise in Simple Complexity? | Frank Vasquez | 124
US vs International Stocks In Strong And Weak Dollar Markets (link from Episode 393: us-dollar-strength-has-correlated-with-performance-03312023.pdf
Spending Trajectories After Age 65 Research Paper and Summary (link from Episode 336): Spending Trajectories After Age 65: Variation by Initial Wealth | RAND
Amusing Unedited AI Bot Summary:
Unlock the secrets of resilient investing with our latest episode of Risk Parity Radio! Join us as we explore the dynamic relationship between risk and reward in today's unpredictable market landscape. With insights from Frank Vasquez, we discuss how various asset classes, including gold and bonds, are performing amid rising economic uncertainty.
We feature an in-depth analysis of eight sample portfolios, shedding light on their performances and the lessons they offer for individual investors. Our host encourages listeners to reflect on their investment strategies and promotes the importance of diversification as a safeguard against market fluctuations.
Listeners are invited to engage with us through insightful emails, tackling current economic concerns such as inflation and its implications for retirees. Wrap up the episode with practical advice, encouraging self-education and proactive engagement in personal financial management.
Don’t miss this opportunity to refine your financial strategies! Subscribe, share your thoughts, or leave a review to join our growing community of informed investors.
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In this episode we answer emails from Philip, David and Keith. We discuss an aggressive risk-parity style portfolio (without leverage), review QREARX, which we analyzed in Episode 81, and how the value factor is determined by various funds and indexes.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Matrix Tool at Portfolio Charts: Portfolio Matrix – Portfolio Charts
The Weird Portfolio: Weird Portfolio – Portfolio Charts
Morningstar Page for QREARX: QREARX – TIAA Real Estate Account Fund Stock Price | Morningstar
Amusing Unedited AI-Bot Summary:
Ready to rethink your investment strategies? Discover how pushing the boundaries with aggressive risk parity portfolios can transform your financial growth. Inspired by listener Philip's question, we unravel the potential of a 70% equity allocation, showing you why it might be your ticket to a prosperous retirement with a longer horizon or increased growth needs. Learn how to artfully allocate the remaining 30% across assets like large-cap growth, small-cap value, long-term treasuries, gold, and managed futures for optimal diversification. Plus, get the scoop on our informal meetup at the Economy Conference—it's where finance meets fun.
In this episode, we're not just about strategies but interactions. As we sift through listener emails, we spotlight financial strategies and fund analysis, tackling topics from the intriguing weird portfolio to critiques of funds like QREARX. Unearth the complexities of value stock categorization and challenge the purported benefits of illiquidity premiums in outdated financial structures. As travel plans call for a brief hiatus, we invite you to keep the conversation alive through emails and our website. Tune in for insights, engagement, and a touch of humor designed to entertain and inform our valued listeners.
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In this episode we answer emails from Richard, Robert and Jacob. We discuss Richard's generosity and excellent example as a role model, an ill-conceived and biased critique of small cap value allocations, why you probably should not use popular personal finance gurus as retirement role models due to their workaholism and hoarding behaviors, and why having too much cash or very short term bonds in a portfolio is not a good idea.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
ERN Small Cap Value Article of 2 December 2024: Small-Cap Value Stocks: Diversification or Di-WORSE-fication? - Early Retirement Now
First Merriman Response to SCV Article: The True Story About Small Cap Value
Supplemental Merriman Responses To SCV Article: Why should small cap value make higher returns?
Testfolio Comparison Of IWN vs. IJS vs. VISVX vs. DFSVX vs VFINX Since July 2000: https://testfol.io/analysis?s=gkqbgk7mzka
Shannon's Demon Article Re Math Of Diversification: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
ERN Safe Withdrawal Rate Post of 15 April 2016: Pros and cons of different withdrawal rate rules - Early Retirement Now
Michael Batnick Article re Shifting In CAPE Ratio: Stocks Are More Expensive Than They Used to Be
Rick Ferri Interview: Show Us Your Portfolio: Rick Ferri | Why a Simple Approach Beats 90% of the Pros
Core 4 Portfolios: Process – Core-4
Rob Berger Interview (with transcript): Bogleheads on Investing with Rob Berger – Episode 48 - The John C. Bogle Center for Financial Literacy
Interview of Michael Kitces Re Problems With TIPS Ladders: Michael Kitces: How Higher Yields Affect Asset Allocation and Retirement Planning | Morningstar
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In this frolic and detour from our regularly scheduled programming, we create a "Reference Episode" by employing two AI podcasters to summarize the information contained in Episodes 1, 3, 5, 7 and 9, which are some of the foundational episodes for this podcast. BTW, choose PFFV instead of PFF if you are interested in that. But the point was to teach you how to analyze investments.
Here are (most of) the original links and notes from those episodes.
Episode 1:
In this episode we answer five basic questions:
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What is Risk Parity Radio?
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Who is this podcast for?
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Gee willikers, what does "Risk Parity" mean anyway, Uncle Frank?
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How will will make this real and actionable for you?
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How can you get involved?
Episode 3:
In this episode we explore the ancient origins of asset allocation and diversification.
Bava Metzia 42a: https://steinsaltz.org/daf/bavametzia42/
70-year History of Investment Consulting: https://seekingalpha.com/article/4357226-70-year-history-of-investment-consulting-1950minus-2020
Episode 5:
In this follow-up to Episode 3, we explore the development of risk-parity style investing from the 1980s to the present day.
The All Weather Strategy Paper: Bridgewater Paper 2009.12 AW Info Pack.doc (granicus.com)
Risk Parity Portfolios: Efficient Portfolios Through True Diversification: https://www.panagora.com/assets/PanAgora-Risk-Parity-Portfolios-Efficient-Portfolios-Through-True-Diversification.pdf
Risk Parity: Silver Bullet Or A Bridge Too Far: chapter-4-from-managing-multiasset-strategies-2018.pdf (callan.com)
Episode 7:
In this episode we discuss the three basic principles are (1) the Holy Grail Principle; (2) the Macro-Allocation Principle; and (3) the Simplicity Principle.
March draw-downs for professional risk-parity style portfolios: https://www.markovprocesses.com/blog/risk-parity-funds-in-the-coronavirus-market-rout/
Ray Dalio explains the Holy Grail principle of risk-parity style investing: https://www.youtube.com/watch?v=Nu4lHaSh7D4
Episode 9:
In this episode we discuss how NOT to choose investments and how to employ a good process to analyze an investment. We adopt the process of David Stein's 10 Questions and apply it to an exchange-traded fund of preferred stocks.
Ishares description of PFF: https://www.ishares.com/us/products/239826/ishares-us-preferred-stock-etf
The 10 Questions To Ask When Considering An Investment:
1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?
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In this episode, we celebrate Ground Hog Day and answer emails from Ron, Jay and Pete. We discuss the value of giving and the new McKenna Man portfolio that Ron is constructing, preferred shares vs. REITs, holding gold, what financial advisors really think about their hoarding clients but can't say in front of them but I will, and Pete's risk parity style portfolio and his 6-year old's potato chip gambling problem.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Dennis And The McKenna Center Team: Our Team - Father McKenna Center
Andy Panko Interview of Eric Niergarth:
Retirement planner chat, with Eric Niergarth from Retirement Roadmap Financial Planning
Pete's Fund and Correlation Analysis:
https://testfol.io/analysis?s=4Qh1xI3JKMl
Amusing Unedited AI-Bot Summary:
Unlock the secrets of alternative investments and discover a fresh perspective on asset allocation with Risk Parity Radio. Ever wondered how creative financial strategies can transform charitable giving? Listen in as we highlight Ron, a dedicated listener, who proposes an innovative approach to support the Father McKenna Center in Washington, D.C. We'll dissect his all-equity portfolio idea, and explore an alternative inspired by the Rick Ferri Core 4 portfolio, tailored for an 8% withdrawal rate. This episode promises to inspire with its blend of community-focused financial creativity and solid investment insights.
Curiosity piqued? Learn why PFFV trumps PFF in cost-effectiveness and tax benefits, especially for those in higher tax brackets. The episode tackles listener questions head-on, like the VNQ versus PFF debate, and shines a light on the essential role of gold in diversification. A personal tale unfolds as I recount my unexpected removal from Andy Pankow's Facebook group, sparking a discussion on the dynamics of online financial communities. This engaging narrative provides a nuanced view of maintaining a steady allocation amidst the ebb and flow of digital interactions.
Explore the lighter side of finance as we analyze the performance of various portfolios in a quirky review of January's market highlights. With imaginative requests, like a breakfast order for the "bacon man," and the intriguing concept of combining Bitcoin and gold in an ETF, this episode offers both entertainment and education. From the conservative All Seasons to the experimental Golden Ratio, each portfolio reveals unique allocations and outcomes. Join us on this enlightening journey through investment strategies, and uncover the unexpected joys of charitable giving through creative financial planning.
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In this episode we answer emails from George, Kyle and Andy. We discuss whether to prioritize DBMF or VGLT (for tax location purposes) in a traditional retirement account, weighing limited choices for small cap funds in a 457, Vanguard's new short-term bond funds and dealing with brokerages' cya requirements for investing in particular funds.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Vanguard Fund Announcement: Vanguard Expands Fixed Income Lineup with New Actively Managed Bond ETF | Vanguard
Amusing Unedited AI-Bot Summary:
Unlock the secrets to optimizing your investment portfolio and navigate the complex world of power dynamics in our latest podcast episode. Have you ever wondered whether choosing a higher dividend yield or balancing fund fees could impact your financial future? Join us as we guide George through the decision-making process between VGLT and DBMF, ultimately landing on DBMF for its tax-efficient benefits. Meanwhile, Kyle finds himself at a crossroads between a high-fee small-cap value fund and a more budget-friendly Vanguard option. Our advice? Balance is key to managing costs and maintaining a diverse portfolio. And don’t miss our take on Vanguard's new actively managed short-term bond fund—could it be the missing piece in your investment strategy?
Transitioning from the tangible to the philosophical, we embark on a thought-provoking exploration of submission and power through our metaphorical dialogue with "the daughters." Here, we challenge the conventional wisdom of power structures and the humility required to navigate them. Using vivid metaphors and evocative imagery, we invite listeners to question their own roles within these paradigms and consider how such dynamics manifest in financial and legal realms. This episode promises a blend of practical investment insights with deeper musings on the human condition, leaving you with plenty to ponder as we draw parallels between finance and life’s broader themes.
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In this episode we answer emails from Bones, Paul and Justin. We discuss small cap value funds and their underlying indexes, an odd book from an unreliable source and an alternative ETF called CAOS.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Bankruptcy Case Involving David R. Webb: In re Verus Investment Management, LLC, 344 B.R. 536 | Casetext Search + Citator
CAOS Main Page: CAOS ETF - Alpha Architect ETFs
CAOS Fact Sheet: Factsheet_CAOS.pdf
Amusing Unedited AI-Bot Summary:
What if your investments could outpace market trends with a simple shift in strategy? On Risk Parity Radio, we promise to unravel the complexities of asset allocation, specifically tailored for the DIY investor. We kick off with a deep dive into the world of small-cap value funds, dissecting the evolution of Vanguard’s funds alongside iShares' stalwart, IJS. The competition heats up with new entrants like Avantis and Dimensional, particularly the rising star AVUV. With insights from Paul Merriman's research, we explore why diversifying into small-cap value can be a game-changer for your portfolio, no matter which fund you choose.
Ever wondered if an investment product could thrive in both stable and volatile markets? Enter Wes Gray’s Alpha Architect product, Chaos, which challenges traditional investing with tools like protective puts and box spreads. We bring you a thorough examination of this intriguing product and a candid discussion about its potential and risks. Our analysis extends to sample portfolios, showcasing the power of diversification with assets ranging from the S&P 500 to commodities. We wrap up by contrasting popular portfolios like the All Seasons and Golden Butterfly with the experimental Accelerated Permanent Portfolio, making sure you are equipped with cutting-edge strategies to optimize your investments.
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In this episode we answer emails from Lucas, Martijn, and Alexi (a/k/a "the Dude"). We discuss futures contracts and the efforts required to use them, being careful about backtests and interpreting them, and more musings on Big Mo momentum.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Martijn's Link: testfol.io/?s=aoTgPMqhGQA
Portfolio Matrix (Start Date Sensitivity): Portfolio Matrix – Portfolio Charts
The Dude's First Link: Asset Correlations
The Dude's Second Link: testfol.io/?s=aKrdp1uCnEu
The Dude's Third Link: testfol.io/?s=kUK5djVum0A
Amusing Unedited AI-Bot Summary:
Unlock the secrets of futures trading and leveraged ETFs as we tackle complex investment strategies, inspired by a thought-provoking listener email from Lucas. Discover how you can master the intricacies of futures contracts, from rolling them over to navigating market conditions like backwardation and contango, without getting overwhelmed. Learn why leveraged ETFs were created to simplify leverage acquisition, and get insider recommendations on the best platforms to embark on futures trading. Martain, another keen listener, challenges us with a debate on straightforward 1.5 times equities strategy versus modern portfolio theory, leading to a rich discussion on investment approaches.
Venture further into the world of leveraged risk parity portfolios and how hedge funds are using them to optimize risk-reward profiles during the accumulation phase. Comparing these advanced strategies to more straightforward leveraged S&P portfolios, we emphasize the essential role of historical data in shaping robust investment decisions. Be wary of the allure of short-term gains as we dissect the role of momentum funds in risk parity portfolios and the significance of diversification in securing stable outcomes. Through listener insights and expert analysis, this episode is a treasure trove for anyone seeking to broaden their understanding of strategic investing.
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In this episode we answer emails from Paul (from Canada), Gary, Ben and Alexi (a/k/a "the Dude"). We discuss finding funds for Canadians, podcast outlet alternatives, the similarities between S&P 500, total market and large cap growth funds and how they can perform the same role in a diversified portfolio, and a gnarly Alpha Exchange podcast about leveraged funds (which the Dude and I both misidentified as "Alpha Architect".) And the Creedence vs. Tina Turner versions of "Proud Mary."
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Portfolio Charts Golden Butterfly page: Golden Butterfly Portfolio – Portfolio Charts
Asset Correlations (VTI and VOO and large cap growth): https://testfol.io/analysis?s=63nAL9efMMg
Golden Butterfly With Total Market vs. Large Cap Growth: https://testfol.io/?s=h0ZxYu0txcP
Alpha Exchange Podcast on Leveraged Funds: Michael Green, CFA, Portfolio Manager, Chief Strategist, Simplify Asset Management | Alpha Exchange
Amusing Undedited AI-Bot Summary:
Unlock the secrets of successful portfolio diversification on this episode of Risk Parity Radio. Whether you're navigating the Canadian stock market maze or strategizing with U.S. index funds, our conversation will equip you with the tools to conquer currency conversion challenges and leverage international market access through platforms like Interactive Brokers. We share strategies to optimize your asset mix by combining large cap growth with small cap value funds for a truly diversified and resilient portfolio.
Ever wondered how to differentiate between total market funds and large cap growth funds? Our discussion sheds light on their high correlation and recent performance trends, urging investors to focus on macro allocation principles and informed bond choices rather than getting lost in the minutiae of fund selection. Discover how pairing assets with varying volatilities and correlations can lead to a more robust investment strategy that withstands market turbulence.
Dive into the world of leveraged ETFs and learn about the risks lurking behind these financial instruments. We dissect insights from the Alpha Exchange podcast, stressing the importance of liquidity in minimizing systemic risk. As we share our weekly portfolio reviews, you’ll gain valuable insights into market performance and the art of strategic rebalancing. From conservative to dynamic portfolios, we offer a comprehensive look at maintaining diverse asset allocations to optimize growth and stability. Reach out with your questions and explore our website for more resources on mastering the investment landscape.
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In this episode we party with some of the regulars and answer emails from Pete, Tracey, Ralph and Alexi (a/k/a the "Dude"). We discuss domestic and international large cap growth funds, why we prefer portfolios that due comparatively better when using long series data analyses and not their associations with particular guru people, how the Golden Ratio portfolio relates to the 60/40 portfolio, whether you'll see me on Bluesky or most other social media ("no"), and the Dude's continued gambling problems with his Sixty Sixty Portfolio.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Pete's Correlation Analysis Link: Asset Correlations
IDMO Fund: IDMO – Invesco S&P International Dev Momt ETF – ETF Stock Quote | Morningstar
International Large Cap Growth Fund Comparison: testfol.io/analysis?s=4PEQ1YvTbAM
Portfolio Matrix Comparison Tool: Portfolio Matrix – Portfolio Charts
The Dude's Sixty-Sixty Portfolio And Comparisons: testfol.io/?s=1bInsY2fEmI
Amusing Unedited AI-Bot Summary:
Can you really diversify your portfolio internationally without getting tangled in global market correlations and geopolitical webs? On this episode of Risk Parity Radio, we promise to unravel the mysteries of international large-cap growth ETFs and share insights on navigating beyond U.S. equities with flair. Listener Pete joins us from an airport terminal, seeking our expertise on innovative sectors like tech and semiconductors. We dissect options such as IMTM and EMQQ, weighing their benefits and risks, particularly in the context of Chinese equities. We keep things lively with a light-hearted approach to managing personal finance, reminding you that while investing is serious, there's always room for a bit of humor and creativity.
Switching gears, we ditch traditional portfolio strategies and explore modern frameworks for reducing retirement drawdowns. By harnessing tools like Portfolio Charts, we dive into strategies like the Golden Ratio and Golden Butterfly, comparing them to the old-school 60-40 portfolios. Our aim is to empower you to base decisions on data, not outdated norms. We also discuss the role of growth ETFs in deaccumulation, and venture into the world of innovative portfolios like the 60-60 model, while examining the influence of social media on investing. Throughout, we champion independent thinking and celebrate the vibrant contributions of our engaged community.
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In this episode we answer questions from Anonymous European, Paul, and Ralph. We discuss US vs. Euro treasury bonds, international large cap growth, the overarching currency effect that determines the relative performance between US and international stocks, small cap value for UK investors and what to do with a small 401a with limited investment choices while nearing retirement.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Many Happy Returns Podcast with Tyler: Building a Bulletproof Retirement Portfolio, with Tyler from Portfolio Charts
Global Withdrawal Rates Article: Global Withdrawal Rates – Portfolio Charts
DILRX International Large Cap Growth Fund: DILRX – DFA International Large Cap Growth Fund Stock Price | Morningstar
US vs International Stocks In Strong And Weak Dollar Markets: us-dollar-strength-has-correlated-with-performance-03312023.pdf
ZPRX European Small Cap Value Fund: ZPRX : SPDR® MSCI Europe Small Cap Value Weighted UCITS ETF
Amusing Unedited AI-Bot Summary:
Could US Treasury bonds be the ultimate recession insurance for European investors? We kick off this episode with a provocative question that challenges conventional thinking in the bond market. Joined by Tyler from Portfolio Charts, we dissect the strategic positioning of US Treasury bonds versus European options like the Amundi Euro Government Bond Fund. Discover why many international investors gravitate toward US bonds during economic downturns and learn the crucial role of asset correlations in achieving the optimal portfolio diversification.
Shifting gears, we tackle a common misconception about large-cap investments: does a company's headquarters dictate its investment potential? In a world where global operations blur geographic lines, we question the necessity of strictly international large-cap growth funds. Dive into the fascinating impact of currency fluctuations on stock performance and explore how these shifts often drive diversification, rather than the mere presence of international stocks. Our insights aim to empower you in crafting a more globally balanced portfolio.
As retirement looms for those in their late 50s, the decision between sticking with a 401A or transitioning to an IRA becomes paramount. For someone with multiple pensions covering living expenses, we weigh the merits of various investment strategies. While VINIX may offer benefits within a 401A, the broader options available through an IRA, including ETFs, might better suit your growth and stability needs. For those craving simplicity without sacrificing balance, the Vanguard Wellington Fund emerges as a compelling choice. Tune in for a comprehensive guide to aligning your retirement portfolio with your long-term goals.
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In this episode we answer emails from Kyle, Steve and James. We discuss the three most common small cap value indexes -- S&P 600, CRSP and Russell, modifications to the Golden Butterfly portfolio using managed futures, and the fantasies and follies of portfolio Bucketeering.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Steve's Modified Golden Butterfly: testfol.io/?s=hJZl3QbaXsj
Merriman's Best In Class ETFs: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation
Kitces Article About Bucket Strategies: Managing Sequence Risk: Bucket Strategies Vs Total Return
Amusing Unedited AI-Bot Summary:
Can equal-weighted ETFs outperform their cap-weighted counterparts? Find out as we break down their impact on factor representation within diversified portfolios, focusing on strategies like the Golden Butterfly. Join me, Frank Vasquez, in our latest episode as I discuss listener questions and share insights on choosing between Invesco's RSP and traditional options like SPY or VOO. I'll also revisit my preference for the small-cap value ETF VIOV over VBR, emphasizing the advantages of the S&P 600 index's unique profitability filter. This episode is packed with knowledge to help you refine your portfolio allocation strategies, with a special focus on the role of managed futures and their influence on compound annual growth rates and drawdowns.
Shatter the myth of bucket strategies as we confront their limitations in mitigating sequence of returns risk. Drawing on Bill Bengen's studies, I argue that excessive cash allocations hinder performance more than they help. We explore the psychological allure of bucket strategies and suggest that true financial security lies in prudent spending rather than complex asset arrangements. Tune in as we offer a fresh perspective on managing your financial future, challenging conventional wisdom and emphasizing smarter, evidence-based approaches to portfolio management. Whether you're a seasoned investor or just starting, this episode promises valuable insights and a chance to rethink traditional investment strategies.
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In this episode we conduct our annual reviews of the Eight Sample Portfolios you can find at Portfolios | Risk Parity Radio and compare them with some commercial preparations.
In addition we discuss the year of 2024 in general, the performance of various asset classes, the follies of using the year as a crystal ball to predict the future, and the more effective use of base rates for that purpose. And the missing Santa Claus.
Links:
Portfolio Charts Annual Returns Calculator: Annual Returns – Portfolio Charts
Testfolio Backtesting and Analysis Site: testfol.io
Amusing Unedited AI-Bot Summary:
Uncover the secrets to constructing a resilient investment portfolio while sidestepping the pitfalls of misguided financial predictions. Join me, Frank Vasquez, as I humorously dissect the world of economic forecasts and their accuracy, or lack thereof. Through a historical lens, we’ll examine past events like the 1970s inflation scare and the 1990s dot-com bubble, revealing the wisdom in relying on historical base rates for more stable predictions. This episode promises to arm you with critical insights from Morgan Housel and transform your understanding of market trends, using relatable analogies like dice rolls to make the probabilities clear and engaging.
Engage with a treasure trove of data as we review eight sample portfolios, shedding light on the roller-coaster performances of various assets over the past year. From the triumphs of large-cap growth stocks and gold to the contrasting fates of different sectors, discover the vital role of diversification. With a focus on both domestic and international opportunities, I outline the highs and lows, such as the standout performance of the MAG-7 and the challenges faced by REITs, while emphasizing the benefits of a diversified portfolio.
Finally, I unravel the performance of diverse investment strategies, including risk parity models and experimental leveraged portfolios. Unpack the complexities of asset allocations and the unique challenges posed by leverage, with insights into the successes and lessons learned. To wrap it up, I weave in a playful narrative about a year without Santa Claus, illustrating the importance of cautious investing amidst unexpected events. This episode blends finance, storytelling, and critical insights into an entertaining and informative package that promises to captivate both seasoned investors and newcomers alike.
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In this episode we answer emails from Kyle, Adam, and Steve. We discuss equal weight vs. cap weighted funds and the fallacy that one fund stock portfolios are optimal, a variable withdrawal strategy plan, and what kinds of portfolios work best for which types of people and purposes.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Donation Page: Donate - Father McKenna Center
Shannon's Demon Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Portfolio Charts Retirement Spending Calculator: Retirement Spending – Portfolio Charts
2024 Morningstar Report Analyzing Variable Withdrawal Strategies: State_of_Retirement_Income_2024.pdf
Swedroe Factor Investing Book: Book Review: Your Complete Guide to Factor-Based Investing | CFA Institute Enterprising Investor
Merriman Best In Class ETFs: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation
Amusing Unedited AI-Bot Summary:
Step into the world of Risk Parity Radio, where we unravel the mysteries of asset allocations and personal finance. Ever wonder how equal weight differs from cap-weighted index ETFs? We promise to guide you through this intriguing comparison, emphasizing the importance of utilizing multiple funds for a comprehensive market strategy. Together with my co-host Mary, we explore how concepts like Modern Portfolio Theory and Shannon's Demon can elevate your portfolio's performance beyond a single-fund approach. And, in a nod to community spirit, we encourage our listeners to support the Father McKenna Center, weaving philanthropy into our financial discourse.
This episode goes beyond the basics, challenging the notion that one-size-fits-all in the world of investing. We dissect the benefits of combining growth and value funds, and highlight the risk management advantages of cap-weighted ETFs. Our heartfelt retirement segment touches on a listener's email about crafting a sustainable portfolio through variable withdrawal strategies. We navigate the nuances of personal inflation adjustments, equipping you with the tools to fortify your financial future. Join us as we counter cognitive biases and fine-tune strategies to align investments with economic realities, ensuring that your financial journey is as robust as it is rewarding.
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In this episode we answer emails from John, Jane and Christoph. We discuss financial and non-financial considerations when transitioning to retirement, the alternative investment strategy fund QSPNX, and revisit why you should not try to time bond investments anymore than you should try to time the stock market.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Choose FI Episode 508 With Yours Truly: 508 | 5% SWR, Revealed Preferences, and the 3 Stories | Frank Vasquez
QSPNX Fund Summary: AQRFunds - AQR Style Premia Alternative Fund
QSPNX Main Page: AQR Style Premia Alternative Fund - QSPNX
Amusing Unedited AI-Bot Summary:
What if your retirement could be as thrilling as a holiday adventure? Tune into our pre-Christmas special on Risk Parity Radio, where we unravel the secrets to crafting a financially stable and fulfilling retirement. Join us as we dissect eight unique sample portfolios, responding to John’s burning questions about transitioning to a risk parity approach. We celebrate John’s upcoming retirement by sharing actionable insights from personal experiences, setting the stage for a journey filled with financial clarity and exciting new opportunities.
Ever wondered how to make your retirement years truly rewarding? Discover the art of lifestyle planning as we weigh the merits of covered call strategies against the traditional buy-and-hold approach. From embarking on early adventure travels to finding joy in volunteering or teaching, we guide you in aligning your financial strategies with your life goals. This is not just about numbers; it's about crafting a retirement that's as enriching as it is financially sound, ensuring your golden years shine brightly.
As we wrap up, we dive into the AQR Style Premia Alternative Fund's niche role in a risk parity portfolio. With a pinch of humor and a dash of nostalgia, we navigate listener emails, including a lighthearted reflection on childhood mishaps and classroom blunders. We end on a playful note, reminding you to embrace the imperfections and enjoy the whimsical side of life. Remember, while our advice aims to enlighten, always turn to your trusted advisors for personalized guidance.
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In this episode we answer emails from Cy, Lucas, and Rafa. We discuss a poem from a financial advisor, a quandary between two gambling problem leveraged portfolios and application of the Macro-allocation Principle, and what to do about a trust with an abbreviated distribution timeline.
Note, we forgot to include the second email from Lucas, but it was just yet another reference to the Cederburg paper that has already been beaten like a dead horse.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Cederburg Paper redux (revised December 2024): Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice by Aizhan Anarkulova, Scott Cederburg, Michael S. O'Doherty :: SSRN
Amusing Unedited AI-Bot Summary:
What happens when AI and financial advice collide in unexpected ways? Join me, Frank Vasquez, as I share an amusing tale of a birthday poem that might just have been crafted by a robot for my client, Randolph. We dive into the hilarious side of AI-generated content and how it intersects with personal finance, pondering the sincerity of such personalized gestures. Alongside these playful musings, we explore listener inquiries, prioritizing those supporting our cherished Father McKenna Center, and trace the ripples of AI's growing role in financial advisory services.
Ever wondered if your investment portfolio could use a strategic shake-up or if classic Western films still hold a place in today's world? We tackle these questions by examining the pros and cons of composite versus aggressive asset class funds, unraveling the complexities of leveraging investments. As a palate cleanser, we venture into a nostalgic realm, reminiscing about the enduring legacies of Western film icons like Gene Autry and Randolph Scott. Their timeless appeal serves as a reminder of past cinematic glory, offering a perfect blend of finance, nostalgia, and entertainment without crossing into the realm of legal or tax advice. Tune in for an engaging journey through these fascinating topics!
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In this episode we answer emails from Ed, Wes and Mary Anne. We revisit the momentum factor and squeeze that lemon a bit (and our dinner with the Dude) talk about mid-caps and limited 401k options, and discuss some of the information on the portfolios page at the website (and its limitations).
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Test Folio Analysis of Large Cap Growth And Momentum Funds: testfol.io/analysis?s=aBroPEsxfLp
Test Folio Analysis of Small Cap Value With Momentum: testfol.io/analysis?s=fjwv647o2PU
Amusing Unedited AI-Bot Summary:
Can a simple shift in investment strategy transform your portfolio's performance? Explore the power of momentum factors with us in this episode of Risk Parity Radio. We unpack a listener's question on how momentum could enhance a diversified mix of large cap growth, small cap value, long-term government bonds, gold, and rental properties. Delve into the nuances of funds like MTUM and QMOM, and discover whether they offer a meaningful edge over traditional large cap growth options. We promise you'll leave with a clearer understanding of when momentum factors might be a game-changer for your investment strategy.
Navigating the complex world of portfolio performance metrics can be daunting. With insights from listener Mary Ann's query, we dissect the intricacies of interpreting performance charts and the importance of total return over an income-only focus. Our conversation touches on tools like Testfolio and Portfolio Visualizer, essential for a consistent, long-term analysis. Don't miss our take on the festive phenomenon known as the Santa Claus rally and how it might impact your financial decisions this December.
As we wrap up, join us for a weekly portfolio performance review, where we assess both traditional and experimental portfolio setups. From the All Seasons to the new Optra portfolio, discover the latest trends and strategies. Stick around for our quirky sign-off and find out how you can interact with us, sharing your thoughts and questions. Whether you're a seasoned investor or just curious about optimizing your financial future, this episode is packed with insights and a sprinkle of humor to keep things lively.
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In this episode we answer email from Pankaj, Matthias and Iain. We discuss the simple path to withdrawals when you are over-saved and the over-complications of the over-saved, reprise some information about leveraged accumulation portfolios and provide some tips for a U.K listener.
Links:
Interview of Jim Grubman: Dr. Jim Grubman: The Psychology of Wealth | Rational Reminder 282
PensionCraft YouTube Channel: What Is The Safe Withdrawal Rate In Retirement?
Many Happy Returns Podcast: Building a Bulletproof Retirement Portfolio, with Tyler from Portfolio Charts - Many Happy Returns
Amusing Unedited AI-Bot Summary:
Could a simple tweak to your investment strategy unlock enhanced withdrawal rates and bolster your legacy savings? We unravel the misconceptions surrounding risk parity portfolios and explore how they truly aim to balance asset risk profiles, not just maximize safe withdrawal rates. Discover innovative portfolios like the golden butterfly and golden ratio designed to potentially boost your financial freedom, especially if your spending is comfortably below 3%. For those more focused on long-term growth, we share Warren Buffett’s straightforward approach: a mix of 90% S&P 500 and 10% T-bills.
Join us as we also highlight the conservative investment habits of financial minds like William Bernstein and Bill Bengen, and the irony of their attraction to simplicity amidst complex financial strategies. We explore the power of leveraging portfolios for high risk tolerance investors with long horizons, discussing how concentration and leverage could elevate your returns. Practical advice on setting up a leveraged portfolio is on the docket, along with the risks you need to consider. Remember, this engaging episode is purely for your entertainment and enlightenment, not financial guidance.
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In this episode we answer emails from Ashley, Alexi (a/k/a "the Dude"), and Sean. We discuss our charity and my financial coaching on the side, fun times with the Dude, and an overview of the use of bonds in a portfolio and principles of portfolio construction. For reference, earlier bond episodes mentioned are 14, 16, 75 and 78, 142, 186 and 232, although there are others you can find on the RSS feed page.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
ChooseFI Podcast With Yours Truly: 194 | The Role of Bonds in a Portfolio | With Frank
Portfolio Visualizer Monte Carlo Simulator: Monte Carlo Simulation
Portfolio Charts Portfolio Matrix Calculator: Portfolio Matrix – Portfolio Charts
Testfolio Site: testfol.io
Amusing Unedited AI-Bot Summary:
Ever wondered how to optimize your portfolio during the distribution phase of your financial journey? Picture this: you're sitting at a cozy dive bar, sipping your favorite drink, while we unravel the art of asset allocation in a way that's both enlightening and entertaining. Join me as I share Ashley's inspiring story, a listener who not only hit an impressive milestone of three million dollars in liquid assets but also made a generous donation to the Father McKenna Center. Her journey is a testament to the power of community and the surprising impact of employer matching in charitable giving.
Brace yourself for a lively tête-à-tête on financial consultation and strategy, complete with tales of delightful dinners and the irreplaceable warmth of human interaction. Discover how a simple evening out with listener Alexi turned into a treasure trove of insights into building portfolios that cater to substantial spending for loved ones. Amidst the laughter and pop culture references, you'll hear musings on AI's role in podcasting and why the human touch remains a cherished component of our discussions in an automated world.
As we meander through the intricacies of bond investing, prepare to challenge conventional wisdom with modern tools like Portfolio Visualizer and Monte Carlo simulations. We'll explore the nuances of bond ETFs and strategic cash allocations, advocating for a more nuanced approach to retirement planning. From understanding the dynamics between stocks and bonds to critiquing typical cash hoarding habits, this episode promises a hearty mix of humor, insight, and practical advice. So grab a seat, and let's embark on this journey to demystify investment strategies while keeping it all delightfully entertaining.
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In this episode we answer emails from Justin, Matt and Donald. We regale in friendships, revisit large cap growth funds with IWY, do a reprise of Episode 238 about the limitations of CAPE ratios with the help of AI podcasters, and discuss the purpose of treasury bonds in a portfolio as recession insurance, and the circumstances of when you might not need it.
Links:
Father McKenna Center Lessons & Carols: Lessons and Carols - Father McKenna Center
Father McKenna Center Donation Page: Donate - Father McKenna Center
Comparison of QQQ, VUG and IWY: testfol.io/analysis?s=6uPSB8ZpIIR
Episode 238: Podcast | Risk Parity Radio Episode 238
Pinwheel Portfolio: Pinwheel Portfolio – Portfolio Charts
Amusing AI-Bot Summary
What if you could navigate the complex world of asset allocation with confidence? Discover the secrets to mastering large-cap growth funds as we share an email from Justin, who pits QQQ, VUG, and IWY against each other, revealing why IWY takes the crown for concentrated growth. As we reminisce about the insightful posts on the Risk Parity Chronicles blog, we also invite you to join us in supporting the Father McKenna Center through our charity event. This episode is a blend of foundational investment principles and community spirit, perfect for both new and seasoned listeners.
Ever wondered how useful the CAPE ratio really is for your retirement plan? We tackle this question head-on, weighing its stability in stock market valuations against its pitfalls in predicting short-term and sector-specific performances. Our conversation highlights the importance of a diversified, flexible portfolio that aligns with your personal values and long-term goals. With insights from the Fama-French model and behavioral economics, we aim to equip you with strategies that mitigate biases and enhance financial decision-making.
Feeling puzzled about the role of long-term treasury bonds in your portfolio? Our discussion, inspired by an email from Donald in the U.S. Navy, examines their necessity as recession insurance and deflation hedges. We trace the evolution of risk parity portfolios, emphasizing the significance of diverse assets in navigating economic uncertainties. Lastly, indulge in a light-hearted reflection on love and technology, as we celebrate connections that transcend the digital realm. Tune in for a heartfelt, humorous, and informative journey with Risk Parity Radio.
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In this episode we answer emails from James, Van and Michael. We discuss the new international fund in the federal TSP, the Pinwheel Portfolio and the Portfolio Matrix Tool, and variations in portfolio management with the Golden Butterfly portfolio.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Father McKenna Center Lessons & Carols: Lessons and Carols - Father McKenna Center
Father McKenna Center Donation Page: Donate - Father McKenna Center
Article About New TSP International Fund: What to Know About the New TSP I Fund | Morningstar
Merriman Best In Class ETFs: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation
Pinwheel Portfolio: Pinwheel Portfolio – Portfolio Charts
Portfolio Matrix Tool: Portfolio Matrix – Portfolio Charts
Amusing Unedited AI-Bot Summary:
Imagine stepping into a world where personal finance feels as cozy and welcoming as your favorite neighborhood bar. On this episode of Risk Parity Radio, hosted by Frank Vasquez, we tackle James' inquiry about the iFund in the Thrift Savings Plan, delving into its recent shifts, and why you might want to consider the C fund or other diversification paths beyond the TSP. The conversation takes an intriguing turn as we discuss how the mighty US dollar sways international investments, urging you to broaden your horizons for potentially richer outcomes.
Join us for a colorful exploration of investment portfolios like the All-Seasons, Golden Butterfly, Golden Ratio, and Risk Parity Ultimate, each with their own flair and strategy. We navigate through last week's market waves, noting which portfolios are riding high and those that are weathering the storm. Venturing into the more adventurous terrain of leveraged funds, we underscore both the thrill and the risks involved. Frank also shares a touch of personal wisdom from his mother's sayings, reminding us that life's journey is full of unpredictable twists—just like the world of investments. Connect with Frank via email or the Risk Parity Radio website, and remember, while we're here to entertain and inform, your financial decisions deserve tailored advice from your trusted experts.
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In this episode we answer emails from George, Alexi (a/k/a "the Dude") and Sean. We discuss a new article about the benefits of managed futures in a portfolio, the Dude's face-off between VUG and QQQ, and considerations for choosing large cap growth funds and international value funds.
Links:
Father McKenna Center Lessons And Carols: Lessons and Carols - Father McKenna Center
New Article About Managed Futures: 2024Q3_QuanticaQuarterlyInsights.pdf
Bloomberg Presentation On Investments In Inflationary Environments: MH201-SteveHou-Bloomberg.pdf
DBMF "Managed Futures 101" Microsite: iMGP DBi Managed Futures Strategy ETF | iM Global Partner
The Dude's VUG vs. QQQ Link #1: Asset Correlations
The Dude's VUG vs. QQQ Link #2: testfol.io/?s=kMopG7yQ6SO
The Dude's VUG vs. QQQ Link #3: testfol.io/?s=2dpHLA3ndmV
The Dude's VUG vs. QQQ Link #4: Factor Regression Analysis
Amusing Unedited AI-Bot Summary:
Discover the power of trend-following strategies and the impact of charitable giving in the latest episode of Risk Parity Radio. We promise you'll gain insights into the effectiveness of managed futures strategies, particularly in high-interest rate environments, and how they can bolster your risk parity portfolios. We also explore listener George's perspective on CTA strategies and dive into the compelling debate of VUG versus QQQ for large-cap growth ETFs. Plus, you'll hear about the incredible work being done by the Father McKenna Center in Washington, DC, and how you can make a difference through their holiday and Giving Tuesday events.
Join us for a thoughtful conversation filled with humor as we engage with our diverse audience, ranging from finance enthusiasts to seasoned investors. This episode is packed with practical financial wisdom that simplifies portfolio management while offering listeners opportunities to support meaningful causes. As we wrap up, we're grateful for your continued support and donations, and we encourage listener engagement through comments, questions, and reviews. Tune in to be part of this vibrant community and enhance your financial journey.
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In this episode we answer an email from Tom, Tom the Podcaster's Son (a/k/a "Patrick Star"). We discuss the basics of retirement accounts in honor of the annual benefits enrollment period and some rules of thumb for contributing to them, with a little commentary on HSAs. We also discuss interesting recent podcasts featuring Bill Bengen, Corey Hoffstein and Cliff Asness. And our friend Jackie Cummings Koski.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Bill Bengen podcast: The Father of the 4% Rule Fina - Afford Anything - Apple Podcasts
Corey Hoffstein podcast: Masters in Business: Corey Hoffstein - Bloomberg
Cliff Asness podcast: Old Man Yells at the Cloud | TCAF 167
Tax Tables: 2024-2025 Tax Brackets and Federal Income Tax Rates | Bankrate
Jackie podcast #1: Jackie Cummings Koski: Late St - The Long View - Apple Podcasts
Jackie podcast #2: From Poverty to Wealth and Ear - Catching Up to FI - Apple Podcasts
Jackie podcast #3 (HSA focused): All About The Health Savings A - Journey To Launch - Apple Podcasts
Sample Investopedia Article: 401(k) vs. IRA: What’s the Difference?
Amusing Unedited AI-Bot Summary:
Unearth the secrets to a financially independent future as we explore groundbreaking strategies and expert insights in this episode. Learn why Bill Bengen's latest research challenges conventional wisdom on withdrawal rates and how a diversified portfolio, including alternative assets like gold, can empower your financial journey. With engaging discussions from finance heavyweights like Corey Hofstein, we promise you a treasure trove of actionable advice to enhance your portfolio management and tax strategies.
This episode is a masterclass for the do-it-yourself investor, guiding you through the maze of retirement account options and tax implications for every stage of life. For young professionals, discover how to maximize your 401k and Roth contributions, while mid-career individuals will learn to optimize savings amidst family and mortgage commitments. If you're nearing retirement and feeling off-track, we offer insights to realign your financial plans and keep your retirement goals within reach.
Join us as we tackle the complexities of retirement account withdrawals and the strategic use of Health Savings Accounts as investment vehicles. With practical advice and a touch of humor, we'll navigate the week's market performances and celebrate the gains in sectors like the S&P 500, NASDAQ, and gold. From the power of compounding to the significance of early financial planning, this episode is your guide to mastering the art of financial independence.
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In this episode we answer emails from Melissa, Neil, Mark and Mike. We discuss a missing link from Episode 7 and a substitute for it, the podcast distribution, moving from an accumulation portfolio in a taxable account to a retirement portfolio efficiently, and considerations when incorporating international (non-U.S.) funds.
Links:
Three Ingredients Article: Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts
Merriman ETF Recommendations: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation
Amusing Unedited AI-Bot Summary:
Unlock the secrets of do-it-yourself investing with Risk Parity Radio, where listener queries drive our exploration of effective financial strategies. Ever wondered how to craft a risk parity portfolio as you approach retirement? We tackle this and more, including navigating the world of taxable accounts, minimizing taxes, and managing significant expenses like a house down payment. Melissa's email about a broken Ray Dalio link becomes an opportunity to explore alternative resources, while Mark's playback issues on Apple Podcasts spark our gratitude for community feedback. You'll also discover the nuances of transitioning to a risk parity portfolio without opening new accounts, and the surprising overlaps between VTI and VUG.
Ready to rethink international diversification? While some portfolios skip international funds, they still provide global exposure through assets like global value-tilted funds and Chinese A shares. We discuss why this approach might suffice, as international funds often mirror US stocks, especially in large caps. Instead, our focus shifts to balancing value, growth, and size using small-cap value funds from Avantis or DFA. With flexible templates and key diversification metrics, you'll learn to construct a robust portfolio without getting lost in geographic diversifications. Tune in, and reshape your investing toolkit with practical insights and empowering strategies.
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In this episode we answer emails from Jenny, Arun and Jeff. We discuss setting up a risk parity style portfolio for an elder relative, what to do with 529 money and college funds when you are getting close, and the use of risk parity style portfolios for intermediate goals or accumulation.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Yours Truly On The Earn & Invest Podcast: Why Risk Matters w/ Frank Vasq - Earn & Invest - Apple Podcasts
Value Stock Geek's Weird Portfolio: Weird Portfolio – Portfolio Charts
Jared Dillian And The Awesome Portfolio: Show Us Your Portfolio: Jared Dillian
Father McKenna Center Donation Page: Donate - Father McKenna Center
Amusing Unedited AI-Bot Summary:
What if you could unlock the secrets of risk parity and transform your investment strategy? Join us on Risk Parity Radio as we explore how strategic gold allocation and portfolio diversification can revolutionize your financial journey. Dive into the humor-laden world of market fluctuations and portfolio reviews, and learn from our recent discussion on the Earn and Invest podcast with Jordan Grumet about integrating risk parity into modern portfolio theory. We also respond to a thoughtful email from Jenny, a dedicated Patreon supporter, who's crafting a risk parity portfolio for her mother-in-law. Get insights on asset allocation, the timing of gold investments, and how to utilize current market conditions to make savvy decisions.
In this episode, we delve into diversifying investment strategies during the accumulation phase, particularly for DIY investors like Jeff, a mid-40s Gen Xer contemplating a 401k rollover. Explore a variety of strategies, including Tyler's Golden Butterfly, the Weird Portfolio by Value Stock Geek, and Jared Dillian's Awesome Portfolio. Discover how these can complement ventures in real estate or business, and draw inspiration from Bruce Lee's philosophy to tailor an approach uniquely your own. Whether you're a novice or a seasoned investor, expect to walk away with practical advice and fresh perspectives to enhance your financial strategy.
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In this episode we answer emails from James, MyContactInfo and Cy. We discuss using silver in addition to gold in a portfolio, review again why many "options strategy funds" and other complex ETFs are generally a waste of space in a portfolio and talk about a recent Andrew Tobias interview and the history of DIY investing.
Links:
Eric Balchunas Interview: Eric Balchunas on The Hidden Gems of the ETF World You Need to Know! (youtube.com)
Andrew Tobias Interview: The Only Investment Guide You'll Ever Need with Andrew Tobias | White Coat Investor
Amusing AI-Bot Summary:
Discover why silver might be the wild card you didn't expect in your investment portfolio. With its industrial uses and lack of central bank holdings, silver might ramp up your portfolio's volatility without offering much in terms of diversification. We explore the intriguing story of the Hunt brothers and their infamous attempt to corner the silver market in the late 1970s, shedding light on the lessons learned from this historical market manipulation. Managed futures, we argue, could be a more strategic play for those looking to ride silver's unpredictable trends.
As we journey through the evolution of DIY investing, we take a critical look at the rise and fall of heavily marketed investment funds, like buy-write and options strategy funds. Through the wisdom of Andrew Tobias, we trace the shift from active fund management in the 1980s to today's preference for indexing and strategic asset allocation. From the so-called "Bronze Age" to our current "Golden Age" of investing, the importance of asset allocation remains a steadfast guide. So whether you're a seasoned investor or just starting out, these reflections aim to illuminate a path toward more informed and successful investment decisions.
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In this episode we answer emails from Alyson, Martijn and Russel. We discuss the drawbacks to using a total world fund, common misconceptions about it and misguided worship of the Simplicity Principle, a levered sample portfolio comparison and basic ideas for accumulation.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional link:
Levered Sample Portfolio Comparison: testfol.io/?s=8JtI7Xd2q7l
Amusing Unedited AI-Bot Summary:
Can achieving higher safe withdrawal rates in retirement really be as simple as investing in a single ETF? Discover the complexities of using VT, a total world fund, during your accumulation phase and why it might not be the one-size-fits-all solution it's cracked up to be. We'll challenge conventional wisdom on cap-weighted funds and explain why diversifying across different asset classes is crucial for your portfolio's long-term success. Get ready to expand your horizons as we question the effectiveness of simplicity and share strategies for effective rebalancing.
Join us for a lively exploration of portfolio diversification with listener Q&A, where we break down the dynamics of levered portfolios and strategize about blending small-cap value with large-cap growth. Whether you're just starting your investment journey or refining your approach, we'll guide you through the pros and cons of various strategies, helping you navigate the path to financial freedom. Plus, we review an exciting week in the markets, highlighting stellar performances and acknowledging the unpredictable nature of trends. Dive into the details with us and equip yourself with the knowledge to make informed investment decisions.
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In this episode we answer emails from Anderson, Camille, and Chris. We discuss and HSA vs. a Roth IRA for a lower-taxed earner, the tax, brokerage account, and portfolio considerations for a globe-trotting Canadian, and the gestalt of this podcast.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Charts Portfolio Matrix: Portfolio Matrix – Portfolio Charts
Amusing Unedited AI-Bot Summary:
Imagine navigating the world of international investment with the finesse of a seasoned traveler—all while balancing the priorities of a large family. Join me on Risk Parity Radio, where we explore Anderson's financial journey. With six kids and a modest income, Anderson seeks guidance on whether to prioritize his HSA or Roth IRA. We dissect the advantages and pitfalls of each option, examining long-term growth and inheritance implications, and offering a balanced approach to alleviate his concerns. Spoiler: a Roth IRA might just be his golden ticket.
As you contemplate international retirement, consider the intricate dance of managing a portfolio across borders. We discuss the indispensable role of a savvy accountant to navigate tax complexities and the potential necessity of relocating assets to sidestep onerous US regulations. Discover how Interactive Brokers can be your go-to platform for seamless international transactions and learn from real-world investment scenarios, like the unpredictable journey with MGK and real estate ventures. Our strategic planning insights will steer you clear of unreliable assets, paving a path to financial independence.
Trading stock charts for crystal balls, we venture into forecasting with a twist—relying on historical data instead of mere speculation. By leveraging portfolio matrices, we guide you through the labyrinth of investment possibilities beyond traditional stocks and bonds. Balance simplicity with complexity as you craft a robust portfolio that withstands market volatility. And as always, we cap off with a dose of humor—a nod to Monty Python’s "silly place"—reminding you that while we’re serious about finance, we’re equally serious about having a good laugh.
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In this episode we answer emails from Frank and Dan. We discuss investment considerations in the 32% marginal bracket, reallocating a cash holding to bonds and alternatives and common withdrawal mechanisms for taking monthly distributions.
Link:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Amusing Unedited AI-Bot Summary:
Ever pondered how to perfectly balance your portfolio in a high tax bracket? We promise you'll gain actionable insights from Frank, a generous donor and semi-retired investor navigating his complex asset allocation strategy. At 60 years old, Frank seeks our advice on his bond investments, with options like EDV, VGLT, and VGIT on the table. His financial journey becomes a fascinating case study as we unravel the best strategies for optimizing his diverse portfolio of stocks, gold, municipal bonds, and cash. Plus, we emphasize the importance of giving back, spotlighting our cherished cause, the Father McKenna Center.
The episode takes a deeper dive into tax strategies tailored for substantial assets, providing listeners with the tools to maximize their retirement portfolios. Learn how retirement accounts like IRAs and solo 401(k)s can be leveraged to defer taxes, especially for those enjoying a higher tax bracket. We discuss the benefits of municipal bonds for tax efficiency and highlight the necessity of professional financial advice. Our focus remains on maintaining a balanced mix of investments to ensure growth and stability as you transition into retirement.
Finally, we explore effective strategies for managing portfolio drawdowns and monthly distributions. We introduce Harold Avinsky's bucket strategy and its psychological benefits, drawing inspiration from financial expert Paul Merriman. As we wrap up, we encourage you to reflect on aligning with your personal values and the universe's natural flow, all while enjoying light-hearted exchanges that underscore these financial principles. Join us for an enlightening conversation designed to empower your financial planning journey.
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In this episode we answer emails from Gordon, Roger and John. We discuss the ChooseFI podcast and podcast appearances, modern trends in fund construction and considerations with leveraged funds while transitioning to a drawdown portfolio, along with some basic guidelines.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Roger's Bloomberg Article: Goldman’s Kostin Urges Putting Brake on Stock-Index Reshufflings - Bloomberg
Return Stacked Webinar: Diversification 2.0: Mastering the Art of Portable Alpha (youtube.com)
Amusing Unedited AI-Bot Summary:
Ever wondered how to construct a portfolio that balances risk and return while maximizing your investment potential? On this episode of Risk Parity Radio, we promise to demystify the art of alternative asset allocation for all you do-it-yourself investors out there. Join me, Frank Vasquez, as we transform a complex topic into an engaging conversation reminiscent of a meet-up at your favorite dive bar. We'll share our latest portfolio updates, address intriguing listener questions, and explore the emerging industry of podcast guesting, with a special nod to Gordon for his feedback on my recent appearance on the ChooseFI podcast.
How do index funds really work, and could their construction hold the key to better diversification? Listen in as we tackle these questions, dissecting the process of index fund innovation and highlighting the shift from traditional cap-weighted indexes to the realm of sectors, factors, and thematic indexes. We explore the exciting potential of algorithm-driven fund construction and replication strategies, inspired by examples like the DBMF Managed Futures Fund. This episode uncovers the abundant opportunities that ETF experimentation brings to savvy investors looking to broaden their horizons with advanced strategies.
Looking to craft a retirement drawdown portfolio that stands the test of time? We guide you through the nuances of constructing a portfolio that supports sustainable spending rates while leveraging funds for enhanced returns. Using John's real-life portfolio as a case study, we analyze components like NTSX, AVUV, GLDM, and DBMF, focusing on risk parity and return stacking principles. We also review recent market performance and introduce you to our newest portfolio, Optra. Before signing off, connect with us through our provided contact info, and remember, our content is here to inform and entertain, not serve as professional financial advice.
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In this episode we answer emails from David, Jennifer and Byron. We discuss Risk Parity books and finance books and sources in general, considerations in taking control of a complicated portfolio from a (former) AUM advisor, and portfolio considerations for the younger investor considering tech, leverage and other various and sundry things.
Links:
Book #1: Risk Parity: How to Invest for All Market Environments by Alex Shahidi | Goodreads
Book #2: Risk Parity Fundamentals by Edward E Qian | Goodreads
Book #3: Introduction to Risk Parity and Budgeting by Thierry Roncalli | Goodreads
Risk Parity Radio RSS Feed Page: Risk Parity Radio RSS Feed (buzzsprout.com)
Ben Felix Video On Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)
Amusing Unedited AI-Bot Summary:
Prepare to unlock the secrets of risk parity investing and transform your retirement portfolio. Ever wondered which books can truly elevate your understanding of risk parity? We offer a curated list of essential reads, including Alex Shahidi's "Risk Parity: How to Invest for All Market Environments," to guide you in this complex yet rewarding approach. These books cater to the savvy investor ready to harness academic and professional insights, focusing on diversification and modern portfolio theory as powerful tools for financial success.
Navigating the maze of investments alone can be daunting, especially post-advisor. Jennifer's story highlights the challenges and opportunities of consolidating a vast portfolio without triggering hefty tax bills. We provide actionable strategies to streamline investments, emphasizing the critical role of cost basis data and aligning your current holdings with future goals. Tax efficiency takes center stage, with insights into evaluating investment overlaps, leveraging different account types, and smartly planning around income changes to maintain a cohesive and tax-savvy portfolio.
Are you ready to supercharge your investments for growth? Self-employed young investor Byron's journey reveals the excitement and risks of tech and leveraged ETFs in an aggressive growth strategy. Balancing high-risk potential with a thoughtful approach is key, and we emphasize the importance of a low-cost index-based portfolio strategy. With humor and practicality, we explore how to achieve impressive returns while managing risks, encouraging a balanced investment approach that doesn't gamble your financial future. Clear financial goals and consistent strategies are your allies in navigating the unpredictable markets.
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In this episode we answer emails from Lucas, Hannelore and Joe. We discuss databases, where to put your gold ETFs and how it is taxed, and a modelling recommendation for testfol.io and modelling OPTRA.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Ken French Database Page: Kenneth R. French - Data Library (dartmouth.edu)
Portfolio Charts Portfolio Matrix: Portfolio Matrix – Portfolio Charts
Investopedia Article About Taxation of Gold and Collectibles: How Collectibles Are Taxed (investopedia.com) (See also notes to Episode 303).
Joe's UPRO Model: testfol.io/?d=eJytkF9LwzAUxb9KuQ8%2BVakrCBaGDP%2BgIFg2BccY5drcdtE0mWnaKqPf3dtWZhH2tjwl5NxzfufuIFfmDVWMFosSoh2UDq1LBDqCCMAH0mL0Gn5rVBCdB3x8QPGeSJ0pdNJoiDJUJfmQYrnJlGkgCv4eSWbpk32WhFZ9s5s1SkmdJ43UotNeBK0PW2NdZpQ0jLPagcaiy148FBVnkPBe4vkTz0pdU%2BluZC0FI7LW2YqDLXEb1Cnd%2FctyMv0gO3gO9841Xj7Prx6n4cntNDi7nLBuSzYl7fp%2B7doHYTHnFq2%2FRwm%2FvH7Oa6TbeJpyrl6T17U8KtcYJgx6gr3gera4fx0LTieHcGepq1AddW2%2FXodWtW5%2FALcmxls%3D
Amusing Unedited AI-bot Summary:
Unlock the secrets to smarter investing with us at Risk Parity Radio! What if understanding the complexities of asset allocation could transform your investment strategy? That's exactly what we explore as we tackle Lucas's burning question about robust databases for backtesting historical financial data. With a sharp focus on resources like the Fama French database, Bogleheads, and Portfolio Visualizer, we emphasize the power of broad asset class data over individual tickers. Plus, we highlight how using multiple tools, including the nifty Portfolio Matrix at Portfolio Charts, can lead to consistent, reliable investment results.
As we navigate the world of investing, we sprinkle in humor with a ferry trip anecdote that doubles as a clever metaphor for strategic thinking in finance. With insights on choosing between traditional IRAs, Roth IRAs, and brokerage accounts, we spotlight listener Joe's stellar contribution on leveraging funds and performance modeling using the Testfolio tool. Our lively discussion doesn't end there; tune in for our weekly portfolio performance reviews, featuring everything from small-cap value stocks to gold and treasury bonds. We won't leave you guessing about sample portfolios like the All Seasons and Golden Butterfly, as we break down their substantial returns and year-to-date gains. Packed with practical advice and engaging stories, this episode is a must-listen for any investor looking to refine their financial approach.
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In this episode we answer emails from Anderson, Sean and Colin. We discuss the OPTRA sample portfolio, using rising glidepaths or bond tents in portfolio management and Colin's "Smooth Operator" Portfolio.
Links:
2016 Kitces Article re Bond Tents and Glidepaths: The Portfolio Size Effect And Optimal Equity Glidepaths (kitces.com)
Portfolio Charts Portfolio Matrix Comparison Tool: Portfolio Matrix – Portfolio Charts
Colin's Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Portfolio Charts Article: When Past Performance Is Absolutely Indicative of Future Results – Portfolio Charts
Amusing Unedited AI-bot Summary:
Discover the secrets to crafting a retirement portfolio that balances risk and reward in episode 371 of Risk Parity Radio. We introduce the Optra portfolio, a unique blend of risk parity with a hint of leverage, and explore why a descriptive name was chosen over the suggested Uncle Frank portfolio. This episode gives you a backstage pass to our discussion on managing equity exposure and sequence of return risks with innovative strategies like bond tents and equity glide paths paired with risk parity styles, as proposed by our listener Sean.
Unlock the power of portfolio construction tools and techniques with us. We demystify the use of Portfolio Visualizer's Monte Carlo Simulator and delve into expert insights from Bill Bengen and Wade Pfau on optimal equity allocations. You'll grasp the significance of historical data as we dissect how different portfolio compositions can affect decumulation strategies, touching on metrics like CAGR and the ulcer index. Our conversation extends to Colin's Smooth Operator Portfolio, which cleverly uses ETFs to enhance diversification and reduce volatility, showing the value of innovative approaches to portfolio performance.
As we wrap up, expect a playful twist with Frank Vasquez's rendition of "Smooth Operator" and a reminder that our advice is designed to inform and entertain, not replace personalized financial consultation. We stress the importance of consulting personal advisors for tailored decisions. Join us for an engaging and enlightening session that combines financial wisdom with a touch of humor, ensuring you're well-prepared for your financial journey.
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In this episode we answer emails from Jimmy, Dave and Richard. We discuss the joys of Joe's Garage, the Bogleheads Simba spreadsheet and Lazy Portfolios and a revisit of the ETF SVOL.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Simba's Spreadsheet (Article And Link): Simba's backtesting spreadsheet - Bogleheads
SVOL Webpage: SVOL Simplify Volatility Premium ETF | Simplify
Richard's SVOL vs. Equity ETFs Analysis: testfol.io/analysis?d=eJxdikEKwjAQRa8S%2FjoL68JFruEBwtCkMu04kUmaIuLdDbgR3%2B7x3guN5y1bRYC79iKuPp5ur%2FfuqO8dHrWRtZio5bEMz5p%2B7Fs7CcJ0GnhQWiPrItS4KMJCUrOHFRHWWzxYUzkQLuOci1n8D9P5%2FQF55jJ4
Richard's SVOL Portfolio Analysis: https://tinyurl.com/bddjy2k4
Eric Balchunas Interview: Eric Balchunas on The Hidden Gems of the ETF World You Need to Know! (youtube.com)
Amusing Unedited AI-bot Summary:
Imagine a finance podcast that's as entertaining as a night out at your favorite dive bar. I'm Frank Vasquez, and on this playful yet insightful episode of Risk Parity Radio, we hit a milestone of 750,000 downloads, a delightful gift for my 60th birthday. Join me as I reminisce about the impact of Frank Zappa's "Joe's Garage" on my youth and answer listener emails, including a deep dive into Simba's Backtesting Spreadsheet. We ponder the Bogleheads' seemingly timeless investment models and their reluctance to embrace change.
Turning our focus to innovative ETF strategies, we dissect the SVOL ETF, an inverse VIX fund with the potential to spice up your portfolio. Despite its lack of historical data and the risk of significant distributions in taxable accounts, this ETF might just find its rightful place in your retirement portfolio. We examine the broader trend of creative ETFs, thanks to recent SEC rule changes, and weigh the psychological appeal against the need for financial prudence. Curiosity piqued, we also explore SVOL's correlation with growth or value stocks.
Rounding out the episode, we analyze weekly portfolio performances with strategies like the All Seasons, Golden Butterfly, and Risk Parity Ultimate. I update you on specific portfolio allocations and performances, highlighting the beauty of consistent returns, even if they might seem uneventful. Engage with us through questions or comments, subscribe, and leave a review. As we wrap up, enjoy a humorous tale that weaves together music, relationships, and personal growth, leaving you informed and entertained. Remember, this episode offers insights for entertainment and informational purposes, so consult your personal advisor for tailored financial advice.
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In this episode we answer emails from Frank, John, Aaron and Pete. We discuss bond allocations in treasuries of various durations, when retirement account space is limited and the tax bracket is high, the reasons for the strange presentation of this podcast and how to use a new AI-Bot to circumvent them (with an embedded example of an AI-Bot podcast created from Episode 333 about target date funds), the joys of having younger listeners and Derek Tharp's Monte Carlo based variable withdrawal strategies.
Links:
The New Google Notebook AI-Bot That Creates Podcasts: NotebookLM | Note Taking & Research Assistant Powered by AI
Derek Tharp Podcast: Busting the 4% Rule Myth - Retirement Revealed | Podcast on Spotify
Derek Tharp Article: A Monte Carlo 50% Retirement Success Probability Can Work (kitces.com)
Amusingly Inaccurate Unedited AI-Bot Summary:
Unlock the secrets of smarter investing and redefine how you approach your portfolio with our latest episode of Risk Parity Radio. Ever wondered if your 401k rollover could be optimized for greater returns? We dive into a listener's question about achieving a 30% bond allocation, weighing the pros and cons of treasury versus municipal bonds. You'll discover insights into balancing tax implications and investment goals, while also considering the volatility of different bond types. Our conversation guides you toward a holistic view of your investment strategy, ensuring your portfolio aligns with your personal financial objectives.
Challenging the status quo, we welcome guest Frank Vasco to dissect the perceived simplicity of target date funds. Could these popular investment vehicles be holding your growth potential back? Frank shares compelling findings from a 2022 study, revealing how TDFs might underperform significantly over decades. Even industry stalwarts like Vanguard aren't immune to these criticisms. With this in mind, we encourage you to critically evaluate your 401k plan choices, embracing a mindset of informed skepticism and strategic thinking.
Finally, we examine the fascinating world of index funds and question traditional retirement withdrawal strategies. Drawing an analogy to betting on the entire Kentucky Derby, we explore how index funds offer diversification and often outperform active management. As you rethink retirement, we discuss utilizing Monte Carlo simulations to create flexible withdrawal strategies that adapt to changing circumstances. This episode is all about empowering you with financial literacy and the tools to challenge conventional wisdom, putting you in control of your future wealth.
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In this episode we answer emails from Andrew, Jeff, Ron and Javier. We discuss analysis tools for leveraged funds like UPRO and TNA, Tactical Allocation Strategies, how and where this podcast is distributed, and brokerage account options for foreign (to the US) nationals.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Andrew's Portfolio Visualizer Link: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Testfol Portfolio Analyzer (see the Help link in the drop-down menu for instructions): testfol.io
Allocate Smartly Website: What We Do - Allocate Smartly
Interactive Brokers Introduction For Accounts: Introducción a IBKR | Trading Course | Traders' Academy | IBKR Campus (interactivebrokers.com)
Amusing Unedited AI-Bot Summary:
Ready to rethink your investment strategy? Uncover the secrets of a diversified portfolio with leveraged funds like TNA and UPRO in our latest episode of Risk Parity Radio. We'll guide you through the nitty-gritty of managing such portfolios, emphasizing the significance of fee considerations and the mechanics of monthly rebalancing. Explore alternative strategies, including rebalancing bands, and discover the power of tools like Portfolio Visualizer and TestFol to optimize your investment approach. We blend humor and savvy insights to create an inviting atmosphere, reminiscent of a friendly chat at your favorite local dive bar.
Our exploration doesn't stop there. We tackle Jeff's curiosity about tactical allocation strategies for retirement, diving into the complexities and risks, including overfitting and tax inefficiencies. While some approaches might tempt with short-term outperformance, we advocate for simpler, more reliable diversification techniques. Tune in for our market performance review, where we assess the minimal shifts in major indices and the dramatic moves in commodities and long-term treasury bonds. From the All Seasons to the Risk Parity Ultimate portfolios, we ensure you have the insights needed to navigate your financial journey through market volatility and distribution strategies.
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In this episode we answer emails from Mark, Jon and Richard. We discuss the perils of income investing, covered call funds and SPYI, one potential future of DYI investing using levered and unlevered risk-parity style portfolios, and the use and misuse of historical data in various analyses with a reference to a blog post from Cliff Asness.
Links:
Video re SPYI: SPYI Squeezes 12% Yield from the S&P 500 (SPYI ETF) (youtube.com)
Portfolio Visualizer Litmus Test of SPYI: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Cliff Asness Article: Efficient Frontier “Theory” for the Long Run (aqr.com)
Father McKenna Center Donation Page: Donate - Father McKenna Center
Note that the usually "Amusing Unedited AI-bot Summary" was so ridiculously inaccurate I had to omit it.
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In this episode we answer emails from Mark, James and Anderson. We discuss differing performances in managed futures funds, a Portfolio Visualizer calculator and what to do with a TSP, and what to do about 529s when approaching the use date.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Recent ChooseFI podcast with Yours Truly: 5% SWR, Revealed Preferences and the 3 stories | Frank Vasquez | Ep 508 | ChooseFI
Father McKenna Center Main Donation Page: Donate - Father McKenna Center
Portfolio Visualizer Financial Goals Tool: Financial Goals (portfoliovisualizer.com)
Amusing Unedited AI-bot Summary:
How do you ensure a worry-free retirement while navigating the complexities of market trends and withdrawal strategies? Welcome back to Risk Parity Radio! Fresh from a cross-country adventure to the picturesque Washington State, we’re back with a renewed zest to help you master the art of personal finance and investing. Our cozy, dive bar-esque podcast is not just about numbers and charts; it's about community, humor, and shared learning. In this episode, we revisit our eight sample portfolios and shed light on how to build relationships and joy within your retirement hobby. If you're new here, start your journey with episodes 1, 3, 5, 7, and 9 for a solid foundation.
Ever wondered how to choose between managed futures ETFs like KMLM and DBMF, or how to predict safe withdrawal rates for early retirement? We’ve got you covered. We explore the intricacies of KMLM's track record and DBMF's market adaptability, helping you determine the best fit for your diversified portfolio. Plus, we answer a listener's burning question about withdrawal rates, and untangle the complexities of the Thrift Savings Plan versus an IRA rollover. Dive into the world of financial planning tools, Social Security strategies, and brokerage firms like Fidelity and Schwab for low-cost investments. Join our informative yet quirky session designed for do-it-yourself investors looking to build a robust, diversified retirement plan.
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In this episode we answer emails from Mikel, Garrison and Matt. We discuss our charity and some foundational episodes, the use of leveraged fund UPRO in the OPTRA sample portfolio, and the four phases of learning and knowledge in personal finance, which are (1) Baby Steps; (2) Shiny Object Syndrome; (3) Applying Formulas That Represent Sound Investing Principles; and (4) Understanding Sound Investing Principles And Applying Them Directly. And Mt. Rushmore and The Dog With The Longest Name.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Risk Parity Radio RSS Feed With All Podcasts On One Searchable Webpage: Risk Parity Radio RSS Feed (buzzsprout.com)
Father McKenna Center Main Donation Page: Donate - Father McKenna Center
Father McKenna Center Walk4McKenna Page: Walk4McKenna - Father McKenna Center
Amusing Unedited AI-Bot Summary:
How can long-term treasury bonds cushion your portfolio against turbulent market conditions? This week on Risk Parity Radio, we provide a detailed review of our sample portfolios, showing how treasuries have played a crucial role in mitigating recent stock market losses. We also share an inspiring email from Michael, a new listener who discusses his generous donation to the Father McKenna Center and highlights the upcoming Walk for McKenna fundraiser. Tune in to learn how you can support this meaningful cause while enhancing your understanding of risk parity investing.
Embark on a journey to financial independence with us as we dissect the critical stages and pitfalls along the way. We'll guide you through the initial "baby steps," cautioning against the allure of "shiny object syndrome," and emphasize the importance of transitioning to practical, DIY investment strategies. Discover the core principles of successful investing, such as diversification and macro allocation, that will empower you to achieve true financial independence and navigate your personal finance journey with confidence.
In a week marked by significant market declines, we analyze the performance of various portfolio strategies, highlighting the resilience of long-term treasury bonds and the impressive gains in diversified portfolios like the All Seasons and Golden Butterfly. Get an inside look at the new Optra portfolio, its composition, and its performance amidst economic fluctuations. We wrap up with an engaging tale about an extraordinarily talented dog, blending financial wisdom with light-hearted storytelling to keep you both informed and entertained.
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In this episode we answer emails from Brian, JD and Andrew. We discuss using leverage in portfolios (again!), gold ETFs and early retirement considerations and withdrawal strategies.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Yours Truly on the Forget About Money Podcast: 🎲 Risk Parity: The Secret to a 5% Safe Withdrawal Rate! | Frank Vasquez 🏆 (youtube.com)
Ben Felix Video On Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)
Optimized Portfolios Website: Optimized Portfolio - Investing and Personal Finance
ETF Database -- Gold ETFs: Gold ETF List (etfdb.com)
PHYS Fund Article: Tax Information - Physical Gold Trust (sprott.com)
Portfolio Charts Withdrawal Rates Calculator: Withdrawal Rates – Portfolio Charts
Portfolio Charts Retirement Spending Calculator: Retirement Spending – Portfolio Charts
Morningstar Report re Variable Withdrawal Strategies: Six Retirement Withdrawal Strategies that Stretch Savings | Morningstar
Amusing Unedited AI-bot Summary:
Ready to rethink your investment strategy? Uncover the secrets of leveraging your portfolio from insights gleaned from industry titans like Ray Dalio and practical advice for everyday investors. We promise you'll walk away with a new perspective on the benefits and risks of using leverage, tips on incorporating leveraged ETFs into your own portfolio, and a treasure trove of resources including the Optimize Portfolios site and an enlightening video by Ben Felix. This episode is packed with knowledge that can transform how you approach your investments.
But that's not all—we're spicing up this financial discussion with a revisit to one of the most memorable moments in film history. Relive the iconic scene between James Bond and Goldfinger, dissecting the thrilling exchange and the unforgettable line, "No, Mr. Bond, I expect you to die." We'll break down Bond’s daring attitude against Goldfinger’s ruthless intent, highlighting why this scene is etched in cinematic lore. A blend of financial wisdom and pop culture nostalgia, this episode promises to both inform and entertain. Tune in and join the conversation!
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In this episode we answer emails from Phil, MyContactInfo, and Eric. We discuss implementing factor investing and making portfolio adjustments in a risk-parity style portfolio, HECOMs and other considerations about reverse mortgages and buffered products, the fundamental problems with IUL that need to be accounted for before using it, and just how rich you probably need to be to be using insurance products as investments. Hint: You are not that rich.
Links:
Swedroe Factor Investing Book: Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today by Andrew L. Berkin | Goodreads
Long View Podcast About HECOMs: Don Graves and Wade Pfau: How - The Long View - Apple Podcasts
Andy Panko Cautionary Video About IUL: Beware of misleading Indexed Universal Life insurance ("IUL") illustrations (youtube.com)
Andy Panko IUL Critique On Big Picture Retirement Podcast: Unmasking the IUL Sales Pitch with Andy Panko (bigpictureretirement.com)
Private Placement Life Insurance: How Does Private Placement Life Insurance Work? - ValuePenguin
Amusing Unedited AI-Bot Summary:
Is your portfolio prepared for the next economic downturn? Join us on this episode of Risk Parity Radio as we tackle an intriguing email from Phil, a listener from Portugal contemplating a major portfolio overhaul. We dig deep into the nuances of factor investing, particularly momentum and profitability factors, and offer critical advice on the potential risks of reducing bond allocations in favor of equities. We emphasize the importance of leveraging financial analysis tools like Portfolio Charts and Portfolio Visualizer to make informed decisions, and stress the need for a balanced approach throughout both the accumulation and decumulation phases of investing.
We also navigate the labyrinth of investment strategies and financial products, evaluating the pros and cons of dollar-cost averaging amidst market volatility, and scrutinize costly options like Home Equity Conversion Mortgages (HECMs) and Indexed Universal Life (IUL) insurance products. Highlighting the potential pitfalls of these profit-driven offerings, we advocate for well-diversified portfolios as the cornerstone of robust financial planning. Tune in to discover practical tips on managing taxable accounts, avoiding misleading insurance products, and achieving optimal portfolio performance, all while staying grounded in sound financial principles.
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In this episode we answer emails from Robert, Jamie and Richard. We discuss transitioning away from a Boglehead Three Fund portfolio due to its obsolete nature, a query about the DBMF prospectus and an early retirement with a 70/30/10 risk-parity style portfolio in the face of some spurious Sonia-like objections.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Merriman Best-In-Class ETF List: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)
Morningstar Portfolio Analysis Of VTI: VTI – Portfolio – Vanguard Total Stock Market ETF | Morningstar
VXUS: VXUS – Portfolio – Vanguard Total International Stock ETF | Morningstar
AVDV: AVDV – Portfolio – Avantis International Small Cap Val ETF | Morningstar
AVES: AVES – Portfolio – Avantis Emerging Markets Value ETF | Morningstar
Early Retirement Now Spreadsheet Toolbox: An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement Now
Amusing Unedited AI-bot Summary:
What if your international and bond funds aren't providing the diversification you think they are? On this episode of Risk Parity Radio, we address Robert's inquiry about optimizing his family's portfolio during the accumulation phase. We'll dissect the limitations of total international funds when paired with a U.S. S&P 500 or total market fund, and why they may fail to deliver the diversification you seek. We'll also explore Robert's proactive strategy of reallocating bond investments into stock funds during market downturns and discuss the merits of increasing U.S. stock exposure while rethinking the necessity of international holdings.
We'll further challenge the conventional wisdom of international versus domestic funds and introduce modern alternatives that can bring true diversification to your portfolio. Recommendations from the Merriman Foundation, such as AVDV and AVES, are highlighted for their potential to balance your investments by tilting towards small-cap and value stocks in international markets. Lastly, we dive deep into the complexities of fund disclosures and benchmarks, offering alternative methods to evaluate funds more effectively. Gain insights that will guide you toward a more strategic and diversified investment approach for long-term growth.
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In this episode we answer emails from Chris, Andrew and Jenzo. We discuss portfolio, forms of leverage in leveraged portfolios, transitioning to a Golden Butterfly portfolio, and working with your spouse productively on your finances.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center: Home - Father McKenna Center
Article re Margin vs. Leveraged ETFs: Margin Trading vs. Leveraged ETFs | Cumberland Advisors
Optimized Portfolios: Optimized Portfolio - Investing and Personal Finance
Leveraged ETFs Article: Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs (ddnum.com)
Warren Buffett's Alpha Article: Full article: Buffett’s Alpha (tandfonline.com)
Gottman -- "Eight Dates" Book: Eight Dates: Essential Conversations for a Lifetime of Love (gottman.com)
Amusing Unedited AI-bot Summary:
Ever wondered if using margin or leveraged ETFs is the smarter choice for your investment strategy? This week on Risk Parity Radio, we promise to shed light on this ongoing debate. As we kick off the episode, we liken our podcast to a dive bar of personal finance where humor enthusiasts and seasoned investors alike can find common ground. With a lively introduction, we announce the grand unveiling of our weekly portfolio reviews for eight sample portfolios available on our website. An email from Chris sets the stage for a deep dive into the nuances of leveraging investments using margin or box spreads, responsible leverage, and current rates, all while thanking our generous listeners for their support of the Father McKenna Center.
Are high margin rates making you reconsider your investment strategy? We dissect this dilemma by exploring the current landscape and why leveraged ETFs might just be your best bet. With a focus on ETFs like NTSX and UPRO, we suggest additional resources such as Optimized Portfolios to help you navigate your options. Inspired by listener feedback, we also touch on the concept of optimal leverage, referencing studies like "Warren Buffett's Alpha," and discuss the importance of consistent investing strategies over market timing when building a risk-parity portfolio over the next five years.
Ready for some good news? This has been an exciting week in the market, with gains across the board. From the S&P 500 to managed futures, everything is up, and our eight sample portfolios are reaping the benefits. We highlight the standout performances of newer and experimental portfolios like the Levered Golden Ratio and the Optra Portfolio. To wrap things up, Frank Vasquez delivers a spirited and humorous sign-off, reminding us to consult with personal advisors before making any financial decisions. Tune in for a rollercoaster of insights and laughs that you won't want to miss!
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In this episode we answer emails from Ned, Kyle and Willy. We discuss tools for the sight-impaired, building out from an accumulation portfolio, the new bitcoin ETFs, and what to do in a complex Coast FI situation involving both an invested portfolio and some raw land.
Link:
Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations: Donate - Father McKenna Center
Amusing Unedited AI-bot Summary:
Can a legally blind investor successfully navigate the complex world of DIY investing? Tune in as we uncover the inspiring story of Ned, who shares his personal journey and the accessibility tools that empower him to make informed investment decisions. Learn how he balances his focus on large and mid-cap growth stocks while exploring the potential benefits of adding small-cap value, long-term treasuries, and alternative assets like gold and managed futures to his portfolio.
In another fascinating segment, we break down the power of ETFs for investing in digital assets such as Bitcoin and Ether, and how platforms like Fidelity and Schwab make it seamless. We then tackle a challenging financial scenario with Willy, who is on the brink of transitioning to Coast FI. Delve into strategies for evaluating his portfolio mix, the implications of selling rural recreational land, and the potential benefits of reallocating to more liquid investments. Discover practical tips and thoughtful analysis to help you make smarter investment choices and achieve financial independence.
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In this episode we answer emails from Frank, Michael and Aaron. We discuss four good portfolio analyzer tools, the hidden meanings in the Risk Parity Radio logo, the deficiencies of the website and where to find good international funds to use for portfolio construction.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations: Donate - Father McKenna Center
Portfolio Visualizer Monte Carlo Simulator: Monte Carlo Simulation (portfoliovisualizer.com)
Portfolio Charts Portfolio Matrix Tool: Portfolio Matrix – Portfolio Charts
Early Retirement Now Toolbox: An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement Now
Testfolio Calculator: testfol.io
Geometric Golden Ratio Pentagon: Golden Ratio in Regular Pentagon (cut-the-knot.org)
Misbehavior of Markets Book: The (Mis)Behavior of Markets by Benoît B. Mandelbrot | Goodreads
More Than You Know Book: More Than You Know: Finding Financial Wisdom in Unconventional Places by Michael J. Mauboussin | Goodreads
Merriman Best In Class ETF List: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)
Video Re Best In Class ETFs: Bootcamp #9 Best in Class ETF Update 2024 (youtube.com)
DFA Mutual Fund List: Funds | Dimensional
Truncated AI-bot Summary:
Can you imagine transforming your financial journey in the same way you might find camaraderie in your favorite dive bar? Welcome to Risk Parity Radio! Listener Frank reaches out with gratitude and a request for the best tools to backtest portfolios and determine safe withdrawal rates. We also tip our hats to Frank's generous donation to the Father McKenna Center, underscoring our ongoing charity drive in collaboration with the Financial Quarterback podcast.
Ever wondered which platforms provide the most reliable data for crafting your financial future? We break down some of the top tools in the industry, like Portfolio Visualizer, Portfolio Charts, and the Early Retirement Now toolbox, along with the new player, Testfolio. Along the way, we debunk myths around CAPE ratios and share a heartfelt story about our Risk Parity Radio logo, born out of the creativity sparked during the 2020 lockdown.
From a cheerful Scottish greeting to a deep dive into international investing, this episode promises both humor and expertise. We tackle Aaron’s email about international ETFs, emphasizing the importance of non-overlapping funds for true diversification. Drawing from resources like the Merriman Foundation and Chris Pedersen's analyses, we guide you in selecting top-tier funds from DFA and Avantis.
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In this episode we answer emails from Jared, Jon and Jimmy. We got the three Js! We discuss Jared's work to create AI Uncle Frank, his accumulation variation of the O.P.T.R.A. sample portfolio, carry strategies, whether to reinvest distributions and using multiple managed futures funds.
Links:
Father McKenna Center Donation Page (don't forget to include "The Financial Quarterback Match" in the comment/dedication box): Donate - Father McKenna Center
Jared's Accumulation O.P.T.R.A. Portfolio: testfol.io
Resolve Asset Management Video on Carry Strategies: Navigating Market Volatility Mastering Managed Futures and Carry Strategies (youtube.com)
CCRV Fund: CCRV – iShares® Commodity Curve Carry Strat ETF – ETF Stock Quote | Morningstar
ICITF Fund: ICITF – iPath® Optimized Currency Carry ETN – ETF Stock Quote | Morningstar
Video on QIS Fund: Simplify QIS Fund Deep Dive (youtube.com)
Amusing AI-Bot Generated Summary:
Ever wondered if leveraging your investment portfolio could lead to better returns? Discover Jared's transformative journey from a mechanical engineer to a machine learning enthusiast and the creator of a Risk Parity Radio chatbot! Jared shares his intricate process of optimizing a traditional 50-50 stock allocation into a more diversified and leveraged strategy. We’ll dissect the potential benefits and pitfalls of his approach, with a spotlight on managing leverage, mitigating drawdowns, and enhancing overall risk management.
We also extend our heartfelt thanks for your generous contributions to the Father McKenna Center. Dive into the exciting realm of AI as we discuss how it's revolutionizing podcast transcriptions and even mimicking the host's voice. Plus, we explore translating podcast episodes into a book with the help of AI. Don't miss our deep dive into listener questions about leveraging portfolios for accumulation, the intricacies of handling dividends and distributions, and an examination of managed futures funds like DBMF and KMLM. Whether you’re in the accumulation or decumulation phase, we’ve got actionable strategies to help you stay on track for long-term success.
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In this episode we answer emails from Justin, Joe and Jenzo. We discuss the legacy of Risk Parity Chronicles, basic accumulation principles, and what we can learn from a debate on gold between Ben Felix and Tyler of Portfolio Charts. And
talk about our charitable promotion for the Father McKenna Center.
And then we go through our weekly portfolio reviews of all eight of the sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations: Donate - Father McKenna Center
Financial Quarterback Podcast With Yours Truly: Breaking Down the Holy Grail of Diversified Portfolios w/ Frank Vasquez Jr. (Risk Parity Radio) (youtube.com)
Justin's Station Wagon Portfolio: The Station Wagon Portfolio - Google Docs
Jenzo's Link to the Great Gold Debate: Ben & Tyler showdown - Google Docs
AI-generated summary (use at your own risk):
Can diversification safeguard your portfolio against turbulent market conditions? Join us at Risk Parity Radio, the podcast with a dive bar vibe where humor meets investment wisdom. This episode begins with a performance review of our eight sample portfolios, demonstrating how diversification has been a protective shield amid market volatility. Plus, we're excited to feature our charitable promotion for the Father McKenna Center, urging listeners to donate and take advantage of our matching offer.
We welcome back Justin, the insightful mind behind the now-dormant "Risk Parody Chronicles," for a thought-provoking discussion on the value of freely sharing financial knowledge. We revisit the Station Wagon Portfolio and emphasize the significance of adhering to a well-devised investment strategy. We also respond to Joe's questions about the accumulation phase, advocating for a combination of low-cost index funds, such as S&P 500 and small-cap value funds, and stressing the importance of consistency over the allure of recent top performers.
Curious about the timeless debate on gold's role in modern portfolios? We dissect a lively debate between Tyler and Ben Felix, scrutinizing the historical and contemporary merits of holding gold. Alongside, we provide a detailed market analysis, highlighting the recent rise in gold and long-term treasury bonds, and review how different portfolios like the All Seasons and Golden Butterfly have weathered the storm. This episode is a reminder to employ critical thinking and adopt a comprehensive approach when evaluating investment strategies and market trends.
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In this episode we answer emails from Ed, Cy, Visitor 5002, and Lucas. We discuss preferred shares funds, rebalancing and ranting, how the podcast sausage is made and Risk Parity Chronicles. And the charitable matching opportunity with the Financial Quarterback for the benefit of the Father McKenna Center.
Links:
Father McKenna Center Donation Page (don't forget to include "The Financial Quarterback Match" in the comment/dedication box): Donate - Father McKenna Center
Financial Quarterback Podcast With Yours Truly: Breaking Down the Holy Grail of Diversified Portfolios w/ Frank Vasquez Jr. (Risk Parity Radio) (youtube.com)
PFFV On Morningstar: PFFV – Global X Variable Rate Preferred ETF – ETF Stock Quote | Morningstar
Risk Parity Chronicles On YouTube: Risk Parity Chronicles - YouTube
Golden Butterfly Portfolio In Depth: Golden Butterfly Portfolio – Portfolio Charts
Unedited Artificial Intelligence Description:
Ever wondered how to double the impact of your charitable donations while navigating the world of preferred shares funds? On this episode of Risk Parity Radio, we kick things off with something special—a segment dedicated to answering listener emails and revealing our latest charitable promotion for the Father McKenna Center. Learn about an incredible matching donation opportunity connected to my appearance on the Financial Quarterback podcast, and hear about a clever donation strategy using donor-advised funds suggested by our listener, David.
Thinking about adding preferred shares to your portfolio but not sure where to start? Listener Ed's email prompts a deep dive into the mechanics and benefits of preferred shares funds. Discover why these funds are appealing, particularly for those in high tax brackets, as we compare ETFs such as PFF, PGX, PFXF, and FPE. I'll share my current top picks, PFFV and PFFD, which boast lower expense ratios and higher dividend payouts, and discuss the tax advantages of qualified dividends. Whether you're looking to enhance your yield or add stability to your investments, this segment is packed with actionable insights.
Finally, we turn our focus to the critical practice of portfolio rebalancing, illustrating how this strategy can help you buy low and sell high. We'll share recent examples to highlight its effectiveness, all while adding a bit of entertainment with a playful nod to "Willy Wonka & the Chocolate Factory." Don't forget to engage with us by subscribing, giving ratings, and leaving reviews on your favorite podcast platforms. Tune in for a perfect blend of insightful financial advice, engaging listener interactions, and tips on making a difference through thoughtful charitable contributions.
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In this episode we answer questions from Nonamed, Ronald, and Jose. We discuss how sensational financial media works and why you should ignore it, being thankful for our listeners and how correlations work and relate to macro-economic environments in the context of the Holy Grail principle. And we discuss our charitable match outreach for the Father McKenna Center.
And then we go through our weekly portfolio reviews of all eight of the sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations: Donate - Father McKenna Center
Risk Parity Radio RSS Feed Page For Word Searching The Podcast: Risk Parity Radio RSS Feed (buzzsprout.com)
UNC Paper (not Duke!) Re Treasury Bond Correlations In Recessions (see Page 53 for Chart): ssrn_id4768684_code533828.pdf (elsevier-ssrn-document-store-prod.s3.amazonaws.com)
Ray Dalio Explains The Holy Grail Principle: Ray Dalio breaks down his "Holy Grail" (youtube.com)
Bridgewater Paper With Basic Quadrant Model Example (see Page 8): Bridgewater Paper 2009.12 AW Info Pack.doc (granicus.com)
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In this episode we answer emails from Steve, Grant, and Alexi (a/k/a "the Dude"). We discuss investing in managed futures and property and casualty insurance companies, rebalancing mechanisms and fitting those into a portfolio, Grant's various gambling problems with leveraged funds and assorted Metaverse doom-scrolling, and the recent annoying changes with Portfolio Visualizer. And our charitable push for our charity, the Father McKenna Center --get the match!
Links:
Father McKenna Center Donation Page (don't forget to include "The Financial Quarterback Match" in the comment/dedication box): Donate - Father McKenna Center
SocGen Managed Futures CTA And Trend Indices: Prime Services (Newedge) Indices (societegenerale.com)
Kitces Rebalancing Methods Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
New Testfol Backtester With OPTRA Example: testfol.io
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In this final episode of Season Four we discuss the concepts of rebalancing and reallocating in all their glory and go through the planned annual rebalancings for four of the sample portfolios in excruciating detail. We also discuss all of the assets and allocations in the Risk Parity Ultimate portfolio and which ones we actually own in real life.
And we go through our weekly portfolio reviews of all eight of the sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional link:
Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations: Donate - Father McKenna Center
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In this episode we answer emails from Judy, Steve and MyContactInfo. We discuss a recent offer by The Financial Quarterback podcast to match donations the the Father McKenna Center (yay!), why you should buy gold ETFs and NOT physical gold, Cartman and Kyle, and the varying value of education depending on the individual.
Links:
Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations: Donate - Father McKenna Center
ETF Database -- Gold ETFs: Gold ETF List (etfdb.com)
Listener John's Gold ETF link: 9 low cost physical Gold ETFs for portfolio parity - SmartMoneyToolbox
GLD FAQs: FAQs > USA > SPDR Gold Shares (GLD). Bringing the gold market to investors
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In this episode we answer emails from Brian, Wendy, and Midas. We discuss the bond fund GOVT and how it fits or doesn't fit in portfolio construction, some basics about IRA conversions and retirement resources (podcasts and groups), and follow up on Episode 340 with a discussion on our pedagogical approach, the pluses and minuses of the Socratic Method and tilting at logical fallacies.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Morningstar Analysis of GOVT: GOVT – Portfolio – iShares US Treasury Bond ETF | Morningstar
Big Picture Retirement Podcast About IRA Conversions: When Roth IRA Conversions Go Too Far (bigpictureretirement.com)
Andy Panko YouTube Topical Playists: Retirement Planning Education - YouTube
Link to Retirement Planning Education Facebook Group (and other materials): Retirement Planning Education Facebook group
Trogdor (Just Because): Trogdor Song (youtube.com)
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In this episode we answer emails from Jeffrey, Justin and Matt. We discuss the concept of "skew" generally and in the context of investing in managed futures, a "station wagon" portfolio similar in macro-allocations to the new OPTRA sample portfolio, and the age old question of whether to pay down debt or invest. (Uncle Frank says "Do Both.")
Links:
Basic Article About Skew: Right Skewed vs. Left Skewed Distribution (investopedia.com)
MFUT Fund Fact Page: Cambria Chesapeake Pure Trend ETF (MFUT) | Cambria Funds
Justin's Station Wagon Portfolio: The Station Wagon Portfolio - Google Docs
Risk Parity Chronicles Video on Asset Swaps: How to Do an Asset Swap (youtube.com)
Arch Portfolio Backtester: Portfolio Backtest — Arch Indices Portfolio Analyzer
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In this episode we introduce a new sample experimental portfolio, the O.P.T.R.A., which is now also featured on the Portfolios Page at the website. It is a mixture of the latest and greatest ideas in portfolio construction.
Links:
O.P.T.R.A. backtest: testfol.io
O.P.T.R.A. correlation analysis: testfol.io
Morningstar UPRO: UPRO – Portfolio – ProShares UltraPro S&P500 | Morningstar
Morningstar AVGV: AVGV – Portfolio – Avantis All Equity Markets Value ETF | Morningstar
Morningstar GOVZ: GOVZ – Portfolio – iShares 25+ Year Treasury STRIPS Bd ETF | Morningstar
Morningstar GLDM: GLDM – Portfolio – SPDR® Gold MiniShares | Morningstar
Morningstar DBMF: DBMF – iMGP DBi Managed Futures Strategy ETF – ETF Stock Quote | Morningstar
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In this episode we answer emails from Marco Esquandolas, Adrian and Paulo. We discuss portfolio advice for a precocious 11-year old, a simple return-stacked portfolio a la Corey Hoffstein and the priority of the Simplicity Principle, and some recent articles about the Fama-French database.
Links:
Corey Hoffstein Talking About His Return-Stacked Portfolio: Show Us Your Portfolio: Corey Hoffstein (youtube.com)
Paulo's Bloomberg Article: A Fight Over Factor Investing Tests a Pillar of Modern Finance - Bloomberg
Summary Critique of Fama-French Database Issues: ftalphaville.ft.com/content/2e87e7f9-c2ad-4dcb-afc3-2a0f8d0a6ca3
Fama-French Response Paper: Production of U.S. Rm-Rf, SMB, and HML in the Fama-French Data Library by Eugene F. Fama, Kenneth R. French :: SSRN
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In this episode we answer emails from Steven, Kaleb and Reynolds. We discuss a levered small cap fund (SAA), short-term cash management and related ETFs, and how to compare and use bond funds of differing durations.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
ETF Database -- Ultra Short Term Bond Funds: The Web's Best ETF Screener | ETF Database (etfdb.com)
Morningstar Article on BOXX: BOXX ETF Promises T-Bill Returns Without Taxable Income | Morningstar
Morningstar Analysis of IEF: IEF – Portfolio – iShares 7-10 Year Treasury Bond ETF | Morningstar
Kitces Re-balancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
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In this episode we answer emails from Mark, Casey, and Kyle. We discuss transitioning from a drecky complicated Personal Capital/Empower portfolio to a simple risk-parity style portfolio, the song "Anchorage", and Sam Kinison's take on an IUL policy.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Mark's Portfolio Analysis: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Testfol.io Analysis of Mark's Portfolio: testfol.io
Larry Kennedy Album on Spotify: Everybody Knows - Album by Larry Kennedy | Spotify
Andy Panko's Insurance Playlist: Insurance - YouTube
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In this episode we answer emails from David, Eric from Cincy, and Pete. We discuss Mike Green's recent commentary about index fund trends and whether its a problem, ROAD HOUSE, children, and Larry Swedroe's esoteric personal portfolio.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Mike Green Interview: Michael Green: Market Efficiency Is Not The Question | Rational Reminder 302 (youtube.com)
Larry Swedroe Article #1: Addressing Issues With High U.S. Equity Valuations (kitces.com)
Larry Swedroe Article #2: In The Long Run, Stocks Outperform Bonds, Or Do They? (kitces.com)
Larry Swedroe's Personal Portfolio: Show Us of Your Portfolio II: Larry Swedroe on Alternatives and Interval Funds (youtube.com)
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In this episode we answer emails from Dr. Anonymous, Lance, John and Eli. We discuss how to find a lawyer, extended term bond funds, gold ETFs and how ETFs are constructed.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
John's Gold ETF link: 9 low cost physical Gold ETFs for portfolio parity - SmartMoneyToolbox
ETF Article: Exchange-Traded Fund (ETF): What it is and How to Invest (investopedia.com)
"Authorized Participant" Article: What Is an Authorized Participant? Definition, Examples, Benefits (investopedia.com)
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In this episode we answer emails from Stuart, George and MyContactInfo. We discuss a follow-up on another listener's accumulation portfolio, the foibles of trying to predict future interest rates and common fallacious reasoning, levered inverse treasury bond funds and other funds that do well in rising interest rate environments, and a follow up on our target date fund rant episode (#333).
Links:
Portfolio Visualizer Analysis of UPRO and synthetic alternatives: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
TestFol Analysis with an inverse treasury bond exposure: testfol.io
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In this episode we answer emails from Jeff, James and Graham. We discuss standard deviations and other metrics and tools at Portfolio Charts, revisit Episode 194 regarding the "Cockroach" portfolio, timing the transfer of a 401k to and IRA for better management options and some reasons for holding on to traditional IRAs and not converting them.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Portfolio Matrix Tool With Bookmark To Jeff's Portfolio: Portfolio Matrix – Portfolio Charts
Portfolio Annual Returns Tool With Bookmark To Jeff's Portfolio: Annual Returns – Portfolio Charts
Portfolio Drawdowns Tool With Bookmark To Jeff's Portfolio: Drawdowns – Portfolio Charts
Cockroach Portfolio Link: The Cockroach Approach Whitepaper - Mutiny Fund
Big Picture Retirement Podcast Re Roth Conversions: When Roth IRA Conversions Go Too Far (bigpictureretirement.com)
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In this episode we talk about some recent unfavorable changes to Portfolio Visualizer, have a look at a new backtesting tool, and then get back at it with emails from James, Andrew, Phil and Frodo. We discuss how flexible withdrawal strategies improve safe withdrawal rates and how we use them as a fail-safe or backstop to our 3-1-1 plan, options for financing buying a house, a funny Avengers video and transitioning grandma's 19-fund portfolio to something simpler and better.
Links:
Rob Berger Video re Portfolio Visualizer: Navigating Portfolio Visualizer's New Design and a Free Alternative (youtube.com)
Testfol Backtester with A Sample Analysis: testfol.io
Morningstar Report re Variable Withdrawal Strategies: Six Retirement Withdrawal Strategies that Stretch Savings | Morningstar
Portfolio Charts Variable Withdrawal Calculator: Retirement Spending – Portfolio Charts
Phil's Video: Introducing NOW internet (youtube.com)
Big ERN Article Re Cederburg Paper: 100% Stocks for the Long Run? - Early Retirement Now
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In this episode we answer emails from Scott, Midas, and Neil. We discuss national debt apocalypse theories, the misuse and cherry-picking involved in bad data analyses and umbrella insurance.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Reinhardt & Rogoff Book: This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart | Goodreads
Money For The Rest of Us National Debt Masterclass: National Debt Master Class Part 1/3 | Money for The Rest of Us
Security Analysis Podcast with Yours Truly: Frank Vasquez: Risk Parity Investing Part 2 (securityanalysis.org)
Portfolio Charts "Ingredients" Article: Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts
Long Term Treasuries vs. Stock Market 1981-2010: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Umbrella Insurance: What Is Umbrella Insurance Policy? Definition and If You Need It (investopedia.com)
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In this episode we answer emails from Average Joe, Matt, Kimbrough and Jon. We discuss goooooold, Matt's proposed portfolio, preferred shares fund PFF and how often to look at your portfolio without going insane.
But first we discuss a recent article from David Blanchett recognizing that a 5% withdrawal rate ought to be the standard for financial planners and a New York Times article about financial independence and the EconoMe conference.
Links:
David Blanchett 5% Rule Article: Is the 4% Rule Too Safe? | ThinkAdvisor
2013 Article Saying the Opposite: The 4 Percent Rule is Not Safe in a Low-Yield World by Michael S. Finke, Wade D. Pfau, David Blanchett :: SSRN
New York Times FIRE Article (paywall): Meet the FIRE Savers Who Retired Early - The New York Times (nytimes.com)
Matt's Proposed Portfolio: Portfolio Matrix – Portfolio Charts
Father McKenna Center Donation Page: Donate - Father McKenna Center
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In this episode we answer emails from Kimbrough from Anchorage and anonymous Visitors from British Columbia and Denver. We discuss fish hatching and slaughterhouses, long term treasury bond funds, the inherent problems and inefficiencies with many popular but inflexible withdrawal plans, and how we use our flexible 3-1-1 guidelines to match and maximize spending, fixing a cash hoarding problem and why you want a growth/value split in your stock allocations.
Links:
Security Analysis Podcast with Yours Truly: Frank Vasquez: Risk Parity Investing Part 2 (securityanalysis.org)
VSG's Weird Portfolio: Weird Portfolio – Portfolio Charts
Merriman Best-In-Class ETFs: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)
Merriman Podcast re Best-In-Class ETFs: Best in Class ETF 2024 Updates (paulmerriman.com)
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In this episode we answer emails from Steve, Mark, and Judy. We take a frolic and detour into talking about going to law schools, talk about some Rob Berger videos and bucketeering, robo-advisor things and why they are not very helpful, and better choices.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Spring 2024 Newsletter: Newsletter Spring 2024 - Father McKenna Center
Rob Berger Video on "Know Nothing" Portfolios: Fed Chair Powell Just Taught A Masterclass On Investing (youtube.com)
Rob Berger Interview of Harold Evensky: Conversation with the Father of the Bucket Strategy--Harold Evensky - YouTube
Rob Berger On "Bucket Strategies" Generally: The Bucket Strategy is Flawed--Do this Instead - YouTube
Rob Berger On The "Never Retire" Retirement Strategy: 7 Reasons to Never, Ever Retire (even if you can) (youtube.com)
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In this episode we answer emails from Zane, Slim Jim, and Jim Kirk. We discuss recent moves in world gold markets, good and bad mental models of collective action and critical events, including Mimetic Theory and fractal sand pile models, avoiding the physical metals racket, the data and evidence showing that retirees experience inflation at a much lower rate than the CPI (and most financial planners and DIYers get this completely wrong, resulting in bad planning), and the new global portfolio analysis article at Portfolio Charts (again).
Links:
Retirement Spending Smile models: What Is The 'Retirement Spending Smile'? | Retirement Researcher
Spending Trajectories After Age 65 Research Paper and Summary: Spending Trajectories After Age 65: Variation by Initial Wealth | RAND
Portfolio Charts Article Re Global Portfolios: What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts
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In this episode we answer emails from Anderson, Brian and Drew. We entertain ourselves on 4/20 with Anderson's "Uncle Frank" Portfolio and learn something from it, discuss asset swapping for management of retirement accounts with a hat tip to Justin (Risk Parity Chronicles), and discuss the new Global Portfolio analysis and tools from Tyler at Portfolio Charts.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Anderson's "Uncle Frank" Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
"How To Do An Asset Swap" Video From Justin: How to Do an Asset Swap (youtube.com)
New Portfolio Charts Global Portfolio Analysis And Tools: What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts
Father McKenna Center Donation Page: Donate - Father McKenna Center
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In this episode we answer emails from Kyle, Andrew, Sameer and James. We discuss some portfolio comparisons of levered 60/40 portfolios, interpreting and comparing safe withdrawal rates from various calculators and their practical application in consideration of variable expenses and needs (our 3-1-1 flexible withdrawal plan), the foolish consistencies of DIYer and financial planners who seem to enjoy discouraging retirement spending, and recent articles about Fidelity's spat with some ETF providers.
Links:
Kyle's Portfolio #1: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Kyle's Portfolios #1 and #2: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Kyle's Portfolios #1, #2 and #3: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Golden Butterfly Portfolio -- SWR And Other Characteristics: Golden Butterfly Portfolio – Portfolio Charts
Larry Swedroe Interview About New Book and Factor Investing: ‘Buffett really was not a great stock picker’: Financial researcher Larry Swedroe on how investors can emulate the billionaire investor – NBC Connecticut
Article #1 re Fidelity and Fees: Fidelity Puts Nine ETF Firms on Notice That New Fees Are Looming - Bloomberg (archive.fo)
Article #2 re Fidelity and Fees: Fidelity Adds Surcharge to ETF Platform | etf.com
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In this episode we answer an email from Ingrid. We discuss target date funds in depth and why they are not good choices for investors. We review their history and recent academic research that reveals the truth. You may not like it, but we hope you can handle it.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional link:
Referenced Academic Paper Revealing The Awful Truth About Target Date Funds: The Unintended Consequences of Investing for the Long Run: Evidence from Target Date Funds by Massimo Massa, Rabih Moussawi, Andrei Simonov :: SSRN
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In this episode we answer emails from Ed, Anderson and Joe. We discuss assisting aging parents running out of money, Anderson's levered accumulation portfolio and locating the assets, and using the G Fund in a TSP as a short-term bond fund.
Links:
Portfolio Matrix Used to Analyze Anderson's Portfolio (insert allocations per podcast): Portfolio Matrix – Portfolio Charts
Morningstar Article re G Fund: How Good Is the Federal Government’s G Fund? | Morningstar
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In this episode we answer questions from Dale, Brad and Corey. We discuss a new paper about US dollar dominance and the common narrative fallacies associated with that issue, using the Rule of 55 for 401(k) withdrawals, the Nicest Guy of FI, and the basics of constructing portfolios with high historical safe withdrawal rates.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Marketwatch Article: Dethrone the dollar? 5 charts show how U.S. currency still rules world economy. - MarketWatch
Paper re Status of US Dollar: delivery.php (ssrn.com)
Schwab Article re The Rule of 55: Retiring Early? 5 Key Points about the Rule of 55 | Charles Schwab
DBMF Quarterly Review: iMGP DBi Managed Futures Strategy ETF Update with Andrew Beer | April 2024 (youtube.com)
Andrew Beer Interview On The Development And Use Of Managed Futures In Diversified Portfolios: SI290: Honey, I Shrunk the Trend-Following ft. Andrew Beer | Top Traders Unplugged
Portfolio Charts Portfolio Matrix Tool: Portfolio Matrix – Portfolio Charts
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In this episode we answer emails from Jon, Eli, and George. We discuss using the tools at Portfolio Charts, methods of charitable giving to our favorite charity, extreme podcast listening, what to invest in if you are speculating on inflation next year and other gambling problems, and applying the math of Shannon's Demon to show us why we should not let the Simplicity Principle tail wag the Holy Grail principle diversification dog when constructing diversified portfolios.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
New Portfolio Charts Article re Gold and Global Safe Withdrawal Rates: What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts
Shannon's Demon Article from Market Sentiment: Shannon's Demon - Market Sentiment
Shannon's Demon Article from Portfolio Charts: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Shannon's Demon Article from World Scientific: SWITCHING BETWEEN TWO LOSING STOCKS MAY ENABLE PARADOXICAL WIN: AN EMPIRICAL ANALYSIS (worldscientific.com)
Shannon's Demon Article from Breaking The Market: The Great Age of Rebalancing Begins - (breakingthemarket.com)
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In this episode we answer emails from Jetson and Jon (x2). We discuss good times to trade, transitioning to a risk parity style portfolio with sub-optimal components and related considerations, experimenting with and learnings from the tools at Portfolio Charts, including the Portfolio Matrix and Drawdown Analyzer, and Gooooold!
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center: Home - Father McKenna Center
Portfolio Matrix Calculator: Portfolio Matrix – Portfolio Charts
Portfolio Drawdowns Calculator: Drawdowns – Portfolio Charts
Portfolio Charts "Ingredients" Article: Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts
Safe Withdrawal Rate Series Article about Gold: Using Gold as a Hedge against Sequence Risk - SWR Series Part 34 - Early Retirement Now
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In this episode we answer emails from Mark, Justin, and Cy, and also update our answer to last episode's email from Sean. We talk about a different approach to Sean's situation, Mark's experiments with leveraged funds, rebalancing and assorted gambling problems, reporting on the sample portfolios at the website, the difficulties of trying to plan "how much" goes in retirement, Roth and ordinary accounts, and a full-on nostalgic Blazing Saddles experience.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Mark's Experimental Portfolio Backtest: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=3rBetjbWFjRbRZSN6uMuIa
Shannon's Demon Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Recent Interview of Value Stock Geek: Inside the Mind of a Value Investor w/ Value Stock Geek (theinvestorspodcast.com)
Portfolio Charts Portfolio Matrix: Portfolio Matrix – Portfolio Charts
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In this episode we answer emails from Andrew, Sean, and MyContactInfo. We discuss QDSIX and other AQR funds and their approaches, good and bad uses of bond ladders, and macro-issues pertaining to projected global population declines in the future.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
QDSIX fact page: AQR Diversifying Strategies Fund - QDSIX
Ben Carlson Article on Bond Funds vs. Bond Ladders: Owning Individual Bonds vs. Owning a Bond Fund - A Wealth of Common Sense
Niall Ferguson Article: Global Population Collapse Isn't Sci-Fi Anymore: Niall Ferguson - Bloomberg
Shock of Gray Book: Shock of Gray: The Aging of the World's Population and How it Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival, and Nation Against Nation by Ted C. Fishman | Goodreads
Hans Rosling's Factfulness: Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think by Hans Rosling | Goodreads
Hans Rosling Video on Population: Why the world population won’t exceed 11 billion | Hans Rosling | TGS.ORG (youtube.com)
Hans Rosling Factfulness Video: The mindset of factfulness | Hans Rosling | TGS.ORG (youtube.com)
Happy Pod: BBC World Service - Global News Podcast, The Happy Pod: The gift of sight
Portfolio Charts Withdrawal Rates Article: How to Harness the Flowing Nature of Withdrawal Rate Math – Portfolio Charts
Portfolio Charts Portfolio Matrix Comparison Tool: Portfolio Matrix – Portfolio Charts
Portfolio Charts Portfolio Risk-Return Comparison Tool: Risk And Return – Portfolio Charts
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In this episode we review why we are here and then answer emails from Paulo, Paul G, and Carlos. We discuss our recent trip to the EconoMe Conference, Paulo's portfolio ideas, the plague of being unable to spend money that afflicts most popular personal finance personalities, Mark's Money Mind (a new podcast), why the Simplicity Principle should not override the Holy Grail and other investing principles, and investing from emerging market countries.
Links:
Mark's Money Mind podcast (YouTube version): The Financial Speedometer: Tracking Your Income & Expenses | Episode 004 (youtube.com)
Paul G's Golden Butterfly analyses: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=2lyVPkZFRfTEgVF8cZIAe5
Shannon's Demon and Rebalancing Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Carlos' Article re Emerging Markets: Safe withdrawal rates from retirement savings for residents of emerging market countries (repec.org)
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In this episode we answer emails from Ed, Jesse and Kyle. We discuss TMF and leverage in bond funds (and gambling problems), my recent ranting in Episode 321 and Ray Dalio's limitations and foibles, and my musings on guinea pigs and our recent trip to Peru. It's action packed!
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
And add a note about the upcoming EconoMe Conference.
Additional links:
TMF web-page with holdings: 20+ Year Treasury Bull and Bear 3X ETFs | TMF TMV | Direxion
Portfolio Visualizer TMF vs. TLT vs. ZROZ Analysis: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=7aqdp6fzBF4NWiP8rUdH9m
Claude Shannon's Demon Article: Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts
Father McKenna Center: Home - Father McKenna Center
EconoMe Conference Speakers: Our Speakers - EconoMe (economeconference.com)
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In this episode we answer questions from Mark, Broken Jack and Gus. We discuss a specific withdrawal plan and why it does not need to be too complicate, the considerations and differences between complicated or risk-based problems and complex or uncertainty-based problems, ideas for people who have not saved enough by the time they get to their sixties and why to avoid "magic button" investment strategies like buy-write funds and deal with a correction about the ETF RSBT.
Links:
Immediate Annuities Website for Pricing Simple Annuities: Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com
The Misbehavior of Markets by Benoit Mandelbrot: The Misbehavior of Markets: A Fractal View of Financial Turbulence: Mandelbrot, Benoit, Hudson, Richard L.: 9780465043576: Amazon.com: Books
Catching Up To FI for Late Starters: Financial Independence - Catching up to FI
RSBT Website and Information: Bonds Managed Futures - Return Stacked ETF (returnstackedetfs.com)
Father McKenna Center: Home - Father McKenna Center
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In this episode we answer emails from Richard, Andrew and Drew. We discuss the now much-maligned Cederburg paper (again) and listen to Cliff Asness flog it, Jerry Parker's new managed futures ETF, TFPN and guidelines for making portfolio shifts.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
And add a note about the upcoming EconoMe Conference.
Additional links:
Cliff Asness Commentary About the Cederburg Paper: Why Not 100% Equities (aqr.com)
BankerOnWheels Article About the Cederburg Paper: Should You Invest 100% In Equities? (bankeronwheels.com)
Tommy Boy Clip: Tommy Boy (8/10) Movie CLIP - Housekeeping (1995) HD (youtube.com)
Jerry Parker on podcast about TFPN: TTU145: Jerry Parker, Founder of Chesapeake Capital (toptradersunplugged.com)
TFPN Webpage: Trend Following ETF | Blueprint Fund Management (tfpnetf.com)
EconoMe Conference: EconoMe Conference - March 15th-17th, 2024
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In this episode we answer emails from Damon, Pete and Jeff. We discuss the benefits of aggregating assets and portfolios as a couple, basic tax location ideas, children with gambling problems and fun games to play with them, and resources for researching leveraged, diversified portfolios (e.g., "Return Stacking").
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Leveraged ETFs Article: Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs (ddnum.com)
Ben Felix Video On Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)
Return Stacked Article: Capital Market Assumptions when Return Stacking - Return Stacked® Portfolio Solutions
Return Stacked ETFs: Home - Return Stacked ETF (returnstackedetfs.com)
Ray Dalio Video on Holy Grail Principle: Ray Dalio breaks down his "Holy Grail" (youtube.com)
Optimized Portfolio Website: Optimized Portfolio - Investing and Personal Finance
Portfolio Visualizer Backtester: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
ReSolve Riffs Podcast: ReSolve Riffs Investment Podcast - ReSolve Asset Management (investresolve.com)
Simplify Assets Podcast: Keeping it Simple Series with Mike Green & Harley Bassman | Simplify
Flirting With Models Podcast (Corey Hoffstein): Flirting with Models – The podcast all about quantitative investing
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In this episode, we reflect on a recent podcast from the Value Stock Geek and embark on a nice little rant about recent mailings I have received from the financial services industry.
Link:
Security Analysis Podcast from the Value Stock Geek: The Security Analysis Podcast | Value Stock Geek | Substack
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In this episode we answer emails from Lee, Phil and Carl. We discuss using Golden Butterfly and Golden Ratio portfolios for intermediate accumulations, the Cederburg Pickelhaube Portfolio (again), funds UUP and EUO as diversifiers, our open source business model and tax issues for US temporary residents.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Portfolio Visualizer Backtester: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Portfolio Charts Risk/Return Comparison Tool: Risk And Return – Portfolio Charts
Nomad Capitalist site: Nomad Capitalist | Offshore Tax and Lifestyle Strategies for Entrepreneurs
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In this episode we answer emails from Robert, MyContactInfo, and Stuart. We discuss growing and transitioning a FIRE portfolio, the drawbacks of too much cash, the Cederburg paper (again) and his Pickelhaube Portfolio, and more fun with leveraged ETFs.
Links:
Sean Mullaney Podcast re 72(t): How to Access Your Retirement Accounts Before 59.5 | Sean Mullaney | Ep 475 | ChooseFI
Ben Felix Article re the Cederburg paper: Understanding the role of bonds in retirement portfolios | Advisor.ca
Early Retirement Now Critique of the Cederburg Paper: 100% Stocks for the Long Run? - Early Retirement Now
Paper on Optimal Leverage: Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs (ddnum.com)
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In this episode we answer emails from Anderson, Dennis and Brian. We discuss a proposed levered portfolio and leverage in general, revealed preferences applied to portfolio construction and matching construction to actual or stated goals and staying alive with Andean flute playing.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Ben Felix Video On Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)
Optimized Portfolios: Optimized Portfolio - Investing and Personal Finance
Warren Buffett's Alpha Article: Full article: Buffett’s Alpha (tandfonline.com)
Excess Returns -- Show Us Your Portfolio: Show Us Your Portfolio: Corey Hoffstein (youtube.com)
Rational Reminder Podcast -- Best Practices In Family Wealth Management: Episode 282: Dr. Jim Grubman: The Psychology of Wealth — Rational Reminder
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In this episode we answer emails from Blake, Brown and Christian. We discuss new research into the long-term performance of leveraged funds, other gambling problems and the tax reporting of gold ETFs.
Links:
Blake's Backtest: Unleveraged TQQQ (portfoliotree.com)
Blake's Article: ⚠️ Leveraged ETFs ⚠️. Why They Sell Themselves Short | by ETF_Guy | Jan, 2024 | Medium
Corey Hoffstein's Return Stacked ETFs: Home - Return Stacked ETF (returnstackedetfs.com)
Ben Felix Video on Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)
Christian's Link re GLDM Tax Data: World-Gold-MiniShares-Tax-Data-12-31-22-Final.pdf (spdrgoldshares.com)
GLDM Prospectus: doc-viewer (ssga.com)
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In this episode we answer emails from Matthew, Matthew and Matthew. Our development has apparently been arrested. We discuss basic principles and economic history pertaining to inflation, a levered accumulation portfolio and why private real estate platforms are largely just a "meh" kind of investment.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
When Money Dies: When Money Dies: The Nightmare of the Weimar Hyper-inflation by Adam Fergusson | Goodreads
Lords of Finance: Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed | Goodreads
Fifty Years In Wall Street: Fifty Years in Wall Street | Wiley
Price of Time: The Price of Time by Edward Chancellor | Goodreads
This Time is Different: This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart | Goodreads
Portfolio Visualizer Analysis of Matthew's Proposed Levered Portfolio: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=16aW147QWi5jCXws2tqXpg
EconoMe Conference (discount code "riskparityradio"): EconoMe Conference - March 15th-17th, 2024
White Coat Investor Private Real Estate Affiliate Links: Real Estate Investing Company Partners | White Coat Investor
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In this episode we answer emails from Paulo, Phil, and Visitor 5858. We discuss cognitive biases in the context of long-term care and unexpected medical expenses, follow ups on Episodes 307 and 308, David Stein's "garden approach" to investing, and what the purpose of gold is in a diversified portfolio.
And talk about our recent vacation in Peru.
Links:
Peter Attia's "Outlive" book: Outlive: The Science & Art of Longevity - New Book by Peter Attia (peterattiamd.com)
"Happy Body" book: The Happy Body Book Home - The Happy Body
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In this episode we answer emails from Paul, Greg and Stuart. We discuss various portfolio visualizer analyses, correlations, Sharpe and Sortino ratios and issues pertaining to rebalancing.
Links;
Paul's Truncated Analysis: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=3fTid2mNzw2PPRhYmjAGGz
Longer Analysis with More Data: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=2PBlJj89KNGhCiNBkCDMaV
Larry Swedroe's Portfolio: Show Us of Your Portfolio II: Larry Swedroe on Alternatives and Interval Funds (youtube.com)
VISVX (VSIAX) vs. VBR Comparison: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=2bfrlatwi8J4WhwvLR8dIo
Corey Hoffstein on Rebalancing Timing #1: Corey Hoffstein - Rebalance Timing Luck (S2E11) (youtube.com)
Corey Hoffstein on Rebalancing Timing #2: 10 Reducing 'Timing Luck' and Liquidity Cascades - Corey Hoffstein, Newfound Research (youtube.com)
Optimal Rebalancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Smart Portfolios Book: Smart Portfolios: A practical guide to building and maintaining intelligent investment portfolios: Carver, Robert: 9780857195319: Amazon.com: Books
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In this episode we answer emails from Mr. Klingon, Bob, MyContactInfo, and Ralph. We discuss the Macro-Allocation Principle and Accumulation Portfolios, using a value-tilt for decumulation, the ins and outs of Monte Carlo simulations, Dr. Who and using gold in an accumulation portfolio.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Monte Carlo Analysis of 80/20 Portfolio on Portfolio Visualizer: Monte Carlo Simulation (portfoliovisualizer.com)
Monte Carlo Analysis of Diversified Retirement Portfolio: Monte Carlo Simulation (portfoliovisualizer.com)
EconoMe Conference (code "riskparityradio" to save 10%): EconoMe Conference - March 15th-17th, 2024
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In this episode we answer emails from Allison, Kenny and Steve. We discuss the methods and madnesses of financial media and the industry, modeling financial "experts" as hedgehogs and foxes, US dollars and debt, and correlations between treasury bonds and stocks, why portfolio income is just part of total returns and is not special, and incorporating managed futures into a Golden Ratio-style portfolios.
Links:
Duke Paper on Treasury/Stock Market Correlations: delivery.php (ssrn.com)
Picture Perfect Portfolios Comparison of Managed Futures ETFs: What's The Best Managed Futures ETF? DBMF vs KMLM vs CTA (pictureperfectportfolios.com)
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In this episode we answer emails from Kyle, Andy, Eric and Bluto. We discuss datasets at Portfolio Visualizer, guidelines for making allocation changes in a portfolio generallly and with managed futures, managed futures funds DBMF, KMLM and CTA and distribution issues, and EconoMe Conference 2024.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Kyle's First Portfolio Visualizer Link: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Kyle's Second Portfolio Visualizer Link: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Kyle's CASHX PV Link: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
ETF Database -- Managed Futures Funds: Managed Futures ETF List (etfdb.com)
Simplify ETFs Distribution List (CTA and others): Simplify Provides Estimated Capital Gain Distribution Information for 2023 | Simplify
EconoMe Conference -- Use Code "riskparityradio" for 10% discount: EconoMe Conference - March 15th-17th, 2024
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In this episode we do our annual portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio and compare them with various commercial reference portfolios.
And entertain a four-year old child and our adult offspring.
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In this episode we answer emails from Slippery Steve, Keith, Brian, and Kyle. We discuss a momentum allocation strategy called "the 12% Solution" and complex allocation strategies in general, preferred shares and preferred shares funds, notions about correlations from Rick Ferri's All About Asset Allocation book (pub. 2005 and 2010), putting the Simplicity Principle in it's proper context (not the first priority), and a fun listener-provided sound clip.
Link:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Duke Research Paper re Stock Market and Treasury Bond Correlations: delivery.php (ssrn.com)
Morningstar Analysis of PFFD: PFFD – Portfolio – Global X US Preferred ETF | Morningstar
Morningstar Analysis of JNK: JNK – Portfolio – SPDR® Blmbg High Yield Bd ETF | Morningstar
All About Asset Allocation (2010): All About Asset Allocation, Second Edition: Ferri, Richard A. A.: 9780071700788: Amazon.com: Books
Kyle's Rodney Dangerfield Clip: Then, Sell Sell Sell - Caddyshack (youtube.com)
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In this rather short episode we answer emails from Ralph, Scott, Eric, the Mysterious Visitor 9575, and Steven. We discuss my recent absence and predilections for silliness, a recent podcast from the Inflation Guy about safe withdrawal rates and coming updates to the website.
Links:
Inflation Guy Podcast Episode: Ep. 92: Safe Withdrawal Rates - Accounting for Inflation | Cents and Sensibility: the Inflation Guy Podcast (podbean.com)
Risk Parity Chronicles: Risk Parity Chronicles
Father McKenna Center Donation Page: Donate - Father McKenna Center
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In this episode we answer emails from Keith, Pete and Tim. We discuss developments in factor-based investing, portfolio transitions, RMDs, the recent Cederburg paper (again) and what goes on Down Under. And another visit from Lee-roy Jenkins.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Charity Navigator Score For the Father McKenna Center: Charity Navigator - Rating for Father McKenna Center Inc.
Alpha Architect Article On The Value Factor: AA-JBISFactorInvesting22LongOnlyValueInvesting.pdf (alphaarchitect.com)
Cederburg Paper (Again): delivery.php (ssrn.com)
New Rational Reminder Podcast with Scott Cederburg: Professor Scott Cederburg: Challenging the Status Quo on Lifecycle Asset Allocation | RR 284 (youtube.com)
Canstar Site with Aussie ETF Options: Compare Exchange Traded Funds (ETFs) | Canstar
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In this episode we answer emails from Jenzo, Priah and Matt. We discuss a levered portfolio and tracking errors, the limitation of Scott Cederburg's latest academic paper, bootstrapping -- what it is and how it works --, what "blend" means in factor-speak, and some pitfalls with Portfolio Visualizer's datasets,
And also the upcoming EconoMe Conference in March 2024 with a discount code for our listeners, "riskparityradio":
Links:
EconoMe Conference: EconoMe Conference - March 15th-17th, 2024
Academic Paper Critical of Lifecycle Investment Advice: delivery.php (ssrn.com)
Rational Reminder Podcast re same paper: Lifecycle Asset Allocation, and Retiring Successfully with Justin King | Rational Reminder 281 - YouTube
Portfolio Visualizer Documentation: Portfolio Visualizer Documentation
Matt's First Montecarlo Analysis: Monte Carlo Simulation (portfoliovisualizer.com)
Matt's Second Montecarlo Analysis: Monte Carlo Simulation (portfoliovisualizer.com)
Modifying Matt's Analysis to Account for Earlier Data: Monte Carlo Simulation (portfoliovisualizer.com)
Father McKenna Center Donation Page: Donate - Father McKenna Center
Father McKenna Center Charity Navigator Rating: Charity Navigator - Rating for Father McKenna Center Inc.
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In this episode we return from hiatus to answer emails from Popeye, Clint and Mr. Klingon. We discuss a JP Morgan report, giving to the Father McKenna Center, adventures with a bad planner-provided portfolio and how to fix it, and that cowbell known as small cap value.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
JP Morgan Reports: Guide to the Markets | J.P. Morgan Asset Management (jpmorgan.com)
Father McKenna Center Donate Page: Donate - Father McKenna Center
Merriman Best In Class Fund Recommendations: Best ETF Recommendations | Merriman Foundation (paulmerriman.com)
Small Cap Growth v. Small Cap Value Since 1972: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
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In this episode we answer emails from Visitor 5970, Frank, Alexi (a/k/a "the Dude") and Paul. We discuss the bond funds in the TSP, the Catching Up To FI podcast, Wealthfront's atrocious attempt at a risk parity fund and the Pinwheel Portfolio.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
TSP F Fund: F Fund | The Thrift Savings Plan (TSP)
Catching Up To FI podcast on YouTube: Catching up to FI - YouTube
Wealthfront's Troubled Risk Parity Fund: WFRPX – Wealthfront Risk Parity W Fund Stock Price | Morningstar
The Pinwheel Portfolio: Pinwheel Portfolio – Portfolio Charts
Portfolio Charts Risk-Return Portfolio Comparisons: Risk And Return – Portfolio Charts
Value Stock Geek Interview of Yours Truly: Frank Vasquez - Risk Parity Investing for the DIY Investor (securityanalysis.org)
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In this episode we answer emails from Steve, Jeff and Kenny. We discuss the complex foibles of Empower/Personal Capital portfolios and transitioning them. investing in gold and silver and tax treatments, and using the Vanguard Wellesley Fund as a model for very conservative investors.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Rob Berger Video about Investing In Gold: How to Buy Gold (Without Getting Ripped Off) - YouTube
Taxation of Gold ETFs Article: How Taxes Work For A Gold ETF Or ETP Investment (etftrends.com)
Taxation of PHYS Fund: Tax Information - Physical Gold Trust (sprott.com)
Yahoo version of Article re taxation of gold ETFs: How Taxes Work For Gold ETF & ETP Investments (yahoo.com)
Taxation of Section 1256 Contracts: Section 1256 Contract: Definition and Tax Rules (investopedia.com)
Vanguard Wellesley Portfolio: VWIAX – Portfolio – Vanguard Wellesley® Income Admiral™ | Morningstar
Risk Parity Chronicles: Risk Parity Chronicles
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In this episode we answer emails from William, Tyler and Builderman. We discuss making changes in treasury bond fund allocations and the foibles of interest rate crystal balls, using the Portfolio Visualizer Monte Carlo simulator to model Golden Ratio style portfolios and musings about Iowa farmland and other family dynasty-type investments. And we Fight, Fight, Fight for Iowa. Errata: I said "Large Cap Value" in the answer to Tyler's question when I meant "Large Cap Growth." Doh!
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Tyler's Golden Ratio Portfolio Analysis (Tickers): Monte Carlo Simulation (portfoliovisualizer.com)
Tyler's Golden Ratio Portfolio Analysis (Asset Classes): Monte Carlo Simulation (portfoliovisualizer.com)
Golden Ratio Portfolio Analysis (Longer-Term Asset Classes): Monte Carlo Simulation (portfoliovisualizer.com)
Interview with Anthony Deden: Modern-Day Asset Management Business w/ Anthony Deden - YouTube
Risk Parity Chronicles: Risk Parity Chronicles
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In this episode we answer emails from Alexi (a/k/a "the Dude"), MyContactInfo and James. We discuss a couple new ETFs, CAOS and AHLT, follow up on earlier discussions about retirement calculators and investing in long term treasury bonds (VGLT and EDV).
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
CAOS on Morningstar: CAOS – Alpha Architect Tail Risk ETF – ETF Stock Quote | Morningstar
Khan Academy link -- Geometric Sums: Finite geometric series word problem: mortgage (video) | Khan Academy
Risk Parity Chronicles Article on Long Treasuries: The Long Bond Apocalypse (riskparitychronicles.com)
Yours Truly on "Catching Up to FI": 044 | Sponge Bob and Drawdown Strategies | Frank Vasquez - YouTube
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In this episode we answer emails from Mark, Mark and Cody. We discuss what first Mark learned by investigating JEPI, the history of investing in gold over the past 100 years and how that may affect the data, and potential data limitations in Portfolio Visualizer on very long Monte Carlo simulations.
Bonus Links:
The Mysterious London Gold Pool: London Gold Pool - Wikipedia
Gold Mining Shares In the Great Depression: Gold Stocks Were Financial Saviors During The 1930s | Gold Eagle (gold-eagle.com)
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In this episode we answer questions from BuilderMan, Drew and MyContactInfo. We discuss how to incorporate farmland and other illiquid, income-producing assets in retirement expense planning, the perilous process of trying to manage a portfolio based on expert picks -- here, Ray Dalio -- and why venture capital may not be so smart.
And then we discuss the new Risk Parity Chronicles Monthly Roundup and a rebalancing of the Accelerated Permanent Portfolio sample portfolio.
And we sing the Iowa Corn Song!
Links:
Gladstone LAND ETF: LAND - Gladstone Land Corp Chart - NASDAQ | Morningstar
Ray Dalio Article About Cash: (24) The Thinking Behind Why Cash Is Now Good (and not Trash) | LinkedIn
Aswath Damodaran Blog Article on Venture Capital: Musings on Markets: Putting the (Insta)cart before the (Grocery) horse: A COVID Favorite's Reality Check! (aswathdamodaran.blogspot.com)
Risk Parity Chronicles Risk Parity Roundup: Risk Parity Roundup: October 2023 (riskparitychronicles.com)
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In this episode we answer questions from Jeff, Geordi and Eames. We discuss wrangling with a Fidelity advisors and assorted salespeople, the difference between naïve or static portfolio construction versus using crystal balls for that purpose, a modified Golden Ratio-style portfolio, the pitfalls of buy-write funds like JEPI and BALI and a small issue with the website.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
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In this episode we answer emails from MyContactInfo, Kyle and Eric. We discuss the pitfalls of retirement tools with help from Newman, Bob Ross and a contribution question and our old semi-nemesis, TIPS.
Link:
Bill Bernstein TIPS Ladder Article: Riskless at Age 104 - Articles - Advisor Perspectives
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In this episode we answer emails from Dave and Kanembou (from Chad). We discuss the ins and outs of various data sets (as opposed to crystal balls), choosing a portfolio based on aggressiveness or conservativeness, related safe withdrawal rate issues and Donor Advised Funds.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Portfolio Charts Portfolio Matrix Tool: PORTFOLIO MATRIX – Portfolio Charts
Early Retirement Now Toolbox: An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement Now
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In this jam-packed episode we answer questions from Luke, Ethan, and Garry. We discuss a modified Golden Butterfly portfolio, some meta-withdrawal strategy ideas and concepts, a process for deciding what to do with oneself, small-cap vs. small-cap value investments, some esoteric international tax issues and the new QQQY gambling problem fund. And throw in some Tom Waits to boot.
Links:
Portfolio Charts Portfolio Matrix Tool: PORTFOLIO MATRIX – Portfolio Charts
Five Regrets of the Dying: The Top Five Regrets of the Dying - Wikipedia
Stephen Kotler "Flow" Video -- Short Version: How to enter ‘flow state’ on command | Steven Kotler for Big Think - YouTube
Ethan's International Tax Article: Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
QQQY Summary Prospectus: Microsoft Word - qqqy_497k-091523.docx (defianceetfs.com)
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In this episode we answer an email from Jeffrey about the "4% Rule". We discuss its origins, its three parameters (portfolio construction, time frame, and withdrawal mechanism), how it works, what it means and doesn't mean, its uses and misuses and how to make adjustments to improve your own outcomes.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio. We have a rebalancing of the Levered Golden Ratio portfolio.
Additional links:
Bill Bengen's Original 1994 Safe Withdrawal Rate Paper: FPA Journal - The Best of 25 Years: Determining Withdrawal Rates Using Historical Data (financialplanningassociation.org)
2022 Morningstar Report on Withdrawal Strategies: Six Retirement Withdrawal Strategies that Stretch Savings | Morningstar
Risk Savvy Video Lecture: Risk Savvy: How to Make Good Decisions - YouTube
Bias-Variance Dilemma Dartboard Explanation (also listen to Episode 49 of this podcast): WTF is the Bias-Variance Tradeoff? (Infographic) (elitedatascience.com)
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In this episode we answer emails from Brown, Justin, MyContactInfo and an Anonymous Trending Value Investor. We discuss investing in baskets of property & casualty insurance companies for effective diversification, what's happening at Risk Parity Chronicles, general thoughts about brokerages for DIY investors and an assortment of leveraged momentum-based strategies.
Links:
Walk4McKenna: Walk4McKenna - Father McKenna Center
KBWP Portfolio: KBWP – Portfolio – Invesco KBW Property & Casualty Ins ETF | Morningstar
Portfolio Visualizer of KBWP vs. Direct Indexes: https://tinyurl.com/4sfh3s49
Risk Parity Chronicles: Risk Parity Chronicles
AVGV Article: AVGV ETF Review - Avantis All Equity Markets Value ETF (optimizedportfolio.com)
Swedroe Article on Diversification: How to think differently about diversification | TEBI (evidenceinvestor.com)
Anonymous Factor Regression Analysis: https://tinyurl.com/2vymptuz
Anonymous Portfolio Analysis: https://tinyurl.com/yzcwazdy
Trending Value Blog Post: 100% Factor Focused Equities vs Diversification Reigns Supreme (pictureperfectportfolios.com)
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In this episode we answer emails from Owen, Jeff and Will. We discuss the commonly believed misinformation about TIPS, the ins and outs of quality dogs and investing principles, and talk about backtesting data and how it is used and misused.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio. We have a rebalancing of the Levered Golden Ratio portfolio.
Additional links:
Bloomberg Presentation on How Various Assets Perform in Inflationary Environments: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)
Market Huddle Video discussing Bloomberg Presentation: To Survive Disasters, You Need Smiles (guest: Steve Hou) - Market Huddle Ep.201 - YouTube
Risk Parity Chronicles series on TIPS: Eight Observations About TIPS (riskparitychronicles.com)
Bill Bernstein TIPS Ladder Article: Riskless at Age 104 - Articles - Advisor Perspectives
Walk4McKenna: Walk4McKenna - Father McKenna Center
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In this episode we answer emails from Graham, Hydromod and Katie. We discuss a couple new funds from Avantis, AVGE and AVGV, and creating a portfolio with those and RSBT, Hydromod's Okay Adventure portfolio management techniques with a levered risk parity style portfolio, and Katie's questions about buying a house with her partner. And we make fun of our children, Squidward and Patrick.
Links:
Walk4McKenna: Walk4McKenna - Father McKenna Center
AVGE Fund Review: AVGE ETF Review - Avantis All Equity Markets ETF (optimizedportfolio.com)
ADGV Fund Review: AVGV ETF Review - Avantis All Equity Markets Value ETF (optimizedportfolio.com)
Hydromod Link #1: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs] - Bogleheads.org
Hydromod Link #2: Refinements to Hedgefundie's excellent approach - Bogleheads.org
Hydromod LInk #3: Hydromod's Okay Adventure: Leverage, Momentum, and Risk Management - Bogleheads.org
Hydromod Portfolio Visualizer Link: Test Tactical Allocation Models (portfoliovisualizer.com)
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In this episode we answer emails from Justin of Risk Parity Chronicles and Chris. We discuss Justin's new blogpost and a new fund that mixes stocks and managed futures, RSST, and follow up on Episode 288 with some useful references from Chris.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio. We have a rebalancing of the Levered Golden Ratio portfolio.
Additional links:
Justin's Blog Post: Quick Musings on RSST (riskparitychronicles.com)
Corey Hoffstein's Return Stacked Portfolio: Show Us Your Portfolio: Corey Hoffstein - YouTube
Andrew Beer Interview on Forward Guidance: How Hedge Funds Take Too Much Of Investors' Money (Way Too Much) | Andrew Beer - YouTube
Wikipedia Article about Modern Portfolio Theory: Modern portfolio theory - Wikipedia
MIT Opencourseware for Finance and MPT: Ses 14: Portfolio Theory II - YouTube
Khan Academy Video on Normal Distributions: Introduction to the normal distribution | Probability and Statistics | Khan Academy - YouTube
Normal Distribution Calculator: Normal Distribution Applet/Calculator (uiowa.edu)
Walk4McKenna: Walk4McKenna - Father McKenna Center
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In this episode we respond to emails from Matt, MyContactInfo, Alexi (a/k/a "Dude") and Sharon. We follow up on Matt's email from Episode 286, talk more about using Portfolio Visualizer and safe and perpetual withdrawal rates, Allan Roth's critique of Wade Pfau's analysis and article and related issues, and individual bonds vs. bond funds.
Links:
Matt's Current Portfolio Monte Carlo Sim: Monte Carlo Simulation (portfoliovisualizer.com)
Similar Allocation Monte Carlo Sim: https://tinyurl.com/2p8twtdp
Golden Butterfly Monte Carlo Sim: https://tinyurl.com/54c9b68x
Modified Golden Ratio Monte Carlo Sim: https://tinyurl.com/4pca2sdh
AQR Paper on Trend Following: A Century of Evidence on Trend-Following Investing (aqr.com)
Retirement & IRA show (Episode EDU #2334): Reexamining The Fun Number, MDF and Secure Income: EDU #2334 - The Retirement and IRA Show
Advisor Perspectives Article #1: Are Fixed Indexed Annuities More Efficient Than Bonds? - Articles - Advisor Perspectives
Advisor Perspectives Article #2: Challenging Morningstar’s Safe Withdrawal Rates - Articles - Advisor Perspectives
Wealth of Common Sense Article re Epidemic of Over-saving: You Probably Need Less Money Than You Think For Retirement - A Wealth of Common Sense
Wealth of Common Sense Article re Bonds vs. Bond Funds: Owning Individual Bonds vs. Owning a Bond Fund - A Wealth of Common Sense
Walk4McKenna: Walk4McKenna - Father McKenna Center
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In this episode we answer a loooooong email from Kevin. We discuss how to use backtesting and Monte Carlo simulations and how they related to safe and perpetual withdrawal rates, classic and modified Risk Parity-style portfolios, assorted variables and metrics, sizing allocations, Kevin's overall portfolio. And conclude with Monty Python and Kevin singing.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Early Retirement Now Toolbox with Over 100 Years of Data: An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement Now
Ray Dalio Holy Grail Principle Video: Ray Dalio breaks down his "Holy Grail" - YouTube
Michael Kitces Risk Parity Article: Microsoft Word - Kitces Report November-December 2013 - RISK PARITY - FINAL
Bill Bernstein TIPS Ladder Article: Riskless at Age 104 - Articles - Advisor Perspectives
Wealth of Common Sense Article re the Epidemic of Over-saving: You Probably Need Less Money Than You Think For Retirement - A Wealth of Common Sense
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In this episode we answer emails from Chas, MyContactInfo and JDM. We discuss momentum-based funds and strategies (see also Episodes 218, 231 and 234), the inherent difficulties of trying to use GDP and other macro-economic data to make investing decisions and the basics of implementing a Golden Butterfly portfolio.
Links:
AQR Article -- Fama on Momentum: Fama on Momentum (aqr.com)
Interview of Professor Fama: INVESTORS FROM THE MOON: FAMA (top1000funds.com)
Chas' Asset Correlation Analysis: Asset Correlations (portfoliovisualizer.com)
VIOV vs. XSVM vs. DFSVX: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Swedroe Article re GDP and Emerging Markets: Is there a link between GDP growth and emerging market returns? | TEBI (evidenceinvestor.com)
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In this episode we answer emails from Kyle, Blake and Matt. We discuss investing in a 457 plan with a self-directed option, Blake's gambling problem -- err, very interesting leveraged portfolio, and how to evaluate RIAs through their SEC filings as applied to Lido.
Links:
Analysis of Total Market vs. 60/20/20 vs. Large cap/small cap value portfolios: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Michael Kitces article re Four Phases of Retirement Planning: The Four Phases Of Saving For Retirement (kitces.com)
Lido Firm Brochure (Part 2A of SEC Form ADV): crd_iapd_Brochure.aspx (sec.gov)
OASDX: OASDX – Oakhurst Strategic Defined Risk Instl Fund Stock Price | Morningstar
Walk4McKenna: Walk4McKenna - Father McKenna Center
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In this episode we answer emails from Chas, Keith and Fritz. We discuss the new Asset Camp tool offered by David Stein, basic issues of leverage (listen also Episodes 258 and 259) and the recent performance of long term treasury bonds.
Links:
Asset Camp: Asset Camp - Asset Camp
Ben Carlson blog post: Everything & Everyone Underperforms Eventually - A Wealth of Common Sense
Rational Reminder video about leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
Optimized Portfolios -- Beating the market with leverage: How To Beat the Market Using Leverage and Index Investing (optimizedportfolio.com)
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In this episode we answer emails from Jimmy, John and MyContactInfo. We discuss the foibles of trying to make investment decisions based on news, politics or macro-economic events, Joel Greenblatt's investment methodologies re value-weighting from 2010 and where there are today, and learn some more from Professor Aswath Damodaran about why you cannot use market valuation metrics and P/E ratios as a basis for decision-making in investing.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Truflation -- Realtime Inflation Data: Independent, economic & financial data in real time on-chain (truflation.com)
Daniela Di Martino Video re Jay Powell and Truflation: Ted Oakley and DiMartino Booth on Fed policy, employment implications, and debt implications - YouTube
Hugh Hendry and Jim Bianco debating Interest Rates and Inflation: Macro Musings with Jim Bianco (preview) - YouTube
Value-Weighted Indexing Site (circa 2011): Value Weighted Index – A New Approach to Long-Term Investing
Gotham Funds (Greenblatt Managed): Home Page : Gotham (gothamfunds.com)
Portfolio Visualizer Backtest of GVALX: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Professor Damodaran's Latest And Greatest: Musings on Markets: The Price of Risk: With Equity Risk Premiums, Caveat Emptor! (aswathdamodaran.blogspot.com)
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In this episode we answer emails from Mark, Wesley and Tom. We make fun of the host and talk about his personality traits and the Big Five personality test, Wesley's portfolio and the new managed futures fund, CTA, and a question about the historical performance about stocks in Great Britain.
Links:
Revisionist History Podcast re Cliff Asness and Disagreeableness: Malcolm Gladwell's 12 Rules for Life | Revisionist History | Malcolm Gladwell - YouTube
Big Five Personality Test: Free open-source BigFive personality traits test - Big Five (bigfive-test.com)
Wesley's Portfolio Backtest: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Meb Faber Podcast with Animal Spirits Guys re Managed Futures for Diversification: Episode #493: Michael Batnick & Ben Carlson - What’s Your Favorite Diversifier? PLUS: Future Proof! - Meb Faber Research - Stock Market and Investing Blog
CTA ETF page: CTA Simplify Managed Futures Strategy ETF | Simplify
KMLM ETF page: KFA Mount Lucas Managed Futures Index Strategy ETF | KMLM (kfafunds.com)
FRED Data re U.K. Stock Market History: How has the U.K. stock market fared lo these past 300 years? | FRED Blog (stlouisfed.org)
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In this episode we answer emails from Kevin, Philip and Brown. We discuss (and thank) our generous listeners, our three principles -- Simplicity, Macro-allocation and Holy Grail -- and why they need to work together, using conservative portfolios for accumulation, investing in international funds in a sensible manner to maximize diversification and international currency risks, investing in utilities funds (listen also Episode 27) and property & casualty insurance companies. Whew!
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Main Donation Page: Donate - Father McKenna Center
Walk4McKenna: Walk4McKenna - Father McKenna Center
Holy Grail Principle Video: Ray Dalio breaks down his "Holy Grail" - YouTube
Portfolio Visualizer Backtest of Utilities vs. REITs vs. P&C Insurance: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we answer emails from Jeff, Micah and Chris. We discuss some data anomalies of Portfolio Visualizer pertaining to REITs, how to interpret and use Monte Carlo simulations, a more aggressive variation of the Golden Butterfly portfolio (similar to the Weird Portfolio) and the recent performance of the Golden Butterfly portfolio itself.
Links:
Portfolio Visualizer REIT Data: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Micah's Alaskan Golden Butterfly Portfolio: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
The Weird Portfolio: Weird Portfolio – Portfolio Charts
Portfolio Charts Risk-Return Comparison Analyzer of Your Portfolio vs. 19 Others: RISK AND RETURN – Portfolio Charts
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In this episode we answer an email from Judy. We discuss a 2013 Michael Kitces article about risk parity, which aspects we have incorporated and which we have not (and why), and then talk about an interview of William Bernstein about his new book and some related thoughts and ramifications about bonds, crystal balls, annuities and other things. (Note: I think I said it was the 4th edition, but its really just the 2d.)
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
2013 Michael Kitces Risk Parity Article: Microsoft Word - Kitces Report November-December 2013 - RISK PARITY - FINAL
Morningstar Long View Interview of William Bernstein: Bill Bernstein: Revisiting The Four Pillars of Investing | Morningstar
Morningstar Long View Interview of Aswath Damodaran: Aswath Damodaran: A Valuation Expert’s Take on Inflation, Stock Buybacks, ESG, and More | Morningstar
Factor Investing Book: Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today by Andrew L Berkin | Goodreads
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In this episode we open up Season Four by answering emails from Pete, Arnold and Igor. We discuss Pete's slightly levered Golden Ratio type portfolio, TJUL and buffered funds generally and a Portfolio Visualizer anomaly. It's Shplendid!
Links:
Optimized Portfolio Article re UPRO and other leveraged ETFs: The 9 Best Leveraged ETFs To Enhance Portfolio Exposure (2023) (optimizedportfolio.com)
EDV and ZROX Comparison: ZROZ vs. EDV ETF Comparison Analysis | etf.com
Perfect Portfolio Book: In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest by Andrew W. Lo | Goodreads
Barry Ritholtz Article re TJUL: My New ETF: 100% of Upside + 0% of Downside - The Big Picture (ritholtz.com)
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In this episode we close out Season Three with a discussion of the annual rebalancings we performed last week on four of the Sample Portfolios -- the All Seasons, the Golden Butterfly, the Golden Ratio and the Risk Parity Ultimate.
It's nitty and its gritty.
Link to Portfolios Page: Portfolios | Risk Parity Radio
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In this episode we answer emails from MyContactInfo and Stanley. We discuss a podcast interview of Professor Jean-Phillipe Bouchaud about methods of analyzing complex systems and financial markets and compare investments in small cap blend and small cap value funds.
Links:
Rick Bookstaber podcast interview of Professor Jean-Phillipe Bouchaud: Seeking Risk: The Fab Rick Show: The Science of Risk (libsyn.com)
The Origin of Wealth book: Amazon.com: The Origin of Wealth: The Radical Remaking of Economics and What it Means for Business and Society: 9781422121030: Beinhocker, Eric D.: Books
Random Matrix Analysis: Random matrix - Wikipedia
Dragon Kings Article: Dragon king theory - Wikipedia
Portfolio Visualizer Analysis of Small Cap Blend vs. Small Cap Value: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
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In this episode we answer an email from Marcy. We discuss the modern and extended histories of the FIRE movement, FIRE movements and FIRE literature of the past from the 19th Century and beyond, the parallels of modern portfolio mistakes with those of FIRE circa 1990, and do a case study of Marcy's FIRE goals and portfolio using Portfolio Visualizer. (Errata -- I said "21%" for two allocations in the third portfolio when I meant 26%.)
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Local TV News Story on Father McKenna Center: Father McKenna Center seeks men’s clothing donations in DC – NBC4 Washington (nbcwashington.com)
My 2016 Essay about FIRE: Prospecting Mimetic Fractals - Prospecting Mimetic Fractals
Quiet Life video: In Praise of The Quiet Life - YouTube
Ramit Sethi video with the Jensens: “We achieved FIRE with $4.3M. Why can’t we enjoy it?” | IWT 108 | Ramit Sethi - YouTube
Ramit Sethi with the Mad Fientist: Ramit Sethi – How to Spend (and Actually Enjoy It) - YouTube
Mad Fientist Blog Post re Ways to Spend More Money: The Problem with the 4% Rule (and Why You Could Retire Even Sooner) (madfientist.com)
Terhorst's Blog: Welcome to Paul and Vicki Terhorst’s Perpetual Travel Blog – Paul and Vicki Terhorst’s Perpetual Travel Blog (wordpress.com)
Portfolio Visualizer Analysis of Marcy's Proposed Retirement Portfolio: https://tinyurl.com/bdnmmubh
PV Analysis of RPR Alternative No. 1 (Golden Butterfly): https://tinyurl.com/bd5dtndd
PV Analysis of RPR Alternative No. 2 (Golden Ratio): https://tinyurl.com/9fkjx5b9
Portfolio Charts Calculators: Charts – Portfolio Charts
Recent Interview of Gwen Merz: Navigating Career Transitions: Gwen Merz's Inspiring Journey from Corporate Success to Entrepreneur — Earn & Invest (earnandinvest.com)
Diania Merriam: Diania Merriam: Who the hell am I? - YouTube
Rose Lounsbury Site: Home - Rose Lounsbury
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In this episode we answer questions from Esek and Jeffrey. We discuss the difficulties of assessing long term care needs and potential approaches and how RP portfolios differ and are similar to other approaches, such as buffered stock funds.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Portfolio Charts Heat Map Calculator: HEAT MAP – Portfolio Charts
Larry Swedroe Discussing His Personal Portfolio Involving 50% Alternative Assets: Show Us Your Portfolio: Larry Swedroe - YouTube
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In this episode we answer questions from Shplendid Spencer, Russel and MyContactInfo. We discuss the pros and cons of online calculators and how they are commonly inadequate and/or misused, why being conservative beyond realistic possibilities is probably not a good idea overall, and an article by Aswath Damodaran about Nvidia, the chip industry and the implications of AI for DIY investing.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Spencer's Tool Link: Rich, Broke or Dead? Post-Retirement FIRE Calculator: Visualizing Early Retirement Success and Longevity Risk - Engaging Data (engaging-data.com)
Similar Portfolio Visualizer Analysis Tool: Asset Liability Modeling (portfoliovisualizer.com)
Tyler on Security Analysis Podcast: Tyler (@PortfolioCharts): The Amazing Power of Uncorrelated Assets (securityanalysis.org)
Portfolio Charts Heat Map Tool: HEAT MAP – Portfolio Charts
Article on The Top Five Regrets of the Dying: The Top Five Regrets of the Dying - Wikipedia
List of Cognitive Biases: The Prospecting Lens - Prospecting Mimetic Fractals
Aswath Damodaran Article: Musings on Markets: AI's Winners, Losers and Wannabes: An NVIDIA Valuation, with the AI Boost! (aswathdamodaran.blogspot.com)
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In this episode we answer emails from Alexi (a/k/a "the Dude"), MyContactInfo and Brown. We discuss passing 500,000 downloads, hi and jinks, the relationship between returns, the projected safe withdrawal rate and the Holy Grail principle, and using Berkshire Hathaway as a basis for portfolio construction.
Links:
Value Stock Geek with Your Truly: The Security Analysis Podcast: Frank Vasquez - Risk Parity Investing for the DIY Investor on Apple Podcasts
The All Weather Strategy Paper: Bridgewater Paper 2009.12 AW Info Pack.doc (granicus.com)
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In this episode we answer emails from Thurston Howell VI, MyContactInfo and Keith. We discuss DBMF and managed futures funds generally, my family's rapture with the sport of rowing and how to make basic asset location decisions to minimize taxes.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Barry Ritholtz Interview of Andrew Beer (DBMF) (2021): Andrew Beer on the Hedge Fund Industry (Podcast) - Masters in Business - Omny.fm
DBMF Web Page: iMGP DBi Managed Futures Strategy ETF | iMGP Funds
DBMF Current Holdings Link (download): https://partnerselectfunds.com/wp-content/uploads/Holdings/DBMF-Holdings.xlsx
Taxation of Gold -- CNBC Article with links: Gold, silver ETF owners face 28% top tax rate on capital gains (cnbc.com)
Asset Swap Tutorial from Justin/Risk Parity Chronicles: How to Do an Asset Swap - YouTube
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In this episode we answer questions from Pedro, Graham and Nathan. We discuss creating a Golden Ratio portfolio out of ITOT and other things, what to do about bond fund choices in a TSP and the ins and outs of the VCSAX Consumer Staples Fund.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
TSP F Fund Page: F Fund | The Thrift Savings Plan (TSP)
ITOT Analysis: ITOT – Portfolio – iShares Core S&P Total US Stock Mkt ETF | Morningstar
Optimal Finance Daily Podcast: Optimal Finance Daily - Personal Finance Podcast (oldpodcast.com)
Diania Merriam Interview: Video How 1 woman went from having debt to retiring in 5 years - ABC News (go.com)
VCSAX Analysis: VCSAX – Portfolio – Vanguard Consumer Staples Index Admiral | Morningstar
Portfolio Visualizer Analysis of Consumer Staples Fund vs. 80/20 vs. 50/50: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we answer questions from MyContactInfo, Anonymous and Arun. We discuss a podcast and article about the concept of Ergodicity and how to apply it, a variation of the Golden Ratio portfolio from one of our listeners recently discussed in an interview, and the illusory benefits of dividend-paying stocks and related delusions.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
EconTalk Podcast on Ergodicity: Luca Dellanna on Risk, Ruin, and Ergodicity | EconTalk
Taylor Pearson Article on Ergodicity: Ergodicity: A Simple Explanation of Ergodic vs. Non-Ergodic (taylorpearson.me)
Picture Perfect Portfolios Article about a Golden Ratio-style portfolio and others: 100% Factor Focused Equities vs Diversification Reigns Supreme (pictureperfectportfolios.com)
Three Ben Felix Videos About the Irrelevance of Dividends:
The Irrelevance of Dividends - YouTube
The Relevance of Dividend Irrelevance - YouTube
Dividend Growth Investing - YouTube
Intel's 2023 Dividend Cut:
Intel cuts dividend to lowest since 2007 to save cash | Reuters
Intel slashes dividend by over 65%, to 12.5 cents (cnbc.com)
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In this episode we answer emails from Drew, Barry and Rob. We discuss an article about investing in gold from Larry Swedroe and how to read it and the articles cited therein correctly, transitioning from a 60/40 portfolio to a risk-parity style portfolio and taking distributions and how to evaluate a pension vs. a lump sum. Groovy, Baby!
Links:
Swedroe Article: Misguided Investor Expectations on the Risk and Returns of Gold | Wealth Management
"The Golden Dilemma" Paper: delivery.php (ssrn.com)
"The Golden Rule of Investing" Paper: delivery.php (ssrn.com)
Portfolio Visualizer Correlation Analysis of Swedroe suggestions and gold: Asset Correlations (portfoliovisualizer.com)
YouTube Interview of Corey Hoffstein about rebalancing timing: Keeping it Simple Ep. 21: Do I Feel Lucky? | Simplify
Immediate Annuities Calculator/Free Quotes: Get Your Best Annuity Quote Instantly Online! Without any sales calls. Your phone# is not required. — ImmediateAnnuities.com
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In this episode we answer emails from Jennie, Chris and Visitor 5622. We discuss Jennie's retirement situation, BTAL and long dollar funds, and VTI musings.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Value Stock Geek with Your Truly: The Security Analysis Podcast: Frank Vasquez - Risk Parity Investing for the DIY Investor on Apple Podcasts
Portfolio Visualizer Financial Goals Sequencer: Financial Goals (portfoliovisualizer.com)
BTAL Web Page: AGF U.S. Market Neutral Anti-Beta Fund | AGF.com
Morningstar Analysis of VTI: VTI – Portfolio – Vanguard Total Stock Market ETF | Morningstar
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In this episode we begin with a mini-rant about the THREE free steak dinner invitations we received recently. Then we answer emails from Drew, Lauren and Joe. We go over a number of useful links and information about managed futures from Drew following up on Episode 265, talk about Emerson and Jeopardy, and what to do when you reach Financial Independence early at age 39.
Links:
Charlie Munger Misjudgment Speech: The Psychology of Human Misjudgment - Charlie Munger Full Speech - YouTube
TLDL Shorter Animated Version: Charlie Munger - 24 Standard Causes of Human Misjudgment in 15 minutes - YouTube
Alpha Architect QVAL Fund Page: QVAL - Alpha Architect ETFs
AQR's AQMIX Fund Page: AQR Managed Futures Strategy Fund - AQMIX
Societe Generale CTA Indices Page: Prime Services (Newedge) Indices (societegenerale.com)
Art of Manliness Podcast About Emerson: Podcast #904: How Emerson Can Help You Become a Stoic Nonconformist | The Art of Manliness
Value Stock Geek Security Analysis Website: Security Analysis | Value Stock Geek | Substack
Weird Portfolio Page At Portfolio Charts: Weird Portfolio – Portfolio Charts
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In this episode we answer emails from Alexi (a/k/a/ "the Dude"), Pete and Dean. We discuss box spreads, trying to market-time t-bills and interest rates, a whole host of logical fallacies and cognitive biases and a variable preferred shares fund (VRP) and what it does and doesn't do.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Alpha Architect On Box Spreads: Box Spreads: An Alternative to Treasury Bills? (alphaarchitect.com)
Alpha Architect Paper On Size And Value Tilts: AA-JBISFactorInvesting22LongOnlyValueInvesting.pdf (alphaarchitect.com)
You Are Not So Smart Fallacy Podcasts (check out ones in the 60s or word search "fallacy"): Podcast – You Are Not So Smart
Sample Gerd Gigerenzer Lecture: Risk literacy: Gerd Gigerenzer at TEDxZurich - YouTube
Risk Savvy book: Risk Savvy: How to Make Good Decisions by Gerd Gigerenzer | Goodreads
Summary of Prospecting Theory and Cognitive Biases: The Prospecting Lens - Prospecting Mimetic Fractals
Dan Ariely Books: Books - Dan Ariely
Freakonomics Episode On Slippery Slopes: Enough with the Slippery Slopes! - Freakonomics
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In this episode we answer emails from George, Danny, and Jamie. We discuss short-term asset allocations and considerations thereabouts, expense-tracking methodologies (led by Sister Stigmata), and manager-run managed futures funds versus replication-based funds.
Links:
QMHNX Page: AQR Managed Futures Strategy HV Fund - QMHNX
Podcast Debate about Managed Futures Funds: 246 Systematic Investor Series ft. Andrew Beer & Tim Pickering – June 3rd, 2023 | Top Traders Unplugged
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In this episode we answer emails from Thirsty Horse, Alexi (a/k/a "the Dude") and Mark. We discuss our charity, assorted Monte Carlo simulations on Portfolio Visualizer and data sources, rebalancing of leveraged portfolios and the choice of leverage (follow up on Episode 259), Flight of the Conchords, and the pitfalls of trying to use valuation metrics as crystal balls.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Become a Patron and Support our Charity: Risk Parity Radio | creating A Podcast | Patreon
Monte Carlo Analysis of basic Golden Ratio portfolio back to 1994: https://tinyurl.com/mswkra9c
Monte Carlo Analysis of Golden Ratio portfolio back to the 1970s: https://tinyurl.com/hzd6xftt
Portfolio Charts Retirement Spending Calculator: RETIREMENT SPENDING – Portfolio Charts
Michael Kitces Optimized Rebalancing Articles: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Aswath Damodaran on Long View Podcast: Aswath Damodaran: A Valuation Expert’s Take on Inflation, Stock Buybacks, ESG, and More | Morningstar
Aswath Damodaran/Equity Risk Premium: Damodaran On-line Home Page (nyu.edu)
Errant 2013 Paper re 4% Rule: delivery.php (ssrn.com)
Kitces CAPE Ratio Article 2014: Shiller PE: Bad Market Timing, Good Retirement Planning (kitces.com)
Kitces CAPE Ratio Article 2016: Reducing Retirement Return Assumptions For High Valuation? (kitces.com)
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In this episode we answer emails from R.J., Mark and Jaako. We discuss how amateur investors doing projections often double-count inflation accidently and apply inappropriate tax rates, using low-beta funds in portfolio construction, and ETFs designed to combat inflation in Finland and elsewhere.
Note I misspoke and the USMV low-beta portfolio does better than the two created in Mark's backtests.
Links:
Value Stock Geek's Podcast Interview of Tyler from Portfolio Charts: Tyler (@PortfolioCharts): The Amazing Power of Uncorrelated Assets (securityanalysis.org)
Portfolio Visualizer Monte Carlo Simulator: Monte Carlo Simulation (portfoliovisualizer.com)
Rational Reminder Interview of Professor Campbell: Prof. John Y. Campbell: Financial Decisions for Long-term Investors | Rational Reminder 250 - YouTube
Analysis of Low Beta Portfolios: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Mark's Correlation Analysis: Asset Correlations (portfoliovisualizer.com)
Fund Page for Jaako's Fund: Lyxor EUR 2-10Y Inflation Expectations UCITS ETF - Acc | LYX0U6 | LU1390062245 (justetf.com)
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In this episode we answer emails from Bruce, Raymond and Alexi (a/k/a "Dude"). We discuss what we learned from last year about the performance of various assets in a severely rising interest environment, holding a conservative portfolio in accumulation to sleep better and one of the Dude's gambling experiments involving UDOW and TQQQ.
Links:
Updated UNC Paper re Bonds, Flights to Safety and Stock Market Volatility: SSRN-id1436124.pdf
Portfolio Charts Time to Financial Independence Calculator: FINANCIAL INDEPENDENCE – Portfolio Charts
Alexi's UDOW/TQQQ Analysis: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Long Term Analysis of Total Market vs. 50/50 Large Cap Growth/Value: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
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In this episode we answer emails from MyContactInfo, Mark, Kasey and Eric. We discuss a Kitces article about managing capital gains tax brackets, some of Mark's favorite episodes -- 208 on ideas for beginning investors and 209 about common safe-withdrawal-rate hysterias, Big ERNs' blog post on personal inflation rates and my response on his site, and the problems of substituting mental accounting about buckets and other things with actual strategies.
Links:
Michael Kitces Article: The Tax Impact Of The Long-Term Capital Gains Bump Zone (kitces.com)
Early Retirement Now Blog Post: Accounting for Homeownership in (Early) Retirement– SWR Series Part 57 – Early Retirement Now
2022 Morningstar Report on Withdrawal Strategies: Six Retirement Withdrawal Strategies that Stretch Savings | Morningstar
Earn & Invest Interview of Christine Benz about the Morningstar Report: Are Safe Withdrawal Debates Ridiculous — Earn & Invest (earnandinvest.com)
Ben Carlson Post on the inherent Mental Accounting of Bucket Strategies: The Mental Accounting of Asset Allocation - A Wealth of Common Sense
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In this episode we answer emails from Drew, Carlos and Eric. We discuss the UPAR and RPAR risk parity ETFs and their construction, rant a bit about TIPS, discuss attractive narratives about de-dollarization in the context of cognitive biases (the possibility effect and ignoring base rates) and how our adult children use a Golden Ratio-style portfolio to save for intermediate goals.
Links:
Father McKenna Center donation page: Donate - Father McKenna Center
UPAR webpage: UPAR Risk Parity ETF (rparetf.com)
Michael Kitces interview: Michael Kitces: How Higher Yields Affect Asset Allocation and Retirement Planning | The Long View (simplecast.com)
De-dollarization article: De-dollarization Has Begun. | AIER
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In this episode we answer emails from Eric (x2), Ron and Jeffrey. We discuss the EconoMe Conference, my friendship with Diania Merriam, bid/ask spreads at various brokerages, an exquisite analysis of margin leverage vs. leveraged ETFs and the gold/gold miner fund GDMN.
Links:
EconoMe Conference 2024: EconoMe Conference - March 15th-17th, 2024
Father McKenna Center Giving Page: Donate - Father McKenna Center
Ron's Leverage Analysis I: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Ron's Leverage Analysis II: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Corey Hoffstein Interview About Using Leveraged ETFs: How to Improve a 100% Stock Portfolio Using Return Stacking w/ Corey Hoffstein (theinvestorspodcast.com)
GDMN ETF webpage: Global Gold Plus Gold Miners Strategy ETF Fund| WisdomTree
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In this episode we answer emails from Bob (one of the famous Bobs), Mitchell and Davis. We discuss stable value funds vs. intermediate treasury bond funds, thinking about management issues in your 80s (and your parents), and what we have learned about leverage in portfolios since 2020.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Rational Reminder video about leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
Optimized Portfolios -- Beating the market with leverage: How To Beat the Market Using Leverage and Index Investing (optimizedportfolio.com)
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In this short but jammed-packed episode, we goof off with some of our regulars and answer emails from Brian, Alexi (a/k/a the "Dude"), MyContactInfo and Kasip. We address a variety of random musings about some new treasury bond ETFs and Simply ETFs, Flight of the Conchords humor, what AI has to say about Medicare Advantage and Medigap, and what to do as a resident alien about a 401k.
I can't make these emails up! We'll get back to our normal level of absurdity next time.
Links:
New Treasury Bond ETFs: ETFs | Invest in the US Treasury Market | US Benchmark Series (ustreasuryetf.com)
Animal Spirits Podcast re Treasury Bond ETFs: Animal Spirits Podcast: Talk Your Book: How to Buy Treasuries (libsyn.com)
Animal Spirits Podcast re Simplify ETFs: Animal Spirits Podcast: Talk Your Book: Diversify Your Diversifiers (libsyn.com)
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In this episode we answer emails from Lauren, Paul and MyContactInfo. We discuss Emerson and Thoreau and how we apply their teachings, comparing risk parity style portfolios with others using Portfolio Charts, and an article about Bill Bernstein's new bond ladder and how it fits in.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Self Reliance by Emerson: Self Reliance by Ralph Waldo Emerson (Full Text) (thefreshreads.com)
A Guide to Self Reliance: Self-Reliance: Change Your Life For The Better - Ralph Waldo Emerson (emersoncentral.com)
Parable of the Ham: The Parable of the Ham – Results Typical
Golden Butterfly Portfolio Particulars: Golden Butterfly – Portfolio Charts
60/40 Portfolio Particulars: Classic 60-40 – Portfolio Charts
Three-Fund Portfolio Particulars: Three-Fund Portfolio – Portfolio Charts
Risk-Reward Comparisons of Common Portfolios: RISK AND RETURN – Portfolio Charts
2022 Comparisons of Common Portfolios: Learning the Hard Way: 2022 Portfolio Rankings – Portfolio Charts
Bill Bernstein Article about his new Bond Ladder: Riskless at Age 104 - Articles - Advisor Perspectives
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In this episode we answer emails from Javier, Adam, and Jeff. We discuss what to do with limited 401k options and the Macro Allocation Principle, revisit an academic article we discussed in Episode 251 with some additional critical thinking skills, and talk some about Corey Hoffstein's return stacking, developments in leveraged fund and the Pimco StocksPlus family.
Links:
Rational Reminder Video re Using Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
RSBT Fund Page: Bonds Managed Futures - Return Stacked ETF (returnstackedetfs.com)
Lots of Articles About Leveraged ETFs: Leverage | Optimized Portfolio
Morningstar Analysis of Pimco StocksPlus: PSTKX – PIMCO StocksPLUS® Instl Fund Stock Price | Morningstar
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In this episode we answer emails from Javier, Heath and Joao. We discuss Simplify's short VIX ETF, "SVOL", and the difficulties of investing in volatility, the anomalous circumstances of 2022 and how it affected treasury bonds, and a bit about taxation in Brazil (about which I really know nothing).
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional link:
Simplify's SVOL ETF: SVOL Simplify Volatility Premium ETF | Simplify
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In this episode we answer emails from MyContactInfo and Chris. We follow up on Episode 251 with a taxonomy of five withdrawal strategies described in an article from the CFA institute and discuss a "not really a withdrawal strategy" that is classified as a form of mental accounting and does not impact safe withdrawal rates (at least not in a positive manner). We talk about how to classify annuities, bond ladders and portfolio-based withdrawal strategies. And we thank Chris and our other charitable donors for their support.
Links:
CFA Institute Article: Retirement Income: Six Strategies | CFA Institute Enterprising Investor
Money with Katie interview of Bill Bengen: Does Early Retirement Still Work With 2023 Inflation? Featuring Bill Bengen | The Money with Katie Show
Allan Roth Article About His Bond Ladder: The 4% Rule Just Became a Whole Lot Easier - Articles - Advisor Perspectives
Allan Roth Article Complaining About Morningstar Projections: Challenging Morningstar’s Safe Withdrawal Rates - Articles - Advisor Perspectives
Father McKenna Center Donation Page: Donate - Father McKenna Center
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In this episode we answer emails from Andreas and Brad. We discuss algorithmic factor funds like AVUV vs. basic index factor funds, basic principles of portfolio construction, low volatility funds, and the rebalancing research of Corey Hoffstein.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Giving Page: Donate - Father McKenna Center
Simplify Interview of Corey Hoffstein about rebalancing: Keeping it Simple Ep. 21: Do I Feel Lucky? | Simplify
Corey Hoffstein Interview and Papers: Rebalance Timing Luck - Newfound Research (thinknewfound.com)
Corey Hoffstein Interview Regarding Personal Portfolio: Show Us Your Portfolio: Corey Hoffstein - YouTube
Corey Hoffstein Discussing the Return Stacking Strategy: Corey Hoffstein on Return Stacking - YouTube
Optimized Rebalancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
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In this episode we answer emails from Pete, MyContactInfo and Jenzo. We discuss leveraged funds, a paper about holding them longer term and optimal leverage, analyzing leveraged portfolios, meta-concepts of retirement portfolio planning and how to separate the critical components of a withdrawal strategy (the dogs) from various management techniques, labeling methods and mental accounting (the tails), and last year's scare paper about hyper-low safe withdrawal rates of poorly constructed international portfolios.
Links:
Leveraged Portfolios Article/Paper: Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs (ddnum.com)
Sample Optimized Portfolios Article: What Is a Leveraged ETF and How Do They Work? (optimizedportfolio.com)
Analysis of UPRO vs S&P: https://tinyurl.com/me4c2xj9
Analysis of TNA vs. IWM: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Analysis of TMF vs. TLT: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Portfolio Charts Risk/Reward Calculator: RISK AND RETURN – Portfolio Charts
Portfolio Visualizer Efficient Frontier Tool: Efficient Frontier (portfoliovisualizer.com)
Bond Funds vs. Bond Ladders: Owning Individual Bonds vs. Owning a Bond Fund - A Wealth of Common Sense
Low Safe Withdrawal Rate Paper: delivery.php (ssrn.com)
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In this episode we answer emails from Carmello, Trevor, Timothy and Andreas. We discuss some of the history of the gold standard and inflation, leveraged funds, portfolio reviews, short sellers and Fidelity's recent forays into risk parity.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Cross of Gold Speech Article: Cross of Gold speech - Wikipedia
Optimized Portfolios Site on Leveraged Funds: Leverage | Optimized Portfolio
Rational Reminder Video on Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
Fidelity's New Risk Parity Fund: Fidelity Risk Parity Fund (FAPSX) | Fidelity Institutional
Fidelity's Presentation on its Risk Parity Fund: Fidelity Liquid Alternative Funds Presentation | Fidelity Institutional
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In this episode we answer emails from Wesley, Mark and a different Mark. And an errant comment from his Dude-ness, Alexi. We discuss how municipal bond funds might be used in risk-parity style portfolios and how not, a couple of interesting newer financial planning calculators and the planning process I actually use instead to account for liquidity issues, asset allocations in accumulation when options are limited and the ins and outs of preferred shares funds like PFF. And then we goof off. Again.
Links:
Correlation Matrix with Municipal Bond Fund: Asset Correlations (portfoliovisualizer.com)
ETF Research Center Financial Tool: ETF Research Center (etfrc.com)
Projection Labs Financial Tool: ProjectionLab - Simulate your financial future and plan for financial independence.
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In this episode we answer two emails from Alexi (a/k/a the "Dude") and another from Barry. We discuss funds that are designed to take advantage of rising interest rates like RRH, RISR and PFIX, another Dude-constructed accumulation portfolio with leveraged funds and some portfolio construction rules of thumb, and the noisy-ness of correlation data and matrices.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
PFIX Webpage and Resources: PFIX Simplify Interest Rate Hedge ETF | Simplify
The Dude's New Portfolio Constructions compared with S&P500: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Portfolio Visualizer Correlation Tool: Asset Correlations (portfoliovisualizer.com)
Bogleheads Post about Morningstar Correlation Data: Morningstar Correlation Matrix - Bogleheads.org
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In this episode we answer emails from Clint, Jeff and Penny. We discuss brokerage firms and solvency issues, estimating expenses for long retirements and basic tax considerations in portfolio management.
Links:
Rob Berger Video About Brokerages and Solvency: What Happens to Our Investments if Schwab, Fidelity or Vanguard Collapse? - YouTube
Morningstar 2022 Retirement Report Download Page: 2022 Retirement Withdrawal Strategies Report | Morningstar
Portfolio Charts Article with Tax Loss Harvesting Pairs: Harvesting the Fall: Why I Sold All My Bonds – Portfolio Charts
Go Curry Cracker Article Re Tax Savings: Never Pay Taxes Again - Go Curry Cracker!
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In this episode we answer emails from Kevin, Graham and Boone. We discuss the risk parity ETFs, RPAR and UPAR, leveraged portfolios, alternative assets, ETFs and some of the podcasts I'm listening to these days.
Links:
RPAR webpage: RPAR Risk Parity ETF (rparetf.com)
Risk Parity Book Review: Top 10 Risk Parity Resources: #10... Shahidi (2021) (riskparitychronicles.com)
CFA Institute Manual Article: chapter-4-from-managing-multiasset-strategies-2018.pdf (callan.com)
Rational Reminder Video about Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
Sound Investing Podcast: Sound Investing on Apple Podcasts
Money With Katie Podcast: The Money with Katie Show
Money With Katie Portfolio Analysis Blogpost: How to Diversify Outside of the Total Stock Market — Millennial Money with Katie
Ramit Sethi Podcast: Podcast - I Will Teach You To Be Rich
Macro Trading Floor Podcast: The Macro Trading Floor on Apple Podcasts
Eurodollar University Podcast: General 2 — Eurodollar University
Gestalt University Podcast: Resolve's Gestalt University on Apple Podcasts
Alpha Exchange Podcast: Alpha Exchange on Apple Podcasts
Excess Returns YouTube Channel (Corey Hoffstein Episode): Show Us Your Portfolio: Corey Hoffstein - YouTube
Retirement Planning Education YouTube Channel: Retirement Planning Education - YouTube
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In this episode we answer emails from Anonymous, Jeffrey and Anderson. We discuss locations for putting gold in various accounts, rant about the physical gold racket, discuss theoretical and practical risk parity portfolios, and talk about short and long term treasuries.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Justin's Video Re Asset Swaps: How to Do an Asset Swap - YouTube
Justin's Video Re The Portfolio Visualizer Fund Factor Tool: How to Use the Fund Factor Regression Tool on Portfolio Visualizer - YouTube
Risk Parity Chronicles YouTube Channel: Risk Parity Chronicles - YouTube
CFA Institute Manual -- Risk Parity Chapter: chapter-4-from-managing-multiasset-strategies-2018.pdf (callan.com)
Early Retirement Now Article about Gold: Using Gold as a Hedge against Sequence Risk – SWR Series Part 34 – Early Retirement Now
Sonia's Crystal Ball Video: Crystal ball gazing, how to use a Crystal Ball ~ How to Scry with a Crystal Ball ~ by Sonia Parker - YouTube
EconoMe Conference: Our Speakers - EconoMe (economeconference.com)
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In this episode we answer a series of emails from Drew and one from Ms. Annie Mouse. We discuss the fund BLNDX, managed futures and how to analyze new and composite funds and then rant about TIPs misconceptions and uses for your delight and amusement.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Podcast re BLNDX: Creating The Optimal Diversified Portfolio | Eric Crittenden | Episode 64 - The Market Call Show | Podcast on Spotify
Analysis of BLNDX vs. a 50/50 stock/managed futures portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Analysis of 50/50 stock/managed futures portfolio vs. Golden Ratio-style portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
LTPZ vs. TLT analysis: https://tinyurl.com/2fgsgn8o
EconoMe: Our Speakers - EconoMe (economeconference.com)
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In this episode we answer emails from Johnny, Kevin and Daniel. We discussed managed futures vs. commodity funds, the Mt. Lucas "Dirty Portfolios" with KMLM and how to transition from one asset to another in a portfolio with the beginning of a new pedagogical experiment in that.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Dirty Portfolios Article with Dirty Harry Quotes: Dirty Portfolios - Managed Futures As A Portfolio Element (mtlucas.com)
Side-by-Side Analysis Of Original and Planned Golden Ratio Portfolios: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Side-by-Side Analysis of Original and Planned Levered Golden Ratio Portfolios: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
EconoMe Conference: Programming & Activities - EconoMe (economeconference.com)
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In this episode we answer emails from Alexi (a/k/a "the Dude"), the effervescent MyContactInfo, and Mike. We discuss a Portfolio Visualizer fund selection tool for factor investing, Merton and other academics, and an uncannily familiar diversified portfolio recently featured in a Marketwatch article. And we play some Motorhead and rant about financial media a bit.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Portfolio Visualizer Fund Factor Attribution Tool: Mutual Fund and ETF Factor Performance Attribution (portfoliovisualizer.com)
Rational Reminder Interview of Robert C. Merton: Episode 234: Prof. Robert C. Merton: ICAPM, Retirement, and Models in Finance — Rational Reminder
MarketWatch Article: This 'crazy' retirement portfolio has just beaten Wall Street for 50 years - MarketWatch
Easy Improvements to Marketwatch-featured portfolio: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
EconoMe Conference: Programming & Activities - EconoMe (economeconference.com)
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In this episode we answer two looooong emails from Mark and Andreas. We discuss Mark's quandaries with a 457 plan and Andreas's Risk Parity fever brought on by topics that include how to choose ETFs for each asset class, leverage in bond funds, TIPS, a proposed portfolio, other alternatives like long-short, market neutral and options strategies and musings about taxes and currency exposures. And then we conclude with Polo Hofer.
Links:
Father McKenna Center donation page: Donate - Father McKenna Center
Risk Parity Chronicles video tutorial on asset swapping: How to Do an Asset Swap - YouTube
Risk Parity Chronicles series on TIPS: Eight Observations About TIPS (riskparitychronicles.com)
ETF Database: ETF Database: The Original & Comprehensive Guide to ETFs (etfdb.com)
Bloomberg Presentation on Asset Classes in Inflationary Environments: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)
Vanguard Commodities Paper: Commodity investing and its role in a portfolio (vanguard.com)
Antti Ilmanen books: Books by Antti Ilmanen (Author of Expected Returns) (goodreads.com)
EconoMe Conference: EconoMe Conference - March 17th-19th, 2023
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In this episode we answer emails from Kyle, Esek and Erin. We discuss 529 plans, what is "enough" in terms of this podcast, and THEN the meta approaches to retirement planning and the importance of distinguishing portfolio construction and allocation strategies from portfolio management techniques, including a tour on the Good Ship Lollipop with the Outlaw Josey Wales. Errata: I said "Bernstein assumptions" when I meant "Bengen assumptions."
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
EconoMe Conference link: Programming & Activities - EconoMe (economeconference.com)
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In this episode we answer emails from Gareth, Mark and Alex. We talk about the meta-differences in investing in various countries, utilities, long dollar funds like UUP, specialized commodities mutual funds like LCSIX and a couple new leveraged funds with mixed asset classes.
Links:
LCSIX Fact Sheet: LoCorr-Funds-Long-Short-Commodities_fact_sheet.pdf (locorrfunds.com)
Alex's SEC Link To Return Stacked Funds Prospectuses: https://www.sec.gov/Archives/edgar/data/1924868/000138713122011734/newfound-485apos_112322.htm
Resolve Asset Management Return Stacking White Paper: Return Stacking: Strategies For Overcoming a Low Return Environment (investresolve.com)
Resolve Asset Management YouTube Channel (Video on Risk Parity): Risk Parity Is the Answer: What Was the Question? (EP.18) - YouTube
EconoMe Conference: Programming & Activities - EconoMe (economeconference.com)
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In this episode we answer emails from Justin and Arun. We discuss the last decade of history of the failed use of CAPE ratios as a crystal ball and the general problems with those approaches, and the inherent limitations and problems with using the personal finance recommendations of theoretical economists.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
CAPE Ratios Article: CAPE Fear: Why CAPE Naysayers Are Wrong | Research Affiliates
Michael Kitces CAPE Article (2016): Reducing Retirement Return Assumptions For High Valuation? (kitces.com)
Kitces Critique of November 2021 Morningstar Forecasts Report: Can Morningstar's Withdrawal Rate Report Refute The 4% Rule? (kitces.com)
Sector P/E Ratios Article: Sector Valuation: Shiller PE By Sectors - GuruFocus.com
Industry P/E Ratios Article: Price to Earnings (P/E) Ratios by Industry | Eqvista
2022 Morningstar Report: 2022 Retirement Withdrawal Strategies Report | Morningstar
Afford Anything Kotlikoff Interview: #329: Challenging Your Confirmation Bias, with Economist Larry Kotlikoff - Afford Anything
Planet Money Economist Interview: Yale Economist James Choi Analyzes Popular Financial Advice : Planet Money : NPR
Complex Adaptive Systems and the Math that Applies To Them: The Fractal Lens - Prospecting Mimetic Fractals
More Than You Know Book: More Than You Know: Finding Financial Wisdom in Unconventional Places by Michael J. Mauboussin | Goodreads
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In this episode we take the Dude's suggestion and do a detailed analysis of the Advocate Rising Rate Hedge ETF, ticker symbol RRH.
To conduct our analysis of RRH, we use SPLB, using David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Links:
RRH Website: Advocate Rising Rate Hedge ETF (rrhetf.com)
RRH Fact Sheet: Microsoft PowerPoint - Advocate RRH Fund Fact Sheet Jan 2023 v01 (rrhetf.com)
RRH Summary Prospectus: advocate_rrh_summary.pdf (rrhetf.com)
Podcast about RRH: Scott Peng, PhD, Founder and CEO/CIO, Advocate Capital Management - Alpha Exchange | Podcast on Spotify
Asset Correlation Analysis of RRH: Asset Correlations (portfoliovisualizer.com)
Risk Parity Chronicles TIPs Blog Series (Summary and Conclusions): Eight Observations About TIPS (riskparitychronicles.com)
EconoMe Conference: Programming & Activities - EconoMe (economeconference.com)
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In this episode we answer emails from Alexi (Dude!) and Spencer. We discuss a recent Bloomberg presentation about what asset classes perform best and worst in inflationary environment, how that informs portfolio construction and why we don't bother with meaningless fund characteristics like mid-caps and dividend-payers for portfolio construction.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Steve Hou/Bloomberg Presentation: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)
Market Huddle Video with Steve Hou: To Survive Disasters, You Need Smiles (guest: Steve Hou) - Market Huddle Ep.201 - YouTube
Article about the "Factor Zoo": Taming the Factor Zoo (aqr.com)
EconoMe Conference: EconoMe Conference - March 17th-19th, 2023
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In this episode we answer emails from Arun, Blake and MyContactInfo. We discuss helping a spouse getting started with investing, what to do with an options strategy portfolio, why index funds still rule over managed funds, good and bad processes for picking funds and various gambling problems.
Links:
Simple Portfolios for Arun's Spouse: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Article re Index Funds Beating Managed Funds: Actively Managed Mutual Funds Consistently Fail to Beat Markets, Study Finds - The New York Times (nytimes.com)
EconoMe Conference: EconoMe Conference - March 17th-19th, 2023
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In this episode we answer emails from Alexi (Dude!), Yangon and Brett. We discuss the momentum factor (again), mid-cap funds and other fund characteristics that are lacking in meaning for the purposes of diversification, financial advisor certifications and investing in BDCs (Business Development Companies).
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
EconoMe Conference: EconoMe Conference - March 17th-19th, 2023
DFA Article About Momentum Strategy Funds: Have Investors Benefited from Momentum Strategies? | Dimensional
Momentum Funds Correlation Matrix: Asset Correlations (portfoliovisualizer.com)
Series 65 Licenses Article: Series 65 Definition (investopedia.com)
Series 7 Licences Article: Series 7: Definition and Formula for Calculation, With Example (investopedia.com)
Brett's BDC Article: Credit Is Good: BDC Credit May Be Even Better | Seeking Alpha
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In this episode we answer a trio of emails from MyContactInfo and a piece de resistance from Eric. We discuss why complicated financial products are bad for you, Peter Bernstein's books and what Paul Volcker had to say about gold, and spurious histories of money. And we celebrate our inanity and insanity with Eric.
Links:
Power of Gold book: The Power of Gold: The History of an Obsession: Bernstein, Peter L., Volcker, Paul A.: 9781118270103: Amazon.com: Books
Link to Campbell Harvey article: Gold, the Golden Constant, and Déjà Vu (cfainstitute.org)
Peter Zeihan video about monetary systems: Global Currency: The Dollar Ain't Going Nowhere - YouTube
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In this episode we answer emails from Trey, Nita, Christy and Keith. We discuss considerations in bond fund selections (see also Episodes 14 and 16) and the specific fund IEI, timing for transitioning to your retirement portfolio, classifying the Sample Portfolios by intended purposes, and a new tool for analyzing portfolios with managed futures.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional link:
Keith's Link to the new tool: Portfolio Builder - Dunn Capital
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In this episode we answer emails from MyContactInfo, Cy, Alexi (Dude!) and Chris. We discuss value vs. growth factors, assisting children with investing and inheritances, momentum factor investing and the fund QMOM, and the best audience available.
Links:
QMOM and MTUM asset correlations: Asset Correlations (portfoliovisualizer.com)
QMOM Performance: QMOM – Alpha Architect US Quantitative Momt ETF – ETF Stock Quote | Morningstar
MTUM Performance: MTUM – iShares MSCI USA Momentum Factor ETF – ETF Stock Quote | Morningstar
Bloomberg Presentation on Asset Classes in Inflationary Environments: MTUM – iShares MSCI USA Momentum Factor ETF – ETF Stock Quote | Morningstar
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In this episode we do an annual review of the seven sample portfolios you can find at Portfolios | Risk Parity Radio. We compare them with standard funds including VBIAX (60/40), VWENX, VWIAX, risk parity funds including RPAR and UPAR, and ultra-diversified funds including AQRIX and QDSIX. And we conclude with some take-away thoughts from this disaster of a year as predicted by Quasimodo.
Additional links:
Risk Parity Chronicles Resource Page: Resources - Risk Parity Chronicles
RPAR and UPAR Descriptions: RPAR Risk Parity ETF (rparetf.com)
AQRIX Fund Page: AQR Multi-Asset Fund - AQRIX
QDSIX Fund Page: AQR Diversifying Strategies Fund - QDSIX
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In this episode we answer emails from MyContactInfo, Mark and Eric. We discuss rowing machines, the infernal JEPI and other heavily marketed financial products, and what to do as a DIY investor for legacy investing. Happy Holidays!
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In this episode we answer emails from Drew, Sad Fientist and Popeye. We discuss managed futures and the fund BLNDX, intermediate treasury bonds and general bond considerations and record keeping for the sample portfolios. And throw in some Talladega Nights gold fleece diaper-dom along the way.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
BLNDX Information Pages: Standpoint Multi-Asset Fund - Documents (filepoint.com)
Portfolio Charts Article Re Tax-Loss Harvesting TLT: Harvesting the Fall: Why I Sold All My Bonds – Portfolio Charts
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In this episode we answer emails from Bradley, Chris and Andreas. We discuss traditional versus Roth considerations in retirement accounts, REITs, some risk parity fundamentals about the interplay between asset classes and macroeconomic environments and how that relates to correlations, a recent risk parity backtest to 1926 and the real reasons to use small cap value allocations. I'm telling you, fellas, you're gonna want that Cowbell!
Links:
REIT Sectors and Directory: REIT Sectors | Nareit
Episode 5 Bridgewater Article on Risk Parity Fundamentals: Microsoft Word - 2009.12 AW Info Pack.doc (granicus.com)
Early Retirement Now Article re Small Cap Value: My thoughts on Small-Cap and Value Stocks – Early Retirement Now
Analysis of Small-Cap Value vs. Total Market since 1972: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Bloomberg Presentation re Performance of Various Asset Classes in Inflationary Environments: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)
Merriman Podcast (12/21/2022) on Small Cap Value Stocks: 10 reasons small-cap value can make you richer - Paul Merriman
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In this episode we answer emails from Alexi (a/k/a "the Dude"), Matt and Daniel. We talk about Alexi's Dragon-style portfolio experiments (and provide links), market orders vs. limit orders and miscellaneous trading advice, and the evolution of DIY investing with ETFs and other funds since 2011.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Alexi's Dragon-style portfolios: Alexi's Portfolio Asset Allocation (portfoliovisualizer.com)
Alexi's Dragon-style portfolios with longer data-set funds: Alexi's Portfolio Asset Allocation (Proxy Funds) (portfoliovisualizer.com)
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In this episode we answer emails from Charlie, Jimi and Freya. We provide explanations of the concepts of rebalancing and reallocation, talk about a listener's favorite sound clip and about creating a simple starter portfolio for a very small U.K. investor. And we take a poke at the new Morningstar report on retirement forecasting and projected safe withdrawal rates, and the vast changes they made from last year.
Links:
New Morningstar Report: 2022 Retirement Withdrawal Strategies Report | Morningstar
Michael Kitces Optimal Rebalancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Ernest P. Worrell: Ernest P. Worrell - Wikipedia
Jim Varney: Jim Varney - Wikipedia
"Hey Vern It's Earnest" Clip: Hey Vern It's Ernest.m4v - YouTube
Paul Merriman "Sound Investing" Podcast on Portfolio for Grandchild: How to Create a Financial Legacy for a Child - Sound Investing | Podcast on Spotify
Portfolio Charts "My Portfolio" Analyzer: MY PORTFOLIO – Portfolio Charts
ISVL Fund Page: iShares International Developed Small Cap Value Factor ETF | ISVL
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In this episode we answer emails from Brian, Alexi (the Dude!) and Geordi. We discuss how central bank activities may affect asset correlations, applying the history of money to today's crypto currency-related issues, investing in volatility, another podcast about DBMF, and the follies and foibles of the physical precious metals racket and the participants therein, especially the newsletter and book-touting Hedgehogs.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Bloomberg Presentation re Asset Performances in Inflationary Environments: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)
YouTube video explaining Bloomberg presentation: To Survive Disasters, You Need Smiles (guest: Steve Hou) - Market Huddle Ep.201 - YouTube
Interview of Andrew Beer about DBMF (managed futures): 214 Systematic Investor Series ft. Andrew Beer – October 16th, 2022 | Top Traders Unplugged
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In this episode we answer an email from Daniel, who asks a follow-up question to episode 209 about CAPE ratios and Big ERN's blog. We then recount a Zoom chat and email exchanges between the host and Karsten Jeske about that topic and related ones and an analysis of a sample risk-parity style portfolio using the Early Retirement Now SWR Toolbox. It's similar to "Celebrity Deathmatch" in entertainment value.
We also talk briefly about Risk Parity Chronicles, The upcoming EconoMe Conference with Diania Merriam and the upcoming event at the Father McKenna Center.
Links ("the best links, the best"):
Father McKenna Center Lessons and Carols Event Link: Lessons and Carols - Father McKenna Center
Risk Parity Chronicles: Risk Parity Chronicles
EconoMe Conference: EconoMe Conference - March 17th-19th, 2023
Early Retirement Now SWR Toolbox: An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now
Safe Withdrawal Series Part 34: Using Gold as a Hedge against Sequence Risk – SWR Series Part 34 – Early Retirement Now
Kitces CAPE Ratio Article 2014: Shiller PE: Bad Market Timing, Good Retirement Planning (kitces.com)
Kitces CAPE Ratio Article 2016: Reducing Retirement Return Assumptions For High Valuation? (kitces.com)
Kitces Critique of November 2021 Morningstar Forecasts Report: Can Morningstar's Withdrawal Rate Report Refute The 4% Rule? (kitces.com)
Morningstar 2011 Article About Predicting the Next Decade (classic misuse of P/E ratios): Your Forecasts for Stock and Bond Returns | Morningstar
Early Retirement Now Small-Cap and Value Blogpost: My thoughts on Small-Cap and Value Stocks – Early Retirement Now
Early Retirement Now Options Strategy Blogpost: Passive income through option writing: Part 8 – A 2021 Update – Early Retirement Now
The Market Huddle Podcast re Bloomberg Analysis: To Survive Disasters, You Need Smiles (guest: Steve Hou) - Market Huddle Ep.201 - YouTube
Bloomberg Presentation: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)
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In this episode we answer emails from Jamie, Chris and The Dude (Alexi). We give do some listener appreciation and talk about The Dude's proposed volatility-related allocation.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
And we also invite you to an event at the Father McKenna Center in Washington, DC -- Lessons and Carols on December 8 at 7 pm.
Additional links:
Father McKenna Center Lessons and Carols: Lessons and Carols - Father McKenna Center
Jamie's Article re Luck and Success: Winning a Nobel Prize Takes Luck as Much as Talent - WSJ
The Dude's Proposed Volatility Allocation: 7% CCOR, 5% YCS, 5% EUO and 3% VIXM (20% overall allocation).
CCOR fund page: CCOR ETF | Core Alt Capital (corealtfunds.com)
Correlation Matrix with Alexi's Funds and BTAL: Asset Correlations (portfoliovisualizer.com)
Backtest using Alexi's volatility allocations: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we answer emails from Gregory, MyContactInfo, Ralphio and Spencer. We discuss the overriding currency speculation aspect of investing in non-U.S. funds, keeping things simple during accumulation, leveraged funds, some academic analyses of managed funds and what to make of it, how to identify the basic factors of given funds and the Shplendid aspects of MORE COWBELL.
Links:
Paul Merriman's "Best in Class" Fund Identification Page: Best-in-Class ETF Portfolios - Paul Merriman
Rational Reminder Leveraged Portfolios Video: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
Rational Reminder Interview of Professors Berk and Binsbergen: Episode 220: Jonathan Berk and Jules van Binsbergen: The Arithmetic of Active Management, Revisited — Rational Reminder
Berk and Binsbergen 2014 Paper re Active Management: delivery.php (ssrn.com)
Rational Reminder Interview of Eduardo Repetto of Avantis: Episode 228: Eduardo Repetto: Deep Dive with Avantis Investors' CIO — Rational Reminder
Rick Ferri Interview of Eduardo Repetto of Avantis: Episode 43: Bogleheads on Investing – guest Eduardo Repetto, host Rick Ferri – Rick Ferri, CFA
Morningstar Analysis of IJR: IJR – Portfolio – iShares Core S&P Small-Cap ETF | Morningstar
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In this episode we answer emails from Nick, Mr. Harris and Howard. We discuss the hoary details of the tax reporting of GLDM, following your rebalancing rules and why relying on the past performance of managed mutual funds probably is not a good idea.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio. With rebalancing this week!
Additional links:
Father McKenna Center Giving Page: Donate - Father McKenna Center
Optimal Rebalancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
SPIVA Report for 2021: SPIVA U.S. Year-End 2021 Scorecard (spglobal.com)
Morningstar Analyzer -- PRWCX: PRWCX – Portfolio – T. Rowe Price Capital Appreciation | Morningstar
Portfolio Visualizer Comparison Analyses of PRWCX: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we answer emails from Uday, Rick, Anderson and Jacques. We discuss Giving Tuesday and the Father McKenna Center, new tutorials at Risk Parity Chronicles about asset swaps and wash sales, buffered ETFs and scandalous structured products, why we still love gold (a little), getting exposure to small cap value -- yada, yada, yada -- and bond ladders vs. bond funds.
Links:
Father McKenna Center Homepage: Home - Father McKenna Center
Father McKenna Center Giving Page: Donate - Father McKenna Center
Risk Parity Chronicles Asset Swap Post And Tutorials: Risk Parity Basics: Asset Swaps and the Important Wash Sale Rule (riskparitychronicles.com)
Analysis of Buffered Fund BSEP: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Portfolio Charts "Ingredients" Article: Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts
Morningstar Analyzer: VEXMX – Portfolio – Vanguard Extended Market Index Investor | Morningstar
Ben Carlson Article: Owning Individual Bonds vs. Owning a Bond Fund (awealthofcommonsense.com)
Finance Buff Article: Two Types of Bond Ladders: When to Replace a Bond Fund or ETF (thefinancebuff.com)
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In this episode we answer emails from Ethan, Eric, MyContactInfo and Jon. We discuss using the Golden Ratio portfolio for intermediate accumulations, Hedgehogs and Foxes in economic forecasting, total bond funds, momentum factor investing and Frankie Goes To Hollywood.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio. With rebalancing this week!
Additional links:
Wealthtrack Interview of Jim Grant: INFLATION’S DAMAGE: FINANCIAL CONSEQUENCES & INVESTMENT STRATEGIES WITH HISTORIAN JAMES GRANT : WealthTrack
Flirting With Models Podcast with Andrew Beer (DBMF): Flirting with Models: Andrew Beer - Replicating Hedge Fund Beta (S5E9) (libsyn.com)
Bogleheads Forum Link on Total Bond Funds: Bogle said 75% Total Bond and 25% Investment Grade Corp. Bond? - Bogleheads.org
Fama on Momentum Article (I found it!): Fama on Momentum (aqr.com)
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In this episode we answer questions from Brad, Craig, AnnieMous, and Jack. We discuss new information from Portfolio Charts about tax-loss harvesting bond funds like TLT (and other funds), portfolio construction with the Golden Ratio, the recent popularity of managed futures with the info-sales and marketing crowd, portfolio management with asset swapping between taxable and tax-protected accounts, and REITs in the Portfolio Charts Portfolio Finder.
Links:
Portfolio Charts Tax Loss Harvesting Article: Harvesting the Fall: Why I Sold All My Bonds – Portfolio Charts
Buffett's Alpha Paper: Buffett’s Alpha (tandfonline.com)
Brad's Portfolio Construction Article: How to Balance a Portfolio - (breakingthemarket.com)
Brad's Other Article: Breaking the Market University -
Portfolio Charts Portfolio Finder: PORTFOLIO FINDER – Portfolio Charts
Early Retirement Now SWR Spreadsheet Tool Article and Link: An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now
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In this episode we answer emails from Blake, Gen and MyContactInfo. We discuss Blake's good work with analysis tools, fractional shares of ETFs and more on managed futures and DBMF.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Blake's Model Portfolios: Model-Portfolios-for-Every-Financial-Stage-v2.pdf (pathwaytofi.com)
Blake's White Paper: Construction-and-Analysis-of-the-Pathway-to-FI-Model-Portfolios-v2.pdf (pathwaytofi.com)
Portfolio Charts Risk/Reward Calculator: RISK AND RETURN – Portfolio Charts
Portfolio Visualizer Asset Correlation Analyzer: Asset Correlations (portfoliovisualizer.com)
MyContactInfo Links to Andrew Beer/DBMF podcast: The Investors First Podcast: Andrew Beer, Dynamic Beta Investments: Replicating Hedge funds in an ETF Wrapper on Apple Podcasts
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In this episode we return from vacation ready to rumble and answer emails from Peter, David, MyContactInfo (x2) and Mark. We appreciate our listeners and then annoy them (I've got an angle), talk about ESG investing and why you want to have both growth and value funds and talk about buy-write funds in general and JEPI in particular.
Links:
Risk Parity Chronicles Resources: Resources - Risk Parity Chronicles
ESG Article One: Shades of Green - HumbleDollar
ESG Article Two: Musings on Markets: ESG's Russia Test: Trial by Fire or Crash and Burn? (aswathdamodaran.blogspot.com)
Backtest of 50/50 Value/Growth vs. Total Market: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Asset Correlation Matric for JEPI: Asset Correlations (portfoliovisualizer.com)
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In this episode we answer emails from Harvey (a large rodent), MyContactInfo and Mark. We discuss the Dragon Portfolio and managed futures funds like DBMF, reprise Episode 202, some common mistakes of amateur investors, reverse mortgages (briefly), and how we have incorporated and modified classic and theoretical risk parity principles.
Links:
Recent Interview of Andrew Beer (DBMF): 214 Systematic Investor Series ft. Andrew Beer – October 16th, 2022 | Top Traders Unplugged
Harvey's First Link re Dragon Portfolio: How to Build a Recession-Proof Investment Portfolio (w/ Danielle DiMartino-Booth & Chris Cole) - YouTube
Harvey's Second Link re Dragon Portfolio: How to Build the Dragon Portfolio - YouTube
In Pursuit of the Perfect Portfolio book: In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest by Andrew W. Lo (goodreads.com)
CFA Manual Chapter re Risk Parity: chapter-4-from-managing-multiasset-strategies-2018.pdf (callan.com)
Early Retirement Now Gold Study: Using Gold as a Hedge against Sequence Risk – SWR Series Part 34 – Early Retirement Now
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In this episode we answer questions from Jeremy, Richard and Gen. We discuss the moribund WARM portfolio strategy, more issues about annuities and where to learn more about them, and fractional share trading of ETFs.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
JL Collins Article on WARM Strategy: Sleeping soundly thru a market crash: The Wasting Asset Retirement Model - JLCollinsnh
Bogleheads Critiques of WARM Strategy: No risk retirement withdraw strategy - WARM - Bogleheads.org
Stan The Annuity Man Channel: Stan The Annuity Man - YouTube
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In this episode we answer emails from Sue, Vern and Rene. We discuss revocable trusts, where and where not to get them and why or why not you might want one, the mechanics of rebalancing and drawing down on a portfolio with multiple accounts, and the differences between various small cap funds like IJR, IJS, IJT and VIOV.
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In this episode we answer emails from Boone, MyContactInfo and Alex. We discuss issues with leverage, real estate invesments and spreadsheet projections. Listen for the BLOOPER!
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Video About Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
Optimized Portfolios Leveraged ETFs Reviews: The 9 Best Leveraged ETFs To Enhance Portfolio Exposure (2022) (optimizedportfolio.com)
MyContactInfo's Link to Vanguard REIT: VGSLX-Vanguard Real Estate Index Fund Admiral Shares | Vanguard
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In this episode we follow up on Episode 209 with some recent (as in this week) Wade Pfau references that confirm what we said about overly pessimistic SWR assumptions. And then we answer emails from Justin, Drew, Jim and Chris. We discuss REITs and the Risk Parity Chronicles series about them, good sources for information about factor or "smart beta" investing, and questions about transitioning from accumulation to decumulation when you are close to "winning the game."
Links:
Retire With Style Podcast #34: Retire With Style - Episode 34: Even In Volatile Markets, Find Out Why The 4% Rule Distribution May Be Too Low (google.com)
Risk Parity Chronicles REIT Series Conclusion: Post-script to REITs series: How do individual REITs compare? (riskparitychronicles.com)
Rational Reminder Podcast #213: RR #213 - Expected Returns and Factor Investing - YouTube
Rational Reminder Podcast #129: RR #129 - Five Factor Investing with ETFs - YouTube
Resolve Asset Management YouTube Channel: ReSolve Asset Management - YouTube
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In this episode we answer a lengthy email from Kevin about issues with popular estimates of Safe Withdrawal Rates. We then discuss the problems with and failings of some of these estimates and their underlying analysis, including why Best Practices beat Convenient Shibboleths, failures to analyze non-simplistic portfolios, misuse of the "reversion to the mean" concept, improper use of conservative assumptions and modelling software, improper use of the 30-year time frame, and the failure to incorporate well-accepted favorable assumptions.
We also discuss appeals to popularity and conflicts of interest, including safety in numbers, the use of double standards, the popularity of pessimism, and the desire to please sponsors, sell products and maintain past consistency, whether foolish or warranted.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
SWR Series #34: Using Gold as a Hedge against Sequence Risk – SWR Series Part 34 – Early Retirement Now
Next Level Life Video re Gold: Why Are Gold Portfolios So Dependable? - YouTube
RAM Interview of Wade Pfau: ReSolve Riffs with Wade Pfau on Optimal Retirement Strategies - YouTube
Morningstar 2011 (Lousy) Predictions Article: Your Forecasts for Stock and Bond Returns (2011)| Morningstar
Portfolio Charts SWR/PWR Calculator: WITHDRAWAL RATES – Portfolio Charts
Kitces Article Re Consequences of Retirement Spending Smile: How Total Spending Declines Over Time In Retirement (kitces.com)
RAM Interview of Antti Ilmanen: Antti Ilmanen on his new book "Investing Amid Low Expected Returns" - YouTube
Immediate Annuities Website: Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com
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In this episode we discuss an email from and conversation with Paul Merriman. We follow up on his suggestion/request that we create an episode for beginning investors to help them get going in a simple way that can work. And then we embark on a very special trip. Very. Special.
Links:
The Four Phases of Saving and Investing for Retirement: The Four Phases Of Saving For Retirement (kitces.com) Earn = Kansas. Save = Munchkinland. Grow = The Roads To Emerald City. Preserve = Emerald City.
Paul Merriman website: Home - Paul Merriman
Paul Merriman Sound Investing podcast: Podcasts - Paul Merriman
Paul Merriman Best In Class Funds: Best-in-Class ETF Recommendations - Paul Merriman
Earn & Invest Podcast (#349) Interview of Paul Merriman: Are We Leaving Money on the Table? — Earn & Invest (earnandinvest.com)
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In this episode we answer emails from Arun, Jeffrey and Chris. We discuss using simple back-of-the-envelope estimation methods to solve for complex portfolio projections, using a risk parity style portfolio for intermediate accumulations, and re-cap annuity considerations from Episode 184.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Arun's question:
"What type of portfolio would you suggest for below scenario. I can invest $x a month for y years and can let it sit for n years. After y+n years would like to start withdrawing at least .75x dollars per month perpetually. Value of x would be less than $1000 and value of y would be 5-10 years but depending on future need and market condition it can stay longer or shorter. Ideally would like to have n=0 but that might be too ambitious. Is there to tool to play with these variables that you know and what type of portfolio would you suggest."
Additional Links:
Risk Savvy book: Risk Savvy: How to Make Good Decisions by Gerd Gigerenzer | Goodreads
Portfolio Visualizer Monte Carlo Simulator with Multi-stage Analyzer: Financial Goals (portfoliovisualizer.com)
Rule of 72: Rule of 72 - Wikipedia
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In this episode we answer questions from MyContactInfo, Wesley and Adam. In a tour de force presentation, we discuss Michael Mauboussin's book, "The Success Equation: Untangling Skill and Luck in Business, Sports and Investing", the implications of an all small-cap value portfolio and applying the ideas of Bruce Lee and Emerson to Jack Bogle's "Common Sense Investing". And we also take a frolic and detour into the Twilight Zone.
Links:
CFA Institute Book Review the The Success Equation: The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing (a review) (cfainstitute.org)
Twilight Zone Episode Clips: Twilight Zone: Of Late I Think Of Cliffordville - YouTube
Earn & Invest Podcast (#349) Interview of Paul Merriman: Are We Leaving Money on the Table? — Earn & Invest (earnandinvest.com)
Rational Reminder Podcast Interview of Vanguard's Former CIO: Episode 216: Gus Sauter: Vanguard's Former CIO on Indexing, Active Management, and Private Equity — Rational Reminder
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In this episode we answer emails from Connor, Paul and Paul Z. We discuss a new single bond ETF, Paul's risk parity style portfolio and AVUV vs. VIOV. And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Connor's Article: Single-Bond ETFs Solve Some Key Investing Problems (wealthmanagement.com)
Analysis of Paul's Portfolio and Alternatives: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Interview of Eduardo Repetto: Episode 43: Bogleheads on Investing – guest Eduardo Repetto, host Rick Ferri – Rick Ferri, CFA
AVUV Webpage: AVUV - Avantis® U.S. Small Cap Value ETF | Avantis Investors
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In this episode I answer a question from Charles, who has a terminal illness. We go off topic and discuss books about dying, examples of people who did it well, and resources for short-term trading.
Links:
End of Life Series: Barbara Karnes' End of Life Guideline Series - BK Books – BK Books
The Five Invitations: The Book | The Five invitations: What Death Can Teach Us About Living Fully – by Frank Ostaseski
Taking Stock: Jordan Grumet | Welcome to JordanGrumet.com
Blue Zones Vitality Test: True Vitality Test by Blue Zones
Sit-Rise Test: This test could predict how long you will live - YouTube
Shadow Trader Site: ShadowTrader: Daily Market Trading News Stories & Market Education
Peter Reznicek Video: Peter Reznicek - ShadowTraders @ 1pm ET - How I prepare each morning to trade - YouTube
Tasty Trade: tastytrade: A Financial Network for Options & Futures Trading | tastytrade
Market Wizards Books: market wizards books schwager - Search (bing.com)
Big ERN Options Strategy: Trading like an Escape Artist: How I made money in October trading S&P Futures Options with 2x leverage – Early Retirement Now
Kelly Criterion: Kelly Criterion Definition (investopedia.com)
Ed Thorp Autobiography: A Man For All Markets - Edward O. Thorp (edwardothorp.com)
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In this episode we answer emails from Gen, Greg and Nathan. We discuss how to find funds using a fund screener and why you should not be using the investment account equivalents of blackberries and flip-phones any more, individual REIT selections, and value and growth data sources. I forgot to mention that the other individual REIT we hold is WY, which invests in timber (and thereby missed another opportunity to play the lumberjack song.)
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Fund Screener: Fund Screener (portfoliovisualizer.com)
Rob Berger Video About Vanguard's New Fees: Vanguard Fees Are Going Up -- Here's Why and How to Avoid Them - YouTube
Investopedia Article - Value vs. Growth in the S&P 500: Value or Growth Stocks: Which Is Better? (investopedia.com)
Value vs. Growth Over Time: Canterbury Investment Management - Value versus Growth: A Brief Historical View (canterburygroup.com)
DFA Matrix Book: Matrix+Book+2020.pdf (squarespace.com)
Walk For McKenna: Walk4McKenna - Father McKenna Center
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In this episode we answer questions from Andy and Todd. We discuss the Buy, Borrow, Die Strategy and everything you wanted to know about the Host (or maybe not) and his approach.
Links:
Luke Burgis Book About Mimetic Theory: Wanting: The Power of Mimetic Desire in Everyday Life by Luke Burgis | Goodreads
Barking Up The Wrong Tree Book: Barking Up the Wrong Tree: The Surprising Science Behind Why Everything You Know About Success Is (Mostly) Wrong by Eric Barker | Goodreads
Interview of Rick Ferri About His Portfolio: Show Us Your Portfolio: Rick Ferri - YouTube
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In this episode we answer emails from Micah, Steve and Keith. We discuss the limit on the usefulness of Sharpe and Sortino ratios, helping out Steve's daughters with building and managing a portfolio for medium-length goals and what else Uncle Frank says to guide his adult kids with ant brains and grasshopper brains and comparing actual performances with Portfolio Visualizer models.
Links:
Portfolio Visualizer comparison of short term treasuries and gold: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
PHYS ETF particulars: Sprott Physical Gold Trust
Walk For McKenna: Walk4McKenna - Father McKenna Center
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In this episode we answer emails from Justus (x2), Anderson and Blake. We discuss life transitions, what I've learned over an evolving DIY investing career, and Blake's Pathway of FI.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Portfolio Charts Sample Portfolios: Portfolios – Portfolio Charts
Risk Parity Chronicles Resources Page: Resources - Risk Parity Chronicles
Kitces Four Phases Article: The Four Phases Of Saving For Retirement (kitces.com)
Blake's Article: Model-Portfolios-for-Every-Financial-Stage.pdf (pathwaytofi.com)
Blake's Model Portfolio Construction Paper: Construction-and-Analysis-of-the-Pathway-to-FI-Model-Portfolios.pdf (pathwaytofi.com)
Morningstar Tool With International Fund: VXUS – Portfolio – Vanguard Total International Stock ETF | Morningstar
Walk For McKenna: Walk4McKenna - Father McKenna Center
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In this episodes we answer emails from Alexi (Dude!), Brian, NED(!) and William. We discuss DBMF and managed futures funds, a 80/10/10 transition portfolio, leverage in accumulation portfolios and adjusting all-stock index fund portfolios.
Links:
Walk For McKenna: Walk4McKenna - Father McKenna Center
Andrew Beer (DBMF) Interview: Jack Bogle of Hedge Funds (guest: Andrew Beer) - Market Huddle Ep.188 - YouTube
Ben Felix Video About Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
"Buffett's Alpha" White Paper: Buffett’s Alpha (tandfonline.com)
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In this episode we answer emails from Karen, Adam and Pankaj. We revisit China and reserve currencies, discuss cognitive biases, talk about accumulation portfolios, bonds and the Macro Allocation Principle, and about tax loss harvesting bond and gold ETFs.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Ben Felix Video On Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
ETF Database: List of All ETFs - Exchange Traded Funds | ETF Database (etfdb.com)
TYA ETF Information Page: TYA Simplify Risk Parity Treasury ETF | Simplify
PHYS Information Page: Sprott Physical Gold Trust
Charity Walk For McKenna: Walk4McKenna - Father McKenna Center
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In this episode we answer emails from Howard, Paxton, Neil and Soo New. We discuss why financial TV is bad for your financial mind and health, the RISR ETF that invests in interest components of mortgage-backed securities, defense stock ETFs, the JPST ETF and what Soo New might do with her employer pension fund. It's Weird, Wild Stuff!
Links:
RISR Information Page: Rising Rate ETF (RISR) — FolioBeyond ETFs
Morningstar Analysis of ITA Defense Stock ETF: ITA – Portfolio – iShares US Aerospace & Defense ETF | Morningstar
JPST Analysis: JPST – JPMorgan Ultra-Short Income ETF – ETF Stock Quote | Morningstar
Immediate Annuity Price/Quote Site: Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com
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In this episode we answer emails from Davis, Justus and Value Stock Geek. We discuss how to use extended duration bond funds like EDV, ZROZ and GOVZ, reprise our discussion about life transitions from Episode 71 and veer off into Peter Zeihan and China's demographics.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Arthur Brooks book: From Strength to Strength - Arthur C. Brooks (arthurbrooks.com)
David Brooks book: The Second Mountain by David Brooks (goodreads.com)
Richard Rohr book: Falling Upward: A Spirituality for the Two Halves of Life by Richard Rohr (goodreads.com)
Peter Zeihan with Meb Faber: Episode #419: Peter Zeihan – Deglobalization, Depopulation, & What It Means Going Forward - Meb Faber Research - Stock Market and Investing Blog
Disunited Nations book: Disunited Nations: The Scramble for Power in an Ungoverned World: Zeihan, Peter: 9780062913685: Amazon.com: Books
Shock of Gray book: Shock of Gray: The Aging of the World's Population and How it Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival, and Nation Against Nation by Ted C. Fishman (goodreads.com)
Lying Flat and Let It Rot Movements in China: After lying flat, a new trend among China's youth is to “let it rot (bai lan)” which worries CCP - YouTube
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In this episode we answer emails from MyContactInfo (x2), William and Peter. We discuss how brokerages and cars are alike, a correlation episode reference, analyzing a portfolio with Fidelity Select Funds in it (and other things) and transitions from VTSAX to some small cap cowbell and then to a Golden Ratio portfolio for retirement.
Links:
I'm Not Leaving Vanguard Article: Why I’m Not Leaving Vanguard | ETF.com
60/40 Is Still Alive Article: Like the phoenix, the 60/40 portfolio will rise again (vanguard.com)
Morningstar Fund Analysis Tool: FSRPX – Portfolio – Fidelity® Select Retailing | Morningstar
Asset Correlation Analysis Of Will's Portfolio: Asset Correlations (portfoliovisualizer.com)
ChooseFI Podcast Episode 194 About Bonds: The Role Of Bonds In A Portfolio | Ep 194 | ChooseFI
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In this episode we answer emails from Visitor #1109, Keith and Brad. We discuss Dunn Capital and Managed Futures funds, our podcast charity -- the Father McKenna Center --, and Mutiny Fund's "Cockroach Portfolio".
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Dunn Capital: Home - Dunn Capital
Top Traders Unplugged Podcast: Top Traders Unplugged
Mutiny Fund's Cockroach Portfolio: The Cockroach Portfolio - Mutiny Fund
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In this episode we answer emails from MyContactInfo (x2), Chris, and Andrew. We discuss "The Myth of Private Equity" by Jeff Hooke, the paradox of skill and how it is applied in garden-based portfolio construction, volatility targeting as a decision making mechanism for investing and my gout, my podcast musical selections and the security of the Golden Ratio portfolio. And we throw in a yield curve inversion video. We do it all here.
Links:
The Myth of Private Equity book: The Myth of Private Equity | Columbia University Press
Interview of Jeff Hooke: 361 – Jeff Hooke, Johns Hopkins - The Myth of Private Equity - YouTube
Paradox of Skill Article: The Paradox of Skill - Farnam Street
Primer on Volatility Targeting: An Introduction to Volatility Targeting - QuantPedia
Interview of Campbell Harvey re Yield Curve Inversion: Predicting Economic Activity with Yield Curves - YouTube
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In this annual feature we discuss how we rebalanced four of the sample portfolios you can find at Portfolios | Risk Parity Radio and have frolics and detours into discussions of bucket strategies, crypto-funds and the details of the Risk Parity Ultimate sample portfolio. We also highlight a new video tutorial from Justin at Risk Parity Chronicles about the Risk/Return tool at Portfolio Charts and do our weekly portfolio reviews of all seven sample portfolios.
Links:
Risk Parity Chronicles post and tutorial: Portfolio Charts Risk/Return Chart Tutorial (riskparitychronicles.com)
YouTube Link to tutorial: PC Risk/Return Chart Tutorial - YouTube
Interview of the originator of the "bucket strategy": Conversation with the Father of the Bucket Strategy--Harold Evensky - YouTube
Risk Parity Ultimate Portfolio Correlations Matrix: Asset Correlations (portfoliovisualizer.com)
Risk Parity Ultimate Portfolio Backtest: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we answer emails from Anderson, Aaron, Anna and Travis. We discuss how to use Portfolio Visualizer to compare portfolios on a particular time-frame using samples and a 60/40, where to address any data issues to Portfolio Charts and Portfolio Visualizer, and the current frustrations many are having with using Vanguard. And then we consult a crystal ball to help a six-year old child.
Links:
Comparison of Golden Butterfly, Golden Ratio and 60/40 Portfolios: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Portfolio Charts Data Page: Data Sources – Portfolio Charts
Portfolio Visualizer FAQ Page (Data Sources at Bottom): Frequently Asked Questions (portfoliovisualizer.com)
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In this episode we answer emails from Jody, Neil and The Nameless One. We discuss the basic ideas of portfolio constructions and the tools for doing it, the Golden Ratio portfolio and gold itself, and more I-bond suggestions and links.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Portfolio Charts Portfolio Examples: Portfolios – Portfolio Charts
Portfolio Finder Tool: PORTFOLIO FINDER – Portfolio Charts
Portfolio Matrix Tool: PORTFOLIO MATRIX – Portfolio Charts
Portfolio Risk and Return Tool: RISK AND RETURN – Portfolio Charts
Asset Correlation Tool: Asset Correlations (portfoliovisualizer.com)
Risk Parity Chronicles Resources: Resources - Risk Parity Chronicles
The Perfect Portfolio Book: In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest by Andrew W. Lo | Goodreads
Nameless One's I-bond Articles: I Bonds Archives - The Finance Buff
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In this episode we answer emails from MyContactInfo, Rob and Justin. We discuss a paper about GDP and the problems with using it to predict stock market returns, why China may never overtake the U.S. and ascend to reserve currency status and a most excellent rebalancing resource you can find at the Risk Parity Chronicles website and blog.
Links:
Economic Growth and Equity Returns Paper: Microsoft Word - EconGrowth.doc (ssrn.com)
GDP Article: Gross domestic product - Wikipedia
Risk Parity Chronicles Rebalancing Resource: Version 1.1 of the Simple Portfolio Rebalancing Spreadsheet (riskparitychronicles.com)
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In this episode we answer emails from Paul, Soo-New and Geordi. We discuss using the AVUV fund for your small cap value allocation, the timing of withdrawals to reduce stress and crystal balls, and small cap value vs. small cap blend funds. And we reference an article at Portfolio Charts reviewing common portfolios' performances in the first half of 2022.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Asset Correlation Analysis of IJR and IJS: Asset Correlations (portfoliovisualizer.com)
Portfolio Charts First Half of 2022 Portfolio Reviews: Halfway to Nowhere: 2022 Mid-Year Portfolio Rankings – Portfolio Charts
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In this episode we answer emails from MyContactInfo, Brett and Jamie. We discussed inherent biases, rolling over a TSP portfolio and reallocating it at Fidelity with or without a crystal ball, have a lengthy talk about allocations to managed futures and the difficulties in analyzing them, and SCO, a short oil futures ETF.
Links:
Gwen's Frustrations With A Rollover: Navigating The Archaic, Convoluted, Confusing, And Utterly Enraging 401(k) Rollover Process | Fiery Millennials
Patrick Boyle's Investment Musings In An Entertaining Accent: Investing In An Inflationary Environment! - YouTube
Artemis Capital's Hawk And Serpent Paper: DocSend
CME Paper Re CTA Indexes: a-comparison-of-cta-indexes.pdf (cmegroup.com)
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In this episode we answer questions from Matsui, FuriousRiskParityInvestor and Paul. We discuss why we have chosen excessively aggressive withdrawal rates for the sample portfolios, revisit treasury bond correlation issues and why smaller allocations to long-term treasuries make more sense than larger allocations to intermediate treasury bonds in most risk parity style portfolios.
And THEN we our go through our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Flights To Safety Treasury Bond Correlation Paper from Episode 176: delivery.php (ssrn.com)
Analysis of Golden Butterfly variations with intermediate treasury bonds: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
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In this episode we answer emails from Eric, Colin and Chris. We discuss the pros and cons of Interactive Brokers, the generally useless nature of private equity, David Stein's Asset Gardening approach, and stagflation. And that's the way it was and we liked it!
Links:
Correlation Analysis of Private Equity Fund (PSP): Asset Correlations (portfoliovisualizer.com)
Article about stagflation and the origin of the term: Stagflation Definition (investopedia.com)
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In this episode we answer emails from MyContactInfo, Nancy and Anderson. We discuss why I'm not writing a book any time soon, the performance stats on the Portfolios Page, when I might consider a simple annuity and why I don't like financial personality profiling, and the difficulties of adding leverage in portfolio downturns.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Money for the Rest of Us Podcast about Annuities: 279: Why All Retirees Should Consider an Income Annuity - Money For The Rest of Us - | Money For The Rest of Us
Immediate Annuities Website: Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com
Blue Zones Longevity Test: Live Longer, Better - Blue Zones
The Drive Podcast: The Peter Attia Drive Podcast - Peter Attia (peterattiamd.com)
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In this episode we answer emails from MyContactInfo, Jeff, Liah and Andrin. We discuss asset pricing models, the history of economics and Bogle's Cost Matter Hypothesis, Emerson and Foolish Consistencies and the FTSE All World GDP Weighted Index.
Links:
Self-Reliance: Self-Reliance: Change Your Life For The Better - Ralph Waldo Emerson (emersoncentral.com)
Self-Reliance Audio: Self-Reliance Ralph Waldo Emerson Audio Book - YouTube
FTSE All-World Index: GDP-Weighted-Paper.pdf (ftserussell.com)
ACWI Fund Page: iShares MSCI ACWI ETF | ACWI
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In this episode we answer emails from Julie T, Geordi and Justin. We discuss mechanisms for withdrawals from retirement portfolios, transitioning portfolios as you get close to retirement and the whys and hows of adding new investments to a portfolio.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
David Stein's Ten Questions to Master Investing for reference:
1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?
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In this episode we answer emails from Brian, Grant and MyContactInfo. We discuss rebalancing mechanisms and rules for various kinds of portfolios and the big discount brokers.
Links:
Optimized Rebalancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Brian's Golden Butterfly with Annual Rebalancing: Backtest Portfolio Asset Class Allocation Brian #1 (portfoliovisualizer.com)
Brian's Golden Butterfly with Rebalancing Bands: Backtest Portfolio Asset Class Allocation Brian #2 (portfoliovisualizer.com)
A Rebalancing Band Improvement on Those Two: https://tinyurl.com/2p8rm2ws
Grant's Leveraged Portfolio with Monthly Data: https://tinyurl.com/58wakx33
Grant's Google Spreadsheet: https://docs.google.com/spreadsheets/d/1Bz8uwpSYkMSaBZjc7vaF7nL7i5B4dKl7XyKXj2D3HVU/edit?usp=sharing
MyContactInfo Vanguard Link: What sets us apart from other asset management firms (vanguard.com)
Article re Schwab re Intelligent Investor Funds: Schwab to Pay SEC $186M Over ‘No Hidden Fee’ Claims for Cash-Heavy Robo | ThinkAdvisor
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In this episode we answer emails from Kirk, MyContactInfo and Holly. We revisit QREARX, Episode 179 and Correlation Metrics, and then we entertain Holly's requests for book recommendations. And I forgot to recommend "Money For The Rest Of Us" by J. David Stein in that segment.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
TIAA QREARX Summary: TIAA Real Estate Account
Risk Parity Books at Risk Parity Chronicles: Top 10 Risk Parity Resources: #10... Shahidi (2021) (riskparitychronicles.com)
"Taking Stock" by Jordan Grumet (Doc G): Taking Stock: A Hospice Doctor's Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life: Grumet, Jordan, Robin, Vicki: 9781646043545: Amazon.com: Books
"Money for the Rest of Us" book: Money for the Rest of Us: 10 Questions to Master Successful Investing: Stein, J. David: 9781260453867: Books (amazon.com)
RSA Animate Video: RSA ANIMATE: Drive: The surprising truth about what motivates us - YouTube
Prospecting Mimetic Fractals: The Lenses of Wisdom - Prospecting Mimetic Fractals
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In this episode we answer emails from Karen, Ron, Brian and Paul. We discuss shameless plugs for my family and friends and other considerations in selecting a financial advisor/manager, the full cycle of investing and Paul's value- and Iowa-focused portfolio.
Links:
Bridget Patel (better call her): Bridget Patel - Profile | Alliance of Comprehensive Planners Community (acplanners.org)
Values Added Financial: About Us – Values Added Financial
Holly Grosvenor: Microstuff.com - Financial coaching helping you and your family gain Financial confidence - Microstuff
Cody Garrett: Meet Cody - Measure Twice Financial
Kitces Interview of Cody Garrett: Using An Advice-Only Approach To Grow With DIY Validators (kitces.com)
OLIO Financial: OLIO Financial Planning (meetolio.com)
Kitces Interview of Andrew Miller: Replacing The AUM Fee With A Complexity-Based Fee (kitces.com)
Paul's Portfolio And Comparison: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we answer emails from George, Grant, Visitor #4090, Justin and Lili. We discuss the long-time usage and popularity of risk parity concepts by professional investors, a levered Golden Butterfly portfolio, the website chat function, Japan, crypto (a little) and consulting services. And my general laziness.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
AQR Paper "Understanding Risk Parity": Understanding Risk Parity (aqr.com)
Recent Cliff Asness Interview: Cliff Asness: Value Stocks Still Look Like a Bargain | The Long View (simplecast.com)
Risk Parity Chronicles Resource References: Resources - Risk Parity Chronicles
Grant's Levered Golden Butterfly Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
ETF Database -- Levered Funds: Leveraged Equity ETF List (etfdb.com)
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In this episode we answer emails from Andrew, Visitor #4691, Nate, and MyContactInfo. We discuss the new-age-old question about passive indexing and market efficiency, the intersection between the ideas of Max Planck and Ralph Waldo Emerson and how it applies to the development of ideas in portfolio construction, using ZROZ to tax-loss harvest TLT and observations about the promotion by the financial services industry of direct indexing and tax loss harvesting services.
Links:
Max Planck's Principle: Planck's principle - Wikipedia
Ben Carlson Article about Indexing: Who Owns All the Stocks & Bonds? (awealthofcommonsense.com)
Portfolio Charts Portfolio List: Portfolios – Portfolio Charts
Optimized Portfolios Lazy Portfolio List: 52 Lazy Portfolios and Their ETF Pies for M1 Finance (2022) (optimizedportfolio.com)
Risk Parity Chronicles Mega-Resources Pages: Resources - Risk Parity Chronicles
Perfect Portfolio book: In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest: Lo, Professor Andrew W: 9780691226446: Amazon.com: Books
White Coat Investor Tax Loss Harvesting Article: The Case Against Tax-Loss Harvesting | White Coat Investor
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In this episode we answer emails from Steve, Judy and Geordi. We discuss the data surrounding stock/treasury bond correlations back to 1952, when and why you might want to hold bonds and a process for figuring that out and my takes on The Simple Path To Wealth. With detours into prison jumpsuits, SpongeBob and Ray Liotta.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Flights To Safety Treasury Bond Correlation Paper: delivery.php (ssrn.com)
Choose FI "Role of Bonds in a Portfolio" podcast: The Role Of Bonds In A Portfolio | Ep 194 - ChooseFI
Kitces Four Phases of Investing Article: The Four Phases Of Saving For Retirement (kitces.com)
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In this episode we answer emails from MyContactInfo, the Nameless One, Jeff, Alexi (a/k/a Dude), and another Jeff. We talk about leveraged ETFs (briefly), thoughts about changes in the Global Monetary System, another portfolio site, ETFs KBWR and KBWP and efficient accumulation.
Links:
Ray Dalio's Latest Book: Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail - Kindle edition by Dalio, Ray. Politics & Social Sciences Kindle eBooks @ Amazon.com.
Lords of Finance Book: Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed | Goodreads
Lazy Portfolio Site: Lazy Portfolios and ETF composition (lazyportfolioetf.com)
Asset Correlations of KBWR and KBWP: Asset Correlations (portfoliovisualizer.com)
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In this episode we answer emails from Soo-New, Monika, Jeff and Jack. We discuss building out a risk parity portfolio in multiple accounts, the perils of membership in the Risk Parity Radio Club, the latest fads and gimmicks in Direct Indexing, how to consider and compare investing in different countries with Country Risk Factors and the intellectual perils of the Possibility Effect.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Country Risk Factors: Assess Country Risk (trade.gov)
Bailout Nation Book: Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy by Barry Ritholtz | Goodreads
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In this episode we answer emails from Jamie, Jean-Luc and Geordi. We discuss a paper about REITs as a separate asset class, what to do about struggling bond funds, the value of small-cap value and choosing a retirement portfolio in line with Bill Bengen's recommendations.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Jamie's Article -- Are REITs A Distinct Asset Class?: delivery.php (ssrn.com)
Correlation Matrix for Small Caps: Asset Correlations (portfoliovisualizer.com)
YouTube Video re Retirement Spending Calculator: Tutorial #1: Portfolio Charts Retirement Spending Calculator - YouTube
YouTube Video re Monte Carlo Simulator: Tutorial #4: Portfolio Visualizer Monte Carlo Simulator -- Introduction - YouTube
Risk Parity Isn't What You Think It Is: Corey Hoffstein: Risk Parity Isn't What You Think It Is - YouTube
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In this episode we answer emails from Andy, MyContactInfo and James The Flatterer. We discuss factor investing in detail, why it is better than prior approaches and how to use it, why using valuation methods is beyond the skills of most amateurs and financial advisors and more fun with Wisdom Tree Funds.
Links:
Factor Investing Article 1: Factor Investing Definition (investopedia.com)
Factor Investing Article 2: Factor investing - Wikipedia
Correlation Analysis of Golden Ratio Factor Funds: Asset Correlations (portfoliovisualizer.com)
The Current Portfolio of James: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we answer emails from Chas, Javen and Pankaj. We discuss using Berkshire Hathaway in a risk parity-style portfolio, Direxion mutual funds, taxable account considerations (again) and international stock funds (again).
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Direxion Mutual Funds: Direxion Mutual Funds | Direxion
Episode 27 Re Utilities: Podcast #27| Risk Parity Radio
Correlation Analysis Of Several International Funds: Asset Correlations (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we celebrate George's generosity and answer emails from Jeff, Kyle, Richard, Jamie and MyContactInfo. We discuss ulcer indexes and where to find them, leveraged ETFs and rebalancing, tag GDE again, have a lengthy frolic and detour into commodities funds and how they work, and rant a little more about the financial services industry.
Links:
The Father McKenna Center: Home - Father McKenna Center
Portfolio Charts Drawdown Calculator with Ulcer Index: DRAWDOWNS – Portfolio Charts
Optimal Rebalancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Bloomberg Commodity Index: Bloomberg Commodity Index - Wikipedia
Deutsche Bank Liquid Commodity Index: Deutsche Bank Liquid Commodity Index - Wikipedia
Commodities Fund Article: Investing in Commodity ETFs (investopedia.com)
ETF Database -- Commodities Funds: Commodities ETFs (etfdb.com)
Risk Parity Chronicles re Assets for Inflation: Best Asset Classes for Surviving Inflation: a test (riskparitychronicles.com)
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In this episode we answer emails from MyContactInfo (x2), Chris and Karen. We discuss annuities and conflicts in the financial services industry and why efficient solutions are disfavored, tax considerations for accumulation risk parity portfolios and the joys of budgeting.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Interview of Fairfax County Pension Investment Managers: 7 Allocator Series: Learnings from Fairfax County ft. Katherine Molnar and Andrew Spellar— April 6th, 2022 | Top Traders Unplugged
Monte Carlo Simulator At Portfolio Visualizer: Monte Carlo Simulation (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we answer questions from Doron, George, Eddie J. and Alexi (a/k/a "Duder"). We discuss the Macro-Allocation Principle and when to diversify your stock portfolio, what to do with dividends, experimenting with leveraged two-fund portfolios and options for investing in volatility and managed futures/trend following with the Dude.
We also talk about reaching 250,000 downloads and about what's happening over at Risk Parity Chronicles.
Links:
Johnny Ball and his Pentagram: Drawing an Egg (with a Pentagon) - Numberphile - YouTube
Risk Parity Chronicles post re Backtester Tool: Portfolio Backtest Shortcut Tool explainer (riskparitychronicles.com)
Risk Parity Chronicles tutorial: Screencast for Portfolio Backtest Shortcut Tool - YouTube
Risk Parity Chronicles Inflation Post: Best Asset Classes for Surviving Inflation: a test (riskparitychronicles.com)
The Dude's Proposed Dragon-Type Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
The Dude's Portfolio Correlation Analysis: Asset Correlations (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Paul, MyContactInfo, Alex and Marvin. We discuss Paul's sample portfolio construction, inherent conflicts of interest in financial media and the financial services industry, new Wisdom Tree Funds GDE and GDMN and more conflicts of interest from popular personal finance personalities involving day care centers and milk shake drinkers.
Links:
Portfolio Visualizer Analysis Of Paul's Portfolio: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Portfolio Charts Analyzer: MY PORTFOLIO – Portfolio Charts
Where Are The Customer's Yachts Book: Where Are the Customers' Yachts?: Or a Good Hard Look at Wall Street by Fred Schwed Jr. | Goodreads
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Mitchell, Alexi (Dude!), Brian and Daniel. We discuss how to identify similar funds for tax loss harvesting, concentrations and "bad decades", leveraged ETFs in accumulation, using risk-parity portfolios for intermediate accumulations, and withdrawing in retirement from a Golden Butterfly portfolio.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Portfolio Visualizer Asset Correlation Tool: Asset Correlations (portfoliovisualizer.com)
PHYS ETF page and description: PHYS Keep More of What You Earn (sprott.com)
Ben Felix Video About Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
Optimized Portfolio website: Optimized Portfolio - Investing and Personal Finance
"Buffett's Alpha" White Paper: Buffett’s Alpha (tandfonline.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Mike, John, Jeff, Wang, and Ray. We discuss recent performance of long-term treasury bonds and tax loss harvesting them, ValueStockGeek's Weird Portfolio (see episodes 113 and 126), borrowing against your portfolio at Interactive Brokers, how to understand criticism and not get caught up in spurious arguments and insults, and staying focused on we are actually trying to do here with advice from Bruce Lee and Ralph Waldo Emerson.
Links:
Weird Portfolio Article: The Weird Portfolio. How To Avoid Bubbles, Limit Drawdowns… | by Value Stock Geek
IRS Page on Form 4952: About Form 4952, Investment Interest Expense Deduction | Internal Revenue Service (irs.gov)
Perfect Portfolio book: In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest: Lo, Professor Andrew W: 9780691226446: Amazon.com: Books
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Michelle, Brian, Alan and MyContactInfo. We discuss transitioning from accumulation to decumulation, why TIPS suck (again), consumption smoothing in financial planning and the Allegory of the Cave applied to financial services and media.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Correlation Analysis of TIPs and Treasuries: Asset Correlations (portfoliovisualizer.com)
White Coat Investor Article: Consumption Smoothing is Stupid (whitecoatinvestor.com)
The Allegory of the Cave: Allegory of the Cave - Wikipedia
Early Retirement Extreme Book: Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence by Jacob Lund Fisker | Goodreads
Think Advisor Article With Bad Advice: Wade Pfau: TIPS and Annuities Good Bets When Inflation Is High | ThinkAdvisor
Support the show (https://www.riskparityradio.com/support)
In this episode we read a novella from Karen about how she is constructing her Golden Ratio-style retirement portfolio. Then we review expense and budgeting considerations, asset locations in multiple accounts, drawing down on a portfolio with ten-year IRAs and the basic options for managing asset sales and distributions. And a bit on REITs to boot!
Fear? That's the other retiree's problem!
Episode 160, where we answered Karen's initial question: Podcast 160| Risk Parity Radio
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Luis from Brazil, Paul, Alexi (His Dude-ness), and MyContactInfo (a different one). We discuss how to analyze Brazilian TIPs and other role-based assets, the trials and tribulations of treasury bonds, the oddly extraordinary performance of property and casualty insurance companies in times like these, tax considerations in fund-picking and what concentrations in particular stock fund sectors do in risk-parity portfolios.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Analysis of QQQ portfolio vs KBWP portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Risk Parity Chronicles blog and website: Risk Parity Chronicles
Support the show (https://www.riskparityradio.com/support)
In this episode we announce the roll out of the Risk Parity Chronicles blog and website from our listener Justin. We also address emails from MyContactInfo, Spencer, Satoshi and Andre. We discuss an interview of Eugene Fama about the war in the Ukraine, the ETF SAA (ProShares 2x Small Cap), the inherent problems with analyzing gold in a portfolio pre-1971 and related issues, and how to value a property to be inherited.
Links:
Justin's Risk Parity Chronicles blog and website: Risk Parity Chronicles
Summary of Eugene Fama Interview: Fama: It’s Putin who’s irrational, not the markets | The Evidence-Based Investor (evidenceinvestor.com)
Next Level Life Analysis of Golden Butterfly Portfolio: The Golden Butterfly Investing Strategy Explained (Most CONSISTENT Investing Strategy Ever?) - YouTube
Article Regarding the London Gold Pool of the 1960s: London Gold Pool - Wikipedia
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from Thomas, Karen and Jeffrey. We discuss high-performing two-fund portfolios, Bill Bengen and Michael Kitces missiles into the Deathstar's crystal balls and exhaust ports, Karen's portfolio management, an updated and improved shortcut tool for analyses at Portfolio Visualizer and Portfolio Charts, and a query about investing in energy sector stocks.
And THEN we scare you with our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
NTSX/GLD portfolio and comparison analysis: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Bill Bengen Critique of Morningstar Study: Is It Now the “3.3% Rule”? - Articles - Advisor Perspectives
Michael Kitces Critique of Morningstar Study: Can Morningstar's Withdrawal Rate Report Refute The 4% Rule? (kitces.com)
Karen's Mod to Mark's Most Excellent Portfolio Shortcutter Tool: Karen's update to Mark's Shortcutter - asset class support and older funds - Google Sheets
Portfolio Visualizer Energy Sector Analysis: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we begin with a rant about a Think Advisor article about what financial services is all about -- the PARTY CIRCUIT. And the we address emails from the Nameless One, Kyu, Brian and Eric. We discuss the original Permanent Portfolio and modifications to the Golden Butterfly portfolio, the tax feature of the Portfolio Visualizer Monte Carlo simulator, efficient allocations in taxable, tax-deferred and tax protected accounts, considerations surrounding expected returns of asset classes and the problems with cash drags in portfolio construction, and the BITW fund and alternatives.
Links:
Think Advisor article: How Advisors Do the Party Circuit | ThinkAdvisor
"Nimble Golden Butterfly" modifications: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Risk Parity Radio Tutorial Video re Portfolio Visualizer Monte Carlo Simulator: Tutorial #4: Portfolio Visualizer Monte Carlo Simulator -- Introduction - YouTube
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from Julie T., Julie H. Jeff and Colin. We discuss the automated trading platform Composer, places to learn about crypto and NFTs, the growth factor in equities, the fund PRWCX, a modified Golden Butterfly portfolio, and using ABLE accounts for the "family match".
And THEN we scar you with our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
The Composer website: Composer – Automated trading platform.
Modern Finance podcast: Modern Finance – MoFi
Proof podcast re NFTs: PROOF
Bitcoin Fundamentals podcast: Bitcoin Fundamentals: A Podcast on Bitcoin - The Investor's Podcast Network (theinvestorspodcast.com)
Portfolio Visualizer Growth Fund/Total Stock Fund Correlations: Asset Correlations (portfoliovisualizer.com)
PRWCX vs. Golden Ratio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Colin's Modified Golden Butterfly: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we give a shout out to our listeners in Ukraine and answer emails from Darren, Jeffrey and Ron. We discuss World Central Kitchen, comparison tools for non-U.S. funds, the Portfolio Visualizer Financial Goals tool, shorter-term use of risk parity portfolios, the disgusting problem of unwinding poorly performing annuity products and some customized risk-parity style portfolios.
Links:
World Central Kitchen charity for Ukraine: World Central Kitchen (wck.org)
Marketwatch example of non-U.S. fund: VWRL | Vanguard FTSE All-World ETF Advanced Charts | MarketWatch
Portfolio Visualizer Financial Goals analysis tool: Financial Goals (portfoliovisualizer.com)
Ron's Custom Portfolios: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails and messages from Nathan, Michael, MyContactInfo and Visitor 5225. We discuss correlations of international funds vs. small cap value funds, new international small cap value funds, the plusses and minuses of the Accelerated Permanent Portfolio, Aswath Damdaran and the follies of dividend investing, and my email address. Whoa!
And THEN we look at monthly distributions and returns of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
International and small cap value correlation analysis: Asset Correlations (portfoliovisualizer.com)
Bogleheads Podcast Featuring Eduardo Repetto: Episode 43: Bogleheads on Investing – guest Eduardo Repetto, host Rick Ferri – Rick Ferri, CFA
Video Lecture of Aswath Damodaran re Dividends: Damodaran on Dividends - YouTube
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from Chris, Kevin from Canada, Davis, Amy and Mark. We discuss RPAR's performance issues, A Canadian Anti-Beta ETF and academic analysis of those strategies, using utilities in the Golden Ratio portfolio, frontier markets and international factor funds, decumulation mechanisms and the Golden Ratio sample portfolio, and DFA-like funds.
And THEN we put you to sleep with our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
RPAR Fact Sheet: RPAR Risk Parity ETF (rparetf.com)
Anti-Beta Strategies Paper: Microsoft Word - BettingAgainstBeta - 20101129.doc (nber.org)
FM/EEM Correlation Analysis: Asset Correlations (portfoliovisualizer.com)
DFA ETFs table: Dimensional ETFs
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from Brandon, Scot, Junior, Tony and Chris. We address using leverage in accumulation portfolios, thanks to Scot, how QYLD resembles a 1987 Chrysler LeBaron, the UPRO stock split (again), and sources of gold data.
Links:
Ben Felix Video About Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
AQR Paper About Leverage: Alternative Thinking Why Do Most Investors Choose Concentration Over Leverage.pdf
Portfolio Visualizer Destruction of QYLD: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
The 1987 Chrysler LeBaron Convertible: 1987 Chrysler LeBaron Indy Pace Car Convertible - YouTube
Chris's Bogleheads Link: Simba's backtesting spreadsheet - Bogleheads
Support the show (https://www.riskparityradio.com/support)
In this episode we attend to emails from Justin, Mycontactinfo, Ron, Bastian and Dustin. We discuss the UPRO stock split, Dan Pink's Drive and flow states, Laurence Kotlikoff books and the nature of reality and uncertainty, having a look at PICK and EWD, and more variations on the Golden Ratio portfolio.
And THEN we put you to sleep with our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Mark's Cool Portfolio Shortcutter Tool: https://docs.google.com/spreadsheets/d/1lG18XrJA8-oODSNC0nV2T5nyVPAByU7p901oYn_ECDw/edit#gid=1553040997
RSA Animate "Drive" video: RSA ANIMATE: Drive: The surprising truth about what motivates us - YouTube
Kotlikoff's latest book: Money Magic: An Economist’s Secrets to More Money, Less Risk, and a Better Life: Kotlikoff, Laurence: 9780316541954: Amazon.com: Books
The Rise of Superman book: The Rise of Superman: Decoding the Science of Ultimate Human Performance by Steven Kotler | Goodreads
The Art of Impossible book: The Art of Impossible: A Peak Performance Primer by Steven Kotler | Goodreads
Correlation Analysis of PICK and EWD: Asset Correlations (portfoliovisualizer.com)
FXIFX vs. Golden Ratio Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we give Mary a break and analyze the ProShares Ultrapro S&P500 ETF, ticker symbol UPRO, using David Stein's Ten Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
This fund analysis was suggested/requested by listener Anderson.
Links:
UPRO Fact Sheet: Prosharesfactsheetupro.pdf
UPRO Summary Prospectus: UPRO_summary_prospectus.pdf (proshares.com)
UPRO Semi-Annual Report: Report 11-30-2021 (proshares.com)
Leveraged Funds And How They Work: What Is a Leveraged ETF and How Do They Work? (optimizedportfolio.com)
Nine Best Leveraged Funds Article: The 9 Best Leveraged ETFs To Enhance Portfolio Exposure (2022) (optimizedportfolio.com)
Leverage Generally And Links To Sample Levered Portfolios: Leverage | Optimized Portfolio
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Julie T, Justin, Jeffrey, Anderson and the mysterious Mycontactinfo. We discuss Golden Ratio modifications, TIPs vs. commodities and stocks for inflation YTD, asset roles in Risk Parity Portfolios, volatility funds, the good, bad and ugly of dividend investing, ideas for future episodes and Professor Lo's new book (again).
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Golden Ratio Portfolio with Utilities: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Money For The Rest of Us Podcast Episode #374: Lifecycle Investing, Risk Parity Portfolios, and Why Stocks Are Riskier in the Long Run
Money For The Rest of Us Podcast Episode #306: Three Approaches to Asset Allocation | Money For The Rest of Us
Jeffrey's Link re Dividend Investing: Dividend Millionaires - The Compound Investor
Dividend Collapses Article: The Biggest Dividend Stock Collapses of All Time - Dividend.com
Link To Podcast With Professor Lo: Andrew Lo: Finding the Perfect Portfolio--a 'Never-Ending Journey' | Morningstar
Support the show (https://www.riskparityradio.com/support)
In this episode we answer questions from Steve, Alexi, Mycontactinfo and Brandon. We discuss choosing REITS better than you might with a REIT fund, "inflation winners and losers", the new "In Pursuit of the Perfect Portfolio" book, and the preferred shares fund PFF.
Links:
VNQ holdings: VNQ - Vanguard Real Estate ETF | Vanguard
NAREIT REIT Sectors: REIT Sectors | Nareit
REIT correlation matrix: Asset Correlations (portfoliovisualizer.com)
Alexi's Article on Assets that Benefit from Inflation: What Works When Inflation Hits? | Man Institute | Man Group
Perfect Portfolio book link: In Pursuit of the Perfect Portfolio | Princeton University Press
Support the show (https://www.riskparityradio.com/support)
In this episode we answer questions from Alexi, Vaughn, Yamini, Jamie (x2) and Adam. We discuss merger arbitrage as an asset class, the Macro-Allocation Principle applied to an accumulation portfolio, the benefits of investing in insurance companies, tail risk parity and the my favorite science paper and considerations about the lack of really old data.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Alexi's podcast reference: Why Merger Arb Works (aqr.com)
Alexi's correlation analysis of merger arbitrage funds: Asset Correlations (portfoliovisualizer.com)
Artemis Capital Research Page: Research & Market Views — Artemis (artemiscm.com)
Artemis Hawk and Serpent Paper: DocSend
Correlation Analysis of Insurance ETFs: Asset Correlations of KBWP (portfoliovisualizer.com)
Tail Risk Parity Paper: Tail Risk Parity (alliancebernstein.com)
More Is Different Science Paper: anderson72more_is_different.pdf (tamu.edu)
Kitces Article re 4% Rule: Can Morningstar's Withdrawal Rate Report Refute The 4% Rule? (kitces.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from Rory (x2), Frank, Andy and Mark. We discuss UPRO issues, where to put gold, role models for retirement, Andy's experiments with UPAR and Mark's wonderful new tool and options strategies for reducing stock market risk.
Links:
Kitces Analysis of Morningstar Safe Withdrawal Rate Report: Can Morningstar's Withdrawal Rate Report Refute The 4% Rule? (kitces.com)
Andy's UPAR Bogleheads Forum Link: The Tobin Two-Fund Portfolio - Bogleheads.org
Mark's Most Excellent Portfolio Shortcutter Tool: https://docs.google.com/spreadsheets/d/1lG18XrJA8-oODSNC0nV2T5nyVPAByU7p901oYn_ECDw/edit#gid=1553040997
A famous stand-up philosopher: A Standup Philosopher - YouTube
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Jeff (x2), Popeye, and the anonymous Mycontactinfo (x2). We discuss some feeble attempts at disparagement by former financial media people and put them in context, an essay on taking your money off the table and weathering financial downturns by Bill Bernstein and an free course from MIT.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
The Bernstein Essay: A Day to Remember - HumbleDollar
The MIT Course with Andrew Lo: Course | Adaptive Markets: Financial Market Dynamics and Human Behavior | edX
Support the show (https://www.riskparityradio.com/support)
In this episode we give Mary a break and analyze the ProShares Ultrashort Australian Dollar ETF, ticker symbol CROC, using David Stein's Ten Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
This fund analysis was suggested/requested by listener Alexi/Dude.
Links:
CROC Fact Sheet: prosharesfactsheetcroc.pdf
CROC Information Page: CROC (proshares.com)
CROC Correlation Analysis: Asset Correlations with CROC (portfoliovisualizer.com)
CROC/BTAL in Golden Butterfly Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
CROC/BTAL in Golden Ratio Portfolio: https://tinyurl.com/2tcemax6
CROC/BTAL in Leveraged Risk Parity Portfolio: https://tinyurl.com/3w7rpk6d
Support the show (https://www.riskparityradio.com/support)
In this episode we pay tribute to Clark Bender and then answer emails from Chris, Roy, Dustin, Daniel and Kevin. We discuss M1 trading issues, PDBC's 2021 returns, reinvesting dividends, sample portfolio returns, what to do about old stocks lying around, Dustin's sample risk parity portfolio, I-bonds, considerations for international funds, Tom Waits, and an improvised reading list.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Board Game Times podcast: Welcome to Board Game Times! - Board Game Times
RPR Tutorial #4: Tutorial #4: Portfolio Visualizer Monte Carlo Simulator -- Introduction - YouTube
PDBC Performance Statistics: Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) Performance History - Yahoo Finance
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from "Harry", Anderson, Brian and Alan. We discuss transitioning a mostly crypto portfolio to retirement, stablecoins, rebalancing bands, 3-5% flexible withdrawal strategies, MORE stablecoin questions and the basics of transitioning from an accumulation portfolio to a retirement portfolio.
Links:
Optimal Rebalancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Never Pay Taxes Again Article: Never Pay Taxes Again - Go Curry Cracker!
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from Patreon Patron Dominic, Javier, Sebastien, David and Ed. We discuss allocating a Golden Butterfly - style portfolio, an application of the Macro-Allocation principle to an accumulation portfolio, a potential gambling problem involving leveraged funds, the psychology of avoiding foolish consistencies and the financial media, and applications of the Monte Carlo simulator and Portfolio Visualizer and the calculators at Portfolio Charts to small cap value based portfolios.
Links:
Portfolio Visualizer Monte Carlo #1 (small cap value): Monte Carlo Simulation #1 (portfoliovisualizer.com)
Portfolio Visualizer Monte Carlo #2 (diversified portfolio): https://tinyurl.com/2cjfu5vr
Portfolio Visualizer Monte Carlo #3 (de-leveraged small cap value): https://tinyurl.com/2p89vxpn
Portfolio Charts: MY PORTFOLIO – Portfolio Charts
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Dan, Chas and Sam. We discuss some aspects of a new Risk Parity book, the poor performance and problems with TIPs, sub-portfolio constructions, using a correlation analysis to determine which non-U.S. funds to use, which bond funds to use, why you shouldn't pay attention to proposed legislation, more on international funds and how to find the podcast where your email is answered.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio. We also review the lackluster annual performances of RPAR and other professional risk-parity style funds. Note that RPAR is run by the author of the book discussed in answer to the first question.
Additional links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Commodity Producers ETFs list: Commodity Producers Equities ETFs (etfdb.com)
Original RPAR Episode: Podcast #31| Risk Parity Radio
Correlation Analysis of Chas's Proposed Funds: Asset Correlations (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we invite listener Alexi into the den to discuss a variety of topic on his mind. These include gold, municipal bond fund TFI, assorted risk-parity portfolio constructions, the Big Lebowski, gambling problems and leveraged funds, choices in small cap value funds, problems with the M1 platform and liquidity issues, the relationship between the traditional 60/40 portfolio and the Golden Ratio, asset classes that perform well in various growth/inflation quadrants, and the drawbacks to TIPS and other inert allocations.
Links:
Episode 40 re Gold: Podcast #40| Risk Parity Radio
Safe Withdrawal Rate #34 re Gold: Using Gold as a Hedge against Sequence Risk – SWR Series Part 34 – Early Retirement Now
Three Ingredients Article re Gold: Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts
Resolve Asset Management White Paper Download Link: Return Stacking: Strategies For Overcoming a Low Return Environment (investresolve.com)
"Buffett's Alpha" White Paper: Buffett’s Alpha (tandfonline.com)
Alexi's article link (last question) re Quadrants and Assets: Structural Diversification for All Seasons - ReSolve Asset Management (investresolve.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Christer, Craig and Scott. We discuss synthetically modelling SWAN on Portfolio Visualizer, how using the MAR metric (and others) reveals superior performance for risk-parity-style portfolios, how NOT to predict future treasury bond rates in the context of the Golden Butterfly portfolio, and the foolish consistencies and nonsensical ravings of those who attempt such things.
And THEN we our go through our weekly and monthly (and a bit of annual) portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional Links:
Comparison of Synthetic SWAN Models: SWAN Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Craig's Article About The MAR Metric: How to Set achievable CAGR & Drawdown targets for stock portfolio (enlightenedstocktrading.com)
Comparison of VWENX and Sample Golden Ratio Portfolios: Backtest VWENX Vs. Golden Ratio Asset Allocations (portfoliovisualizer.com)
Additional Sample Leverage Portfolio On M1: Levered Risk Parity Pie | M1 Finance
Support the show (https://www.riskparityradio.com/support)
In this episode, we answer emails from Adam, Amit, Jeffrey and Kevin. We discuss alternative theoretical withdrawal strategies and tools to model them, practical considerations for withdrawals, milkshakes, the differences between the sample portfolios and their withdrawal percentages, Torqemada, modeling leveraged accumulation portfolios, the ups and downs of growth funds and value funds, and Kevin's desires for More Cowbell.
Links:
Monte Carlo simulation with a life expectancy withdrawal strategy: Monte Carlo Simulation (portfoliovisualizer.com)
Portfolio Charts Retirement Spending Calculator: RETIREMENT SPENDING – Portfolio Charts
YouTube Tutorial For Retirement Spending Calculator: Tutorial #1: Portfolio Charts Retirement Spending Calculator - YouTube
Ben Felix Video On Using Leverage: Investing With Leverage (Borrowing to Invest, Leveraged ETFs) - YouTube
Portfolio Visualizer Simulated Accumulation In Three Portfolios: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Sample M1 Leveraged Portfolio (and others): M1 Pies: Manage and Optimize Your Portfolio Like a Pro (choosefi.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from Alexi, Ron, Niklas, Jody and Brian. We discuss levered portfolios, Spinal Tap, the fabulous generosity of our listeners, currency risk, website data improvements, and options for a 20-something with or without leverage.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
REIT Episodes: Podcast #19 and Podcast #21| Risk Parity Radio
Mega REIT Correlation Matrix: Asset Correlations -- lotsa REITS
Simplify SPYC ETF: SPYC Simplify US Equity PLUS Convexity ETF | Simplify
Alexi's Leveraged Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Alexi's Portfolio Correlation Matrix: Asset Correlations (portfoliovisualizer.com)
Unicorn Bay Correlation Analyzer: Asset Correlations for Free | Unicorn Bay
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Spencer, Hannalore, Keith and Claire. We discuss a new article at Portfolio Charts, leveraged intermediate treasury bonds and their possibilities and implications, and invitations for ads.
Links:
Ingredients Article: Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts
Bias-Variance Dilemma Episodes: Podcast #49| Risk Parity Radio; Podcast #64| Risk Parity Radio; Podcast #66| Risk Parity Radio
Hannalore's Seeking Alpha Article: TYA: A Better Version Of TLT And My Top Fixed-Income Pick (NASDAQ:TLT) | Seeking Alpha
TYA Fund Page: TYA Simplify Risk Parity Treasury ETF | Simplify
Portfolio Visualizer Analyzer Analysis of TYD: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Keith's Bogleheads Forum Link: Modified versions of HFEA with ITT and Futures / Lifecycle Investing with Modern Portfolio Theory - Bogleheads.org
Keith's Beta Article Link: Betting against Beta (and Gamma) Using Government Bonds - Federal Reserve Bank of New York - FEDERAL RESERVE BANK of NEW YORK (newyorkfed.org)
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Mark B, Matt, Kevin, Arun and Danny. We discuss GBTC, my idiosyncrasies, the G-Fund in the TSP, SWAN and More Cowbell, the mechanics of using a risk-parity portfolio for intermediate accumulation, a 3 liter bottle of Chianti, and the limitations of the data set in portfolio visualizer.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio and zero in on the diversification benefits of the Risk Parity Ultimate portfolio.
Additional Links:
TSP G-Fund: G Fund composition | Thrift Savings Plan (tsp.gov)
Episode 123 re additional SWAN analysis: Podcast #123 | Risk Parity Radio
Portfolio Charts Article About March 2020 Portfolio Performances: Asset Allocation in the Most Painful Month – Portfolio Charts
Support the show (https://www.riskparityradio.com/support)
In this episode we answer questions from Stephen (Superb Diamond Range), Alan, Chris, Neil, and Esek. We discuss my limitations, the failings of my podcast, the crypto-currency PAXG, using leveraged ETFs for accumulation and the latest in the Risk Parity Radio YouTube Tutorials. Enjoy!
Links:
ChooseFI M1 Levered Risk Parity Portfolio: Experimental RPR Lever | M1 Finance
Introduction to the Accelerated Permanent Portfolio: Episode #8 | Risk Parity Radio
Introduction to the Aggressive Fifty Fifty Portfolio: Episode #10| Risk Parity Radio
Introduction to the Levered Golden Ratio Portfolio: Episode #103 | Risk Parity Radio
New YouTube Tutorial: Tutorial #3: Portfolio Visualizer Asset Allocation Backtester - YouTube
Support the show (https://www.riskparityradio.com/support)
In this episode, first off we address emails from Patrick, Frank, Hannelore, Peter, and Thomas and Angela. We discuss allocating the Golden Ratio sample portfolio at M1 Finance, minimum meaningful allocations to gold and treasury bonds, where we find Safe Withdrawal Rate calculations and how to buy the Risk Parity Radio NFTs.
And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
Additional Links:
M1 Golden Ratio Sample Portfolio: Golden Ratio | M1 Finance
Falling Upward: Falling Upward: A Spirituality for the Two Halves of Life by Richard Rohr | Goodreads
Portfolio Charts SWR Calculator: WITHDRAWAL RATES – Portfolio Charts
Michael Kitces Interview: An Interview With Michael Kitces - Motley Fool Answers | The Motley Fool
Peter's Instructions for destroying the Death Star:
-
I put ETH into my Coinbase Wallet (the Coinbase Wallet app is separate from a regular Coinbase account)
-
Clicked purchase on the NFT in OpenSea, which provides a QR code
-
Scanned the code with the Wallet app, which initiated the multi step process to transfer the ETH to Polygon, this is where the gas charges are paid
-
Once the transfer is done there were a couple of more steps between OpenSea and the Wallet app and the purchase was complete
Thomas's Instructions for destroying the Death Star:
1) I went to the Risk Parity Radio NFT openseas page, then activated the google chrome extension Metamask to purchase ETH(polygon). They use Moonpay as the platform to take care of the transaction (they also require a picture of your driver's license and selfie for "security purposes")
2) I purchased 30$ minimum which charges $3.99 for this transaction.
3) My first attempt was flagged on my debit card (Wells Fargo, had to approve Moonpay) Second transaction went through and within 1 minute I could see ETH(polygon) in my Metamask wallet.
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Justin, David, Paul, Ted and "Mycontactinfo". We discuss the new LifeGoal risk-parity based funds and other commercial concoctions, my availability for consulting, our awesome audience, dealing with a 457b Top Hat Plan and the theoretical underpinnings of most things in the universe, including financial markets.
Links:
LifeGoal Funds Page: About LifeGoal Investment (lifegoalinvestments.com)
Comparison Analysis of AQRIX: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
IRS Top Hat Plans Page: Non-Governmental 457(b) Deferred Compensation Plans | Internal Revenue Service (irs.gov)
"Misbehavior of Markets" Book: The (Mis)Behavior of Markets by Benoît B. Mandelbrot | Goodreads
YouTube Mandelbrot Set Video: Eye of the Universe - Mandelbrot Fractal Zoom (e1091) (4k 60fps) - YouTube
"More Than You Know" Book: More Than You Know | Columbia University Press
"Risk Savvy" Book: Risk Savvy: How to Make Good Decisions by Gerd Gigerenzer | Goodreads
Propecting Mimetic Fractals: The Fractal Lens - Prospecting Mimetic Fractals
Support the show (https://www.riskparityradio.com/support)
In this Barry-Barry-nice episode, we address an email from "Mandy" about her transition to retirement. We discuss minimizing the taxes with long-term capital gains rates, a proposed NTSX-based portfolio, preferred shares funds and how to think about setting your personal withdrawal rate in a flexible way that matches your actual expenses.
Links:
NTSX-Based Portfolio Analyses: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Article re Preferred Shares Funds: Preferred Stock ETFs: Taking A Closer Look At PFFD, PFFR, PSK | Seeking Alpha
PFFV Fund Page: Variable Rate Preferred ETF (globalxetfs.com)
Risk Parity Radio YouTube Channel: Risk Parity Radio - YouTube
Support the show (https://www.riskparityradio.com/support)
In this episode we celebrate our latest patron Jake, announce our latest YouTube Tutorial, and then get to some emails from Ben, Andy and Keith, where we discuss accumulation portfolios and transitions, Andy's mania for Risk Parity Radio NFTs and what to do about ONL.
Then we finish up with our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio and look at the textbook performance of treasury bonds on Friday.
Additional Links:
New Tutorial on Portfolio Visualizer Backtester: Portfolio Visualizer Ticker Symbol Backtester Tutorial - YouTube
New Crypto Access at Interactive Brokers: Trade Crypto for Less Coin | Interactive Brokers LLC
Risk Parity Radio NFTs at Opensea!: Risk Parity Radio - Collection | OpenSea
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Stephen, James, Randy and David. We address a proposed 70/20/10 portfolio construction, rebalancing UPRO/TMF portfolios, portfolio constructions with trading strategies, and potential future rants.
Then we discuss our NFT experiment, what you might consider for Giving Tuesday and Lessons and Carols.
Links:
Stephen's Interview of Me: Superb Diamond Range: Frank Vasquez of Risk Parity Radio (The Financial Series) | #49 | Risk Parity Investing | podcast | superb diamond range on Apple Podcasts
Gold Episodes: Podcast #12 and Podcast #40| Risk Parity Radio
Portfolio Charts Portfolio Analyzer: MY PORTFOLIO – Portfolio Charts
Randy's website: Dual Momentum Systems
Bias-Variance Dilemma Episode: Podcast #49| Risk Parity Radio
Money For The Rest Of Us BITO Episode: Should You Invest in a Bitcoin ETF? | Money For The Rest of Us
Polygon Network Links: Polygon
Father McKenna Center Giving: Donate - Father McKenna Center
Father McKenna Center Lessons and Carols Program: Lessons and Carols - Father McKenna Center
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Anderson, Brad, David, Ana and Christy. We discuss I-bonds vs. TIPS, John Kimble, Portfolio Builder, Steve Van Metre and new-fangled ETFs, and Uncle Frank's advice to newer investors. Then we finish up with our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
Additional Links:
I-Bonds vs. TIPS Article: I Bonds vs. TIPS: What’s the best bet for inflation protection? | Treasury Inflation-Protected Securities (tipswatch.com)
I-Bonds Episode: Podcast Episode #93 | Risk Parity Radio
One of the TIPS Episodes: Podcast Episode #78| Risk Parity Radio
Portfolio Builder Sensational Video From April 2020: Greatest Stock Crash In History Ahead Build This Portfolio ASAP - YouTube
Meb Faber Podcast Re Levered Risk-Parity Style Portfolios (re-labelled "Return Stacking"): Episode #368: Rodrigo Gordillo & Corey Hoffstein, “You Now Get To Have Your Beta Cake While Eating Your Alpha Too" - Meb Faber Research - Stock Market and Investing Blog
Support the show (https://www.riskparityradio.com/support)
In this episode we, ahem, "address" a recent attempt by Morningstar to predict the future returns and performance of markets for the next 30-40 years using a bag of crystal balls and their conclusions about safe withdrawal rates.
Links:
The Report in Question: State-of-retirement-income.pdf (morningstar.com)
The Data They Should Have Been Using: Diversification_Landscape_033021v2.pdf (morningstar.com)
The Track Record Of These Methodologies According To Morningstar: Your Forecasts for Stock and Bond Returns (2011)| Morningstar
And a nice tax advisor: The FI Tax Guy (Sean Mullaney)– Tax, Financial Independence, and Fun
Support the show (https://www.riskparityradio.com/support)
In this email we answer emails from John, Gary, Chuck, PJ, Dave and Brandon. We discuss crystal-ball-laden catastrophes, modern alternative asset fund opportunities, help with the Portfolio Visualizer calculators, my recent absence, my lack of written output, Roth 401k and IRAs.
Links:
Big Ern Sequence of Return Series #34 and Comments: Using Gold as a Hedge against Sequence Risk – SWR Series Part 34 – Early Retirement Now
Episode 40 re Gold: Podcast #40 | Risk Parity Radio
Episode 70 re CAPEd Crystal Balls: Podcast #70 | Risk Parity Radio
Gary's Links to Private Alternative Asset Funds: Hedonova and https://orthogonalglobal.com
Chuck's Older Fund Identifications for Portfolio Visualizer: . NAESX - Small Cap; VFITX - Intermediate Treasuries; VUSTX - Long Term Treasuries; VFINX - S&P 500; and ^gold - Gold. Sector Funds: FSUTX - Utilities; FSRBX - Banks; FIDSX - Financial Services; FRESX - REIT; FSPHX - Healthcare; FIREX - Intl. Reit; FSDPX - Materials; FCYIX - Industrials; FSENX -Energy; FDFAX - Consumer Staples; FSCPX - Consumer Discretionary; and FSPTX - Tech.
Portfolio Visualizer Asset Backtester: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we answer a trifecta of questions from Christopher and emails from JonB and Value Stock Geek. We discuss accumulation, dollar-cost averaging, a Bridgewater paper, calculating withdrawals from the sample portfolios and the Weird Portfolio.
And then we go to our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
And then we crawl back in the morass of our NFT experiment.
Additional links:
Bridgewater Paper from Episode 49: 2009.12 AW Info Pack.doc (granicus.com)
Kitces Four Phases of Investing Article: The Four Phases Of Saving For Retirement (kitces.com)
Bogleheads Tool and Data: Simba's backtesting spreadsheet [a Bogleheads community project] - Page 25 - Bogleheads.org
Value Stock Geek Portfolio: The Weird Portfolio. How To Avoid Bubbles, Limit Drawdowns… | by Value Stock Geek
Opensea Polygon Transfer Instructions/Links: How do I find my funds on Polygon? – OpenSea
EconoMe Conference: EconoMe Conference - Nov 13th & 14th, 2021
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Paul, Mike, Brett, Yarrow and Peter. We discuss a Levered All Seasons Portfolio, an investment in BIP, closed-end funds and issues with GAA. We also address Peter's issues with trying to buy a Risk Parity Radio NFT.
Links:
Optimized Portfolio Article about the Levered All Seasons: Ray Dalio All Weather Portfolio Review, ETF's, & Leverage (optimizedportfolio.com)
Paul's Levered All Weather M1 Pie: Paul's Portfolio | M1 Finance
Correlation Analysis for BIP: Asset Correlations (portfoliovisualizer.com)
Golden Ratio Portfolio using BIP: BGR Portfolio With BIP (portfoliovisualizer.com)
Correlation Analysis for GAA Components: Asset Correlations (portfoliovisualizer.com)
GAA vs. Golden Butterfly and Golden Ratio: https://tinyurl.com/y4fvrfmp
Support the show (https://www.riskparityradio.com/support)
In this episode we start by answering emails from Melanie, David, Jeffrey and Richard about Schwab ETF alternatives, Mary Mary, the financial podcasts I listen to, sector and other stock funds in the context of the Holy Grail and Macro-Allocation Principles, leveraged bond funds and the whys of the bonds we use in the sample portfolios. One additional excellent personal finance podcast I neglected to mention is The Earn & Invest Podcast (earnandinvest.com) with Doc G.
Then we roll out some Risk Parity Radio NFTs (non-fungible tokens), which you may acquire through the support page of the website at Support | Risk Parity Radio or here: Risk Parity Radio - Collection | OpenSeas
After that we go to our weekly and monthly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
Additional links:
Flight to Safety Research Paper About Treasuries: delivery.php (ssrn.com)
Our Three Principles of Portfolio Construction: Episode 7 | Risk Parity Radio
REIT Funds Episodes: Episode 19 | Risk Parity Radio and Episode 21 | Risk Parity Radio
Utilities Funds Episode: Episode 27 | Risk Parity Radio
Preferred Shares Fund Episode: Episode 9 | Risk Parity Radio
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Visitor 3050, Daniel, Chet, Jack, Jeff and Marc. We discuss risk-reward metrics and where to find them, corrections to modelling SWAN, using asset class analyzers, "bracketed rebalancing", adding gold to a portfolio and the bond breakdown of NTSX.
Links:
Portfoliocharts Risk and Return Analyzer: RISK AND RETURN – Portfolio Charts
Daniel's Portfoliovisualizer Analysis of SWAN: SWAN Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
SWAN compared with a 45/80 portfolio: Revised SWAN Backtest Portfolio (portfoliovisualizer.com)
Optimized Portfolio Article re SWAN: SWAN - A Review of the Amplify BlackSwan ETF for Downturns (optimizedportfolio.com)
Optimized Portfolio Article re NTSX: NTSX ETF Review - WisdomTree U.S. Efficient Core ETF (90/60) (optimizedportfolio.com)
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In this episode we answer emails from EJ, J Allen, Paul, Hoarseman, Larry and Anderson. We discuss bitcoin funds, the Callan Periodic Table, transitioning your portfolio to decumulation, I-bonds, a momentum strategy and becoming a financial planner/advisor.
Links:
Updated Kiplinger article re (now 12) crypto-currency funds: 12 Bitcoin ETFs and Cryptocurrency Funds You Should Know | Kiplinger
Larry's Link Re Momentum Strategy: Accelerating Dual Momentum Investing – engineered portfolio
Millionaires Unveiled Podcast Episode featuring a Financial Advisor: 208: Net Worth of 5M – 2.5M in Tesla Stock (millionairesunveiled.com)
Money Guy Episode re Choosing Financial Advisors: How and When to Hire a Financial Advisor! - YouTube
Michael Kitces Podcast For Financial Advisors: About the Financial Advisor Success Podcast by Michael Kitces
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In this episode we answer emails from Julie, Pat, Craig, Chris and Matt, in which we discuss the Retirement Spending Calculator at Portfoliocharts, leveraged portfolios and ETFs in taxable and tax-protected accounts, crypto-fund alternatives, risk parity research and articles, and asset location in Roth vs. taxable.
And THEN And then we go to our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
Additional Links:
The Retirement Spending Calculator Tutorial is here (added November 2): Retirement Spending Calculator Tutorial - YouTube
Retirement Spending Calculator: RETIREMENT SPENDING – Portfolio Charts
ChooseFI/M1 Experimental Risk Parity Portfolio: M1 Pies: Manage and Optimize Your Portfolio Like a Pro (choosefi.com)
Kiplinger Article Re 11 Crypto-Funds: 11 Bitcoin ETFs and Cryptocurrency Funds You Should Know | Kiplinger
Episode 5 and Links to Articles: Podcast 5| Risk Parity Radio
Episode 7 and Links to Videos: Podcast 7| Risk Parity Radio
AQR Risk Parity Article: Understanding Risk Parity (aqr.com)
Bridgewater Site: Research & Insights — Bridgewater Associates
Bonus Panagora Article from earlier episode: PanAgora-Risk-Parity-Portfolios-Efficient-Portfolios-Through-True-Diversification.pdf
Episode 93 re I-bonds: Podcast 93 | Risk Parity Radio
Treasury Direct Website: Individual - Buying Series I Savings Bonds (treasurydirect.gov)
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In this episode we address the seemingly intentional friction imposed by the financial services industry preventing us from moving our own retirement accounts around. Then we tackle emails from Jay, Andrew, Dave (x2) and Justin about Vanguard funds, Mel Brooks and quadruple-witching days, cockroach portfolios and the bias-variance dilemma, and modelling low-volatility funds.
Partial list of useful Vanguard ETFs:
Total Market: VTI
Large Cap Growth Stocks: VUG
Small Cap Value Stocks: VIOV or VBR
REITs: VNQ and VNQI (International)
Utilities: VPU
Long-Term Treasury Bonds: VGLT and EDV (extended duration)
Intermediate-Term Treasury Bonds: VGIT
Short-Term Treasury Bonds: VGSH
There do not appear to be any good Vanguard fund options for investing in gold, commodities, preferred shares, volatility, crypto-currency-related assets or leveraged stock and bond funds.
Morningstar Long View Podcast with Rick Bookstaber: Rick Bookstaber: Avoiding Complexity Is 'Risk 101' | Morningstar
Analysis of commodities fund COM: Podcast 99| Risk Parity Radio
Risk vs. Uncertainty Discussions: Podcast 64| Risk Parity Radio and Podcast 66| Risk Parity Radio
The Bias-Variance Dilemma: Podcast 49| Risk Parity Radio
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In this episode we answer questions from Joel, Javen, Bradley and Brian. We discuss leveraged portfolios, GOLD, the BTAL episode, accumulation portfolios, brokerage comparisons and how we calculate the returns on our sample portfolios.
And THEN And then we go to our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
Additional links:
Portfolio Visualizer Analysis of Joel's Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Bonus "Not an Improvement" Video Clip from Joel: YARN | that's not an improvement | Homestar Runner Strong Bad Trogdor | Video clips by quotes | f27b57a5 | 紗
Portfolio Charts Portfolios Page: Portfolios – Portfolio Charts
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In this episode we analyze the Amplify Black Swan Growth & Treasury Core ETF, ticker symbol SWAN, using David Stein's Ten Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Additional Links:
SWAN FAQ: Amplify_SWAN_faqs.pdf (amplifyetfs.com)
SWAN Prospectus: https://www.amplifyetfs.com/Data/Sites/6/media/docs/swanpartf.htm
SWAN Review Article: SWAN - A Review of the Amplify BlackSwan ETF for Downturns (optimizedportfolio.com)
Analysis of Synthetic SWAN vs Levered Golden Ratio Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Analysis of Synthetic SWAN vs. SWAN-based Levered All Weather Portfolio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
The NTSX Episodes are Episodes 59 and 61.
RPR Sample Portfolios: Portfolios Page | Risk Parity Radio
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In this episode we answer emails from Bob, Kelly, Jack and David. We discuss long term treasury bond and STRIPS funds, Iowa and the Field of Dreams, a Ray Dalio article about bonds from March and a missing link.
And then we go to our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
Ray Dalio Article Link: Why in the World Would You Own Bonds When... (bridgewater.com)
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In this episode we answer emails from Ralph, Justin, Rikki, Dan, Anderson and Phil. We address, dividends, bonds vs. bond funds, portfolio visualizer vs. portfolio charts, a PIMCO bonds correlations paper, ideas from Dan, and the Hedgefundie portfolio (again).
Links:
The PIMCO Stock-Bond Correlation Paper: displaydocument.ashx (pimco.fi)
Dan's Blog: KEEP INVESTING $IMPLE, $TUPID! | But not simpler than it needs to be! (keepinvestingsimplestupid.com)
Experimental Leverage Risk-Parity Portfolio At ChooseFI/M1: M1 Pies: Manage and Optimize Your Portfolio Like a Pro (choosefi.com)
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In this episode we answer four emails from Dave, or Zanzibar Buck-Buck McFate if you prefer. We address foolish consistencies and conflicts of interest, the reason we have sample portfolios, interest rate hysteria and Vanguard's VPGDX fund.
And then we go to our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
Additional Links:
Contents of VPGDX: VPGDX - Vanguard Managed Allocation Fund | Vanguard
Analysis if VPGDX vs. Golden Butterfly vs. Golden Ratio: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we analyze the AGFiQ US Market Neutral Anti-Beta Fund ETF, ticker symbol BTAL, using David Stein's Ten Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
This fund analysis was suggested/requested by listener Javen S.
Additional Links:
BTAL Fact Sheet: AGFiQ U.S. Market Neutral Anti-Beta Fund - - Fund Profile
BTAL Prospectus: AGFiQ Annual Prospectus
BTAL Correlation Matrix: Asset Correlations BTAL (portfoliovisualizer.com)
Backtest Golden Butterfly Portfolio Example: Backtest GB Portfolios (portfoliovisualizer.com)
Backtest Golden Ratio Portfolio Example: Backtest GR Portfolios (portfoliovisualizer.com)
Backtest Leveraged Portfolios Examples:
tinyurl.com/8t62zjhk
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In this episode we answer questions from Greg, David, Chris, Rikki and John-Michael. We discuss the "Weird Portfolio", do a Vanguard Life-Strategy Funds comparison, using a risk-parity style portfolio for intermediate needs, alternative allocations and related tax issues, treasury bonds, emerging markets funds and tax-advantaged transactions, and the Experimental Risk Parity Lever portfolio at ChooseFI and M1.
Links:
Weird Portfolio Article: The Weird Portfolio. How To Avoid Bubbles, Limit Drawdowns… | by Value Stock Geek
Weird Portfolio vs. Golden Butterfly vs. Golden Ratio comparison: Backtest Weird Portfolio
Vanguard Moderate Life Strategy vs. Golden Butterfly vs. Golden Ratio comparison: Backtest Vanguard Moderate Life Strategy
Episode 27 re Utility Funds: Podcast 27
Episode 9 re Preferred Shares Fund PFF: Podcast 9
Episode 31 re RPAR: Podcast 31
Optimized Portfolios Article re Leveraged ETFs: What Is a Leveraged ETF . . .?
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In this episode we answer emails from Bob, Zahir, Melanie, Pat and Rob. We address sound effects, strange voices, analyzing leveraged investments, test-driving risk-parity portfolios, selling bad investments in individual stocks, small-cap value stock investments over time and balancing safe/perpetual withdrawal rates vs. projected drawdowns.
Then we go to our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
Additional Links:
Episode 111 Notes Page: Podcast Episode 111 | Risk Parity Radio
Portfolio Charts Golden Butterfly Analysis: Golden Butterfly – Portfolio Charts
Risk Parity Ultimate Restructuring Episode And Analysis Notes: Podcast Episode 109 | Risk Parity Radio
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In this episode we answer emails from Keith, Jeffrey, Evan, Brendan, Kelly and Paul. We address Kelly Criterion and other risk/reward considerations (Sharpe and Sortino ratios), crystal balls, the "Possibility Effect" cognitive bias and a base-rate analysis of the Golden Butterfly portfolio, issues with IVOL, trading ETFs at Vanguard, the perpetual withdrawal rate, expense ratios and bucket strategies, basic retirement considerations, issues with QYLD and an examination of Big Ern's leveraged retirement portfolios.
It's another barn burner! Real Wrath of God type stuff!
Links:
Kelly Criterion article: Leverage and The Line Between Aggressive and Crazy (rhsfinancial.com)
Golden Butterfly analysis with Heat Map: Golden Butterfly – Portfolio Charts
Episode 89 re QYLD: Podcast Episode 89 | Risk Parity Radio
Big Ern Article Re Leveraged Portfolios: Lower risk through leverage – Early Retirement Now
Big Ern Article Re Gold In Portfolios: Using Gold as a Hedge against Sequence Risk – SWR Series Part 34 – Early Retirement Now
Episode 40 Re Gold: Podcast Episode 40 | Risk Parity Radio
Portfolio Analysis Comparison Of Big Ern Leveraged Portfolio With And Without Gold: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
The SWAN ETF: SWAN - BlackSwan Growth & Treasury Core ETF - Amplify ETFs
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In this all-email extravaganza we address emails from Spencer, Nick, Bob, Randy, Falco, Kevin, and Daniel. We address the Hedgefundie Portfolio (again!), an article about a 50/50 stock/10-year treasury reference portfolio, BigErn's research about gold (again!), CAPEd and other common crystal balls and the erroneously implied mean-reversion assumption, gold etfs, using cash as a short-term risk-reducer, implementing the Golden Ratio in the Netherlands, a missing link from Episode 7 and implementing the Risk Parity Ultimate at M1 finance. Whew!
And we are still a month behind on the emails.
Referenced links:
Episode 82 re the Hedgefundie portfolio: Podcast Episode 82| Risk Parity Radio
Lengthy Hedgefundie Portfolio Article: HEDGEFUNDIE's Excellent Adventure (UPRO/TMF) - A Summary (optimizedportfolio.com)
Article re 50/50 S&P/10-year treasury reference portfolio: The Risk Parity Gorilla In The Room | AlphaWeek (alpha-week.com)
50/50 S&P/10-year treasury vs. Golden Ratio backtest: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
BigErn Gold Article: Using Gold as a Hedge against Sequence Risk – SWR Series Part 34 – Early Retirement Now
Episode 40 re Gold: Podcast Episode 40 | Risk Parity Radio
Dragon Portfolio Paper with 100-year Analysis: https://artemiscm.docsend.com/view/taygkbn
Next Level Life You Tube Video on Gold: Why Are Gold Portfolios So Dependable? - YouTube
Episode 70 re CAPE Ratio: Podcast Episode 70 | Risk Parity Radio
Ben Felix Episode re CAPE Ratio: RR #146 - Do Expected Stock Returns Wear a CAPE? - YouTube
Ben Felix Episode re Expected Returns: RR #151 - Professor Brad Cornell: A Skeptic’s Look at the Cross Section of Expected Returns - YouTube
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In this episode we discuss the rebalancings of four of the Sample Portfolios at Portfolios | Risk Parity Radio, which occurred on July 21, 2021. We also adjusted the allocations of the Risk Parity Ultimate Portfolio to make it more diverse.
And we answer emails from Rob and Colin to boot, about considerations in making portfolio adjustments and what to do if you end up with too much retirement money.
And celebrate crossing 100,000 downloads!
Links:
Comparison of Original Risk Parity Ultimate and New Risk Parity Ultimate: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Correlation Matrix for New Risk Parity Ultimate: Asset Correlations (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we start by addressing emails from Eric, Gareth, Jeff and Randy about transitioning with a high savings rate, data sources at portfoliovisualizer and portfoliocharts, Chinese A shares ETFs, and capital gains tax issues. Then we do our weekly portfolio reviews of the seven sample portfolios at Portfolios | Risk Parity Radio.
After that we have some fun smashing some crystal balls discussed in a CNBC article and talk about more rebalancing. Yeah, baby, yeah!
Links:
Portfolio Visualizer Data Sources: Frequently Asked Questions (portfoliovisualizer.com)
Portfolio Charts Data Sources: Search Results for “data sources” – Portfolio Charts
KBA Correlation Analysis: Asset Correlations (portfoliovisualizer.com)
CNBC Article re Crystal Ball Failures: The mystifying bond market behavior could last all summer (cnbc.com)
Optimized Rebalancing Article: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we discuss an investigation and penalties assessed against TIAA for malfeasance in managing client accounts and then we answer emails from Adam, Brian, Andy, and Bennie. We discuss short-term draw-down strategies, volatility and correlation theory, margin accounts and leverage funds, and automated investing.
RANT subject article: TIAA to Pay $97M for Pressuring Investors Into Rollovers | ThinkAdvisor
And here is the rest of the text of Brian's email:
"Below is a simple numbers example I created at the time that allowed it to click for me, I share it in case there are others like me that have a hard time allowing the words of others dissuade them from the math that's going on in their head.
It might be helpful because it holds return and volatility constant to isolate the impacts of correlation. Cheers.
The return of Asset A has four observations: -10%, +30%, +15%, +5%
If we drop this into a spreadsheet it has an average return of +10% and a ~17% standard deviation.
Asset B and C are exactly the same as Asset A in all ways, with the only difference being the order of their returns.
Asset B = +30%, -10%, +5%, +15%
Asset C = +15%, + 5%, +30%, -10%
If you didn't immediately notice, when you drop these into a spreadsheet you will see that Asset A & B have a -1 correlation, and Asset A & C have a 0 correlation."
Now where it gets interesting is suppose over these four periods you had two portfolios, one that was 50/50 A&B and another that was 50/50 A&C. Calculate the average return and standard deviation for these two portfolios.
You'll see that both have a +10% average return just like the original assets, however that standard deviation goes to zero for the negatively correlated assets and only drops ~5 points for the zero correlated assets."
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In this episode, we answer emails from Jon, Toby, Dale and Andrew about intermediate portfolios, adjustments to gold in portfolios, value investing vs. broader diversification, market timing, financial coaching and how to incorporate I-Bonds.
Then we go to our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio
And we drop a few crystal balls on the pavement of reality and see what happens.
Link to Choose FI Sample Portfolios Page: M1 Pies: Manage and Optimize Your Portfolio Like a Pro (choosefi.com)
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In this episode we answer emails from Peter, Darren and Paddi about sequence of return risk of Risk Parity style portfolios versus cash-drag portfolios, correlations among U.K. and European ETFs, gilts, Vanguard ISA selections, U.S. versus global portfolios, glide paths, the Macro-Allocation principle, valuing real estate in a retirement portfolio, an Amex privileged assets account, the Golden Ratio portfolio and gold ETFs.
And the Atlanta Highway.
Links:
Portfolio Charts Heat Map: HEAT MAP – Portfolio Charts
Unicorn Bay Correlation Analyzer That Works With UCITS ETFs: Asset Correlations for Free | Unicorn Bay
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In this episode we answer emails form Eric, Chas, Rick, Mike and Grant about Canadian stuff, using margin, transition timing, and inverse stock funds. And THEN we do our weekly and monthly portfolio reviews of the SEVEN sample portfolios at Portfolios | Risk Parity Radio.
Additional links:
Portfolio Charts Fund Finder: FUND FINDER – Portfolio Charts
Portfolio Charts Retirement Spending Calculator: RETIREMENT SPENDING – Portfolio Charts
Interview of Me on a Scottish podcast: Superb Diamond Range: Frank Vasquez of Risk Parity Radio (The Financial Series) | #49 | Risk Parity Investing | podcast | superb diamond range on Apple Podcasts
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In this episode we introduce a new sample portfolio on our portfolios page at Portfolios | Risk Parity Radio. The Levered Golden Ratio is a leveraged portfolio that contains stocks, treasury bonds, gold, a REIT, a volatility fund and a smidgen of crypto-related funds. It will be the seventh sample risk-parity style portfolio.
Additional Links:
Portfolio Visualizer Backtest: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Correlation Matrix: Asset Correlations (portfoliovisualizer.com)
Seeking Alpha Article Re Risk Parity Portfolios with NTSX and SWAN: Risk Parity Portfolio: Double-Digit Annual Returns, Inflation and Recession-Proof | Seeking Alpha
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In this episode we answer emails from Andrew and Karen, Nick, Chris and Brandon. We discuss ETF expenses, an article about treasuries that misuses data in favor of a Crystal Ball, the Holy Grail principle, vectors and volatility, rebalancing and Vanguard mutual funds.
Here are the links:
Referenced Article: iShares ETF TLT: No Reason To Buy Long-Term Treasuries At Rock-Bottom Yields | Seeking Alpha
2021 Correlation Analysis of TLT, SPY and VIOV: Asset Correlations (portfoliovisualizer.com)
Bond Convexity Article: High Profits at Low Rates: The Benefits of Bond Convexity – Portfolio Charts
Ray Dalio Explains the Holy Grail Principle: Ray Dalio breaks down his "Holy Grail" - YouTube
Michael Kitces Optimized Rebalancing: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we thank Mathew G for his support, answer emails from EJ, Greg, Nathan, Scott and David and do our weekly portfolio reviews of the sample portfolios you can find at Portfolios | Risk Parity Radio. We discuss EDV, alternatives to gold in the Golden Butterfly, my investing history, accumulation portfolios and the portfolio shift at retirement.
Errata: I said "1.5%" when I meant "1.5 times" in the discussion of EDV and TLT and the insurance ETF mentioned is KBWP.
Additional links:
The Father McKenna Center: Home - Father McKenna Center
Sample Portfolios at Portfolio Charts: Portfolios – Portfolio Charts
Michael Kitces Phases of Investing Article: The Four Phases Of Saving For Retirement (kitces.com)
Morningstar Diversification Landscape Report: Diversification_Landscape_033021v2.pdf (morningstar.com)
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In this episode we answer emails from Randy, Mike, Ed, Javen, Boone, Jamie and Glenn. We address the sample portfolio distribution rules, long-term treasury bonds and crystal balls, a proposed portfolio, the ETF BTAL, rebalancing rules, volatility funds and cheaper alternatives to TLT.
Extra-added bonus link: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
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In this episode we analyze the Direxion Auspice Broad Commodity Strategy ETF, ticker symbol COM, using David Stein's Ten Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Additional Links:
COM Fact Sheet: COM-Fact-Sheet.pdf (direxion.com)
COM Summary Prospectus: Direxion Auspice Broad Commodity Strategy ETF (onlineprospectus.net)
COM Correlation Matrix: Asset Correlations (portfoliovisualizer.com)
COM Comparison Backtests: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
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In this episode we answer emails from JB, Brian E, Beat, Lauren, PD and Brad about a TSP conundrum, data for back-testing, the Dragon Portfolio, bowing to your sensei, maximizing withdrawals and using risk parity-style portfolios for intermediate goals. Then we proceed with our weekly portfolio reviews of the sample portfolios you can find at Portfolios Page| Risk Parity Radio
Additional links:
Big Ern's Google Data Sheet: EarlyRetirementNow SWR Toolbox v2.0 - save your own copy before editing! - Google Sheets
DFA Matrix Book (2016): DFA-matrix_book_us_2016.pdf (millswealthadvisors.com)
Meb Faber podcast with Chris Cole: Episode #317: Chris Cole, Artemis Capital Management, “You Want To Diversify Based On How Assets Perform In Different Market Regimes” | Meb Faber Research - Stock Market and Investing Blog
Portfolio Charts Retirement Spending Calculator: RETIREMENT SPENDING – Portfolio Charts
Support the show (https://www.riskparityradio.com/support)
In this episode we address emails from Matt, Craig, Drew, Jeff, and Bill about Homestar Runner sound clips, ETF expense ratios, the psychology of decumulation, portfolio visualizer tools, and my limitations. We also discuss a recent interview of Bill Bengen and the new portfolios page at ChooseFI.
Links:
Investopedia Article re ETF fees: How Are ETF Fees Deducted? (investopedia.com)
FI Show Interview of Bill Bengen: How the 4% Rule is Changing | Bill Bengen - The FI Show
ChooseFI M1 Portfolios Page: M1 Pies: Manage and Optimize Your Portfolio Like a Pro (choosefi.com)
Support the show (https://www.riskparityradio.com/support)
In this episode, we answer emails from Erin, Eric, Matt, Davis, Brian, UK, Peter, and Gregory. We discuss half-way-there portfolios and Canadian TV, the Pinwheel Portfolio (briefly), when it makes sense to have multiple portfolios, Millennial intermediate investment strategies, statistical formulas and cash drags, FNBGX, process issues with retirement portfolios, leveraged funds, gold, international equities, portfoliocharts and limit orders. Yeah, Baby, Yeah!
And then we proceed to our weekly reviews of the six sample risk-parity style portfolios you can find at Portfolios | Risk Parity Radio
Additional links:
Erin's Canadian-Focused Asset Correlation Analysis: Asset Correlations (portfoliovisualizer.com)
The Pinwheel Portfolio: Pinwheel Portfolio – Portfolio Charts
Episode 94 with NTSX portfolios: Podcast Episode 94 | Risk Parity Radio
Portfolio Visualizer FAQ/Methodologies: Frequently Asked Questions (portfoliovisualizer.com)
Retirement Drawdown/Spending Calculator: RETIREMENT SPENDING – Portfolio Charts
Hot off the Interwebs! Me on the Superb Diamond Range Podcast: Superb Diamond Range: Frank Vasquez of Risk Parity Radio (The Financial Series) | #49 | Risk Parity Investing | podcast | superb diamond range on Apple Podcasts
Support the show (https://www.riskparityradio.com/support)
In this episode we address the Insidious and Insipid Propaganda Campaign of "National Annuity Awareness Month" that is currently plaguing us with coloring books and stickers, among other obscenities. And then we address emails from Leah (x2), Brian, Tony, Jeffrey and Steven about REITs and money market funds in the Golden Ratio portfolio, leveraged fund portfolios, dynamic asset allocation, the etf TAIL and Strongbad.
Links:
Dynamic Asset Allocation article: Dynamic Asset Allocation Definition (investopedia.com)
Episodes Regarding the Bias-Variance Tradeoff (or Dilemma) and Risk vs. Uncertainty:
Podcast Episode 49 | Risk Parity Radio
Podcast Episode 66 | Risk Parity Radio
Podcast Episode 64 | Risk Parity Radio
Chocolate Vinegar Cake Episode: Podcast Episode 16 | Risk Parity Radio
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Richard, Kyle, Chris and two Brians. We discuss Richard's portfolio, using NTSX for smaller amounts of leverage, a 90% stock portfolio, PFFD vs. PFF and a TIPs redux. After that we proceed to our weekly reviews of the six sample risk-parity style portfolios you can find at Portfolios | Risk Parity Radio
Additional Links:
Richard's Portfolio vs. Modified Golden Ratio Analysis: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
NTSX Sample Portfolios: NTSX Portfolios (portfoliovisualizer.com)
Efficient Frontier Calculator: Efficient Frontier Forecast (portfoliovisualizer.com)
Article About PFFD: Preferred Stock ETFs: Taking A Closer Look At PFFD, PFFR, PSK | Seeking Alpha
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Bastian, Patrice, Jeff and Keith, about investing in Sweden and currency issues, Fundrise, a troublesome annuity product in a 403b and a managed futures reference. Then we proceed with an analysis of I-bonds from the U.S. Government using David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Links:
Portfolio Charts Fund Finder: FUND FINDER – Portfolio Charts
Meb Faber Podcast #225: Episode #225: Eric Crittenden, Standpoint Asset Management, “I Enjoy Trying To Win A Marathon Rather Than Winning Sprints” | Meb Faber Research - Stock Market and Investing Blog
Treasury Direct I-Bonds In Depth: Individual - Series I Savings Bonds (treasurydirect.gov)
Treasury Direct I-Bonds FAQ: Individual - Series I Savings Bonds FAQs (treasurydirect.gov)
Support the show (https://www.riskparityradio.com/support)
In this episode I make an announcement about my willingness to do financial coaching and address emails from Randy, Kristen, Freya, Kyu, TK, Davis, Robyn and Iveta. We discuss UPRO, my quirky sense of humor, commodities funds, safe and perpetual withdrawal rates, gliding into retirement with a Fortress of Solitude, multi-factor ETFs, All Seasons portfolio as an emergency fund and compared with VASIX, and my limitations (on guests).
Links:
UPRO Holdings: ProShares UltraPro S&P500 | UPRO | Daily Holdings | ProShares ETFs
Portfolio Charts Fund Finder: FUND FINDER – Portfolio Charts
Portfolio Charts Golden Butterfly Analysis: Golden Butterfly – Portfolio Charts
Portfolio Charts 60/40 Analysis: Classic 60-40 – Portfolio Charts
VASIX vs. All Seasons Analysis: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
John Goodman -- Gambler -- "Fortress of Solitude" Speech: The Fortress of Solitude Position (John Goodman in The Gambler) - YouTube
Support the show (https://www.riskparityradio.com/support)
In this episode we answer questions from Rune, Patrice, Franklin and Jeff about coasting in to retirement, the key differences between 100% equity and risk-parity style portfolios, fun with statistical metrics, adjusting a high-income high-equity portfolio situation in transition to retirement, leveraged funds and converting company stock to index funds.
And after all that, we do our weekly and monthly reviews of the six sample risk-parity style portfolios you can find at Portfolios | Risk Parity Radio
Additional links:
Sharpe Ratio: Sharpe Ratio Definition (investopedia.com)
Portfolio Charts Golden Butterfly Example Of Tight Variance: Golden Butterfly – Portfolio Charts
Portfolio Visualizer Asset Correlation Calculator (Covariance): Asset Correlations (portfoliovisualizer.com)
How NOT To Invest: Podcast 9| Risk Parity Radio
Support the show (https://www.riskparityradio.com/support)
In this episode we answer emails from Melissa, Nick, Don, Matt H (x2), Andrew (x2) and Keith. We dive into short-term correlations, agreements with Big Ern on ultra-conservative portfolios, Fractal vs Gaussian mathematics (oh, boy!), taunting Wealthfront a second time, and I-bonds preview, leveraged etf portfolios, VBR vs. VIOV, M1 pies, what's going on with Gamestop in VIOV and the Fama-French Three-Factor Model. Are you ready for this?
Links:
Sample Portfolios Page: Portfolios | Risk Parity Radio
Rational Reminder Podcast #151: The Rational Reminder Podcast: Professor Brad Cornell: A Skeptic’s Look at the Cross Section of Expected Returns (EP.151) (libsyn.com)
Optimized Portfolios Site: Leverage | Optimized Portfolio
Methodologies for S&P Style Factors and Funds: S&P Methodologies Paper
Intro to Fama-French Three-Factor Model: Fama and French Three Factor Model (investopedia.com)
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In this episode we analyze QYLD, the Global X Nasdaq 100 Covered Call ETF, using David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Additional links:
QYLD Fact Sheet: QYLD-factsheet.pdf (globalxetfs.com)
QYLD Summary Prospectus: Global X ETFs
QYLD Correlation Analysis: QYLD Asset Correlations (portfoliovisualizer.com)
QYLD Comparison Backtest in Golden Butterfly: QYLD Backtest (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we answer questions from Jamie, Zach, Keith, Ian, Aldo and Brad. We discuss asset allocations in Roths vs. Traditional, the Risk Parity Radio logo, the virtues of long term treasury bonds, building your stock allocation, doing risk parity from Switzerland and short-term (daily) correlations.
Then we move to our weekly portfolio reviews of the sample portfolios you can find at The Risk Parity Radio Portfolios Page
Links:
Portfolio Charts New Fund Finder: FUND FINDER – Portfolio Charts
Optimized Portfolio M1 Selections: "m1" | Optimized Portfolio
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In this episode we answer questions from Falco, Tim, Jeff, Adam, Phil, "Steve" and Nick about building an intermediate-life risk parity portfolio, a Ben Felix allocation video, building up or selling into a risk parity portfolio, a 42.5/42.5/15 portfolio, figuring it out for a UK national in the Middle East, setting it up after moving from Africa, and a bond basics review. Whew!
Link to Adam's 42.5/42.5/15 backtest analysis: Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)
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In this episode we answer questions from Russell, Carter, the Mysterious Visitor 4541, Own and Travis about portfolios in the accumulation phase, PFF, REET vs. VNQ/VNQI, going into drawdown with a large taxable account, and inflation and TLT.
Then we move to our weekly portfolio reviews of the sample portfolios you can find at The Risk Parity Radio Portfolios Page
Link to referenced Seeking Alpha Article on REITs:
REET Vs. VNQI (ETF): The Better Way To Play International Real Estate | Seeking Alpha
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In this episode we address emails from Jon, Laura, Kevin and Brian about the problems with Wealthfront's "risk parity" fund, moving to Costa Rica on a risk parity portfolio, inflation-friendly asset classes and TIPS.
Links:
Article Re Performance of Risk Parity funds in March 202: Quant Funds in COVID Market Rout | Markov Processes International
Wealthfront's description of its risk parity fund: What is Risk Parity invested in? – Wealthfront Support
Wealthfront Annual Report: risk_parity_annual_report.pdf (wealthfront.com)
Morningstar 2021 Diversification Landscape Report: Diversification_Landscape_033021v2.pdf (morningstar.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we, ahem, "discuss" the problem of Mindless Diversification. Oh, yeah! Then we tackle some emails from Craig, Falco, Wes, Justin, Matt, Brian and KC about the Aggressive Fifty-Fifty Sample Portfolio, distribution and re-balancing rules, the Vanguard Extended Duration Bond Fund, trust issues, and why we don't have guests.
The Article In Question: Mindless Diversification Article
Why Some Old Rules Of Thumb Are Really Bad: The "100 Minus Age" Rule Puts Retirees at Risk (thebalance.com)
Kitces Article re Rebalancing: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
In this Episode we answer emails from Aaron, Mark, Rob, Joel, Jake and the Mysterious Visitor 9380. We talk taxes on gold, what's in Uncle Frank's portfolios, a Seeking Alpha article about constructing Risk Parity-style portfolios, BND vs. GLDM, and portfolio management. And Trogdor!
Then we move to our weekly portfolio reviews of the sample portfolios you can find at The Risk Parity Radio Portfolios Page
Additional Links:
Taxation of Gold Article: Tax-efficient investing in gold (journalofaccountancy.com)
Seeking Alpha Article: Building A Risk-Parity Portfolio: An Example | Seeking Alpha
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Another Bonus Email Episode! In this episode we answer emails from listeners John, Mitchell, Steve, Elisheva, Brian and Justin about an article about us, withdrawal rates for the experimental sample portfolios, transitioning into retirement at age 55 (twice!), a newsletter, putting you to sleep with RPR, the Hedgefundie Ultimate Adventure portfolio, muni-bonds and options strategies.
Links:
John G's Article: Why I'm Unhappy when all my Investments go up - SmartMoneyToolbox
Portfoliocharts Portfolio Analyzer (input your own numbers): MY PORTFOLIO – Portfolio Charts
All About The Hedgefundie Ultimate Adventure Portfolio: HEDGEFUNDIE's Excellent Adventure (UPRO/TMF) - A Summary (optimizedportfolio.com)
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In this episode, we take on Listener Erik's request to analyze the TIAA Real Estate Account, QREARX, which we do using David Stein's Ten Questions to Master Investing:
1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?
Additional Links:
QREARX Fact Sheet: TIAA Real Estate Account Fact Sheet
QREARX FAQ: REA FAQ 12.31.20 (tiaa.org)
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In this all mail-bag episode we answer questions from Brian, Ayne, Drew and Lana about shifting into risk-parity portfolios early, Vanguard fund options, advice if you have a significant real estate portfolio on the side, advice for young adult children and about what asset classes do well in inflationary environments.
Links:
Portfolio Charts Main Calculator Page: MY PORTFOLIO – Portfolio Charts
Portfolio Charts Golden Butterfly Page: Golden Butterfly – Portfolio Charts
Portfolio Charts Retirement Spending Calculator: RETIREMENT SPENDING – Portfolio Charts
M. Kitces Four Phases Article: The Four Phases Of Saving For Retirement (kitces.com)
REIT Matrix: REIT Correlations
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In this episode we answer questions from Patrons Dominic and Jenny and Listeners #4593 and Phil about where to put your gold funds, making the transition to a risk-parity style portfolio, gold vs. bitcoin and a Ben Felix stock portfolio. Then we move to our weekly portfolio reviews of the sample portfolios you can find at The Risk Parity Radio Portfolios Page
Additional Links:
The Lindy Effect: Lindy effect - Wikipedia
Gold/Bitcoin Correlation Analysis: Asset Correlations (portfoliovisualizer.com)
Mandelbrot Set Video: Eye of the Universe - Mandelbrot Fractal Zoom
Ben Felix Five Factor Investing Video: Five Factor Investing with ETFs - YouTube
Ben Felix Five Factor Investing Paper: Five Factor Investing with ETFs | PWL Capital
Rational Reminder Podcast with Paul Merriman: RR #147 - Paul Merriman: We're Talking Millions - YouTube
Please join Diania Merriam and me for a Q&A session on May 2 at noon EDT. Here is the link to register: Investing Demystified: Q&A with Frank Vasquez (webinarjam.com)
Support the show (https://www.riskparityradio.com/support)
In this episode, we answer emails from Brad, the Mysterious Visitor #6369, Robyn, Zach and Young about thanks, TIPs, TLT and leveraged bond funds. Then we complete our analysis of the SPDR Long Term Corporate Bond Fund, SPLB, using David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Links:
SPLB Fact Sheet: SPDR® Portfolio Long Term Corporate Bond ETF
Episode 70: IVOL Analysis Part One | Risk Parity Radio
Episode 72: IVOL Analysis Part Two | Risk Parity Radio
Correlation Analysis of TIP vs. short and intermediate treasuries: TIP Correlations (portfoliovisualizer.com)
Episode 9: PFF Analysis | Risk Parity Radio
SPLB Correlation Analysis: SPLB Asset Correlations (portfoliovisualizer.com)
SPLB vs. PFF Backtest Comparison: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we go through the basics about the taxation of ordinary brokerage accounts at an elementary level and answer questions from Brian and Jamie about taxation of intermediate savings and tax location approaching retirement. Links:
Tax Schedules for Ordinary Income: 2021 Tax Brackets and Other Tax Changes (investopedia.com)
Long-Term Capital Gains Information and Tax Schedules: Capital Gains Tax 101 (investopedia.com)
Bogleheads on Investing Episode 032: Phil DeMuth, host Rick Ferri (podbean.com)
Using the Zero Percent LTCG's Rate In Retirement: Never Pay Taxes Again - Go Curry Cracker!
Support the show (https://www.riskparityradio.com/support)
In this episode we answer a question from Melissa about a Merriman Four-Fund Combo Portfolio, a question from Tony about a whole lot of stuff and then move to our weekly portfolio reviews of the sample portfolios you can find at The Risk Parity Radio Portfolios Page
Additional Links:
Merriman Retirement Portfolio: 6 Steps to the Ultimate Retirement Portfolio | Paul Merriman
Analysis Tweaking The Merriman Portfolio: Backtest Portfolio Analysis (portfoliovisualizer.com)
Long Term Treasuries/Stock Market Comparison: Backtest LT Treasuries Portfolio Analysis (portfoliovisualizer.com)
Correlation Comparison of GNR and PDBC: Correlations Comparison (portfoliovisualizer.com)
In this episode, we answer a question from Mark about preparing for his impending retirement and begin our analysis of the SPDR Long Term Corporate Bond Fund, SPLB, using David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Links:
Episode 68 And Links: Risk Parity Radio Episode 68
Asset Correlation Analyzer: Asset Correlations (portfoliovisualizer.com)
Episode 14 (Bonds Part One): Risk Parity Radio Episode 14
Episode 16 (Bonds Part Two): Risk Parity Radio Episode 16
SPLB Fact Sheet: Fact Sheet: SPDR® Portfolio Long Term Corporate Bond ETF
SPLB Summary Prospectus: Summary Prospectus for SPLB
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In this action-packed bonus episode we answer listener questions from Javen, Tim, Julie, Don and Jacob about an experimental portfolio, valuation metrics and academic studies on risk parity, variations on the Risk Parity Ultimate sample portfolio, highly correlated meat products and total bond funds. Relevant Links:
Javen S XVZ link: How Does Barclays’ XVZ ETN Work? | Six Figure Investing
Javen S Portfolio Backtest: Backtest Portfolio Asset Allocation
Berkeley Academic Paper: risk parity111111.pdf (berkeley.edu)
Managing Multi-Asset Strategies Chapter 4: Chapter-4-from-Managing-MultiAsset-Strategies-2018.pdf - Google Drive
The All-Weather Story: All-Weather-Story.pdf
Risk Parity Ultimate Variants: RPU Portfolio Backtest
The Mega REIT Correlation Matrix: Asset Correlations
Support the show (https://www.riskparityradio.com/support)
We begin this episode by answering questions from Claudia, Jane and Richard, about bond tents, Roth IRAs for teenagers and long-term treasury bonds, then set up for a couple new episodes to be made in the future with Jason and Erik, and then moving to our weekly portfolio reviews of the sample portfolios you can find at The Risk Parity Radio Portfolios Page
Additional links:
Michael Kitces Bond Tent Article: The Portfolio Size Effect And Optimal Equity Glidepaths
Early Retirement Now Data Sets: EarlyRetirementNow SWR Toolbox v2.0
Early Retirement Now SWR Series #34: Using Gold as a Hedge against Sequence Risk
Bond Convexity Article: High Profits at Low Rates: The Benefits of Bond Convexity – Portfolio Charts
Father McKenna Center: Home - The Father McKenna Center
Support the show (https://www.riskparityradio.com/support)
We begin this episode with two emails from Maggie and Dominic and then move on to the second half of an analysis of the ETF IVOL, the Quadratic Interest Rate Volatility and Inflation Hedge ETF, as suggested by listener Boone B. For the analysis, we use David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Additional Links:
Portfolio Visualizer Analyzer By Asset Class (for Dominic): Backtest Portfolio Asset Class
IVOL Information Page: IVOL | IVOL (ivoletf.com)
IVOL Asset Correlation Analysis: IVOL Correlations
Portfolio Analysis of All Seasons vs. All Seasons w/IVOL: Backtest All Seasons Portfolios
Support the show (https://www.riskparityradio.com/support)
In this episode we take in emails from Anita, Ethan, Julie, Jeff and Ron and discuss structured products, small-cap value funds, using risk-parity portfolios for intermediate goals and experimenting with leveraged portfolios and bitcoin. And THEN we have our weekly portfolio review of the portfolios you can find at The Risk Parity Radio Portfolios Page
Additional links:
Correlation matrix of small-cap funds: Small Cap Asset Correlations
Assorted Portfolios With And Without Leverage At Optimized Portfolios: Optimized Portfolios Page
Support the show (https://www.riskparityradio.com/support)
We begin this episode with our monthly rant -- this time about crystal balls and the CAPE ratio and the move on to the first half of an analysis of the ETF IVOL, the Quadratic Interest Rate Volatility and Inflation Hedge ETF, as suggested by listener Boone B. For the analysis, we use David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Links:
Article: Why You Shouldn't Rely Only On The Shiller CAPE Ratio To Predict Market Valuation – Wes Moss
Article: Crystal Balls and CAPE - Financial Symmetry, Inc.
Article: Does Your Wealth Manager Need a Crystal Ball... or Just Balls of Steel? (linkedin.com)
Article: Is the Market Overvalued or are the Measuring Gauges Broken? - Articles - Advisor Perspectives
IVOL Summary Prospectus: Quadratic Interest Rate Volatility and Inflation Hedge ETF
IVOL Information Page: IVOL | IVOL (ivoletf.com)
Support the show (https://www.riskparityradio.com/support)
In this mailbag extravaganza we tackle questions and comments about podcast humor, intermediate-term investing with the Golden Ratio portfolio, tax-loss harvesting, bonds and dogs and cats living together, AND do our weekly and monthly portfolio reviews of the the sample portfolios you can find at Sample Portfolios | Risk Parity Radio
Additional links:
Asset Correlation Calculator: Asset Correlations (portfoliovisualizer.com)
Money For The Rest Of Us Podcast About Bonds: Why in the World Would You Own Bonds? | Money For The Rest of Us
The Mass Hysteria Caused by Dogs and Cats Living Together: dogs-and-cats-living-together-mass-hysteria
Support the show (https://www.riskparityradio.com/support)
In this episode we follow up on Episodes 64 and 66 by applying a process with which to approach retirement to listener Chuck H's situation. Links to help you with your retirement portfolio issues:
The Best Free Retirement Spending Calculator: RETIREMENT SPENDING – Portfolio Charts
Income Tax Brackets for 2021:
2021 Tax Brackets and Other Tax Changes (investopedia.com)
Capital Gains Tax Brackets for 2021: Capital Gains Tax (investopedia.com)
Qualified Dividends Info: Qualified Dividend Definition (investopedia.com)
Go Curry Cracker Tax Strategy: Never Pay Taxes Again - Go Curry Cracker!
Mad Fientist Roth Conversions and More: How to Access Retirement Funds Early (madfientist.com)
Taxation of Gold: Metal, Money, and the Measurable Value of Gold – Portfolio Charts
Support the show (https://www.riskparityradio.com/support)
We respond to emails from Christopher B, Jeff B and Mark B, and then dive into our weekly reviews of the sample portfolios you can find at Sample Portfolios | Risk Parity Radio
Additional links:
Correlation Analysis of VIOV and VBR: Small Cap Value Correlation Analysis
Portfolio Comparisons of Experimental Portfolios with S&P 500 and NASDAQ: Backtest Portfolio Analysis
Hoisington Newsletters: Economic Overview (hoisington.com)
30-year history of interest rates: The Bond Strategist Homepage
Mark B's New Risk Parity Reddit Forum: riskparityinvesting (reddit.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we follow up on Episode 64 regarding the difference between Risk and Uncertainty and why Rules of Thumb are good for portfolio construction in an Uncertain World. With some help from Mad Max. Links:
Bill Bengen's Original1994 Article About The 4% Rule: Bengen Article
Episode 49 re the Bias-Variance Dilemma or Tradeoff: RPR Podcast Episode 49
Episode 7 re our Three Principles of Portfolio Construction: RPR Podcast Episode 7
Support the show (https://www.riskparityradio.com/support)
We answer a question from a listener about cash in the Sample Portfolios and then do our weekly portfolio review of the sample portfolios you can find at Sample Portfolios | Risk Parity Radio
Link to Hedgeye/nine interviews (this link will change or expire): Hedgeye
Link to the Michael Kitces article about rebalancing: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)
Support the show (https://www.riskparityradio.com/support)
In this episode we read Chuck And Tim's emails and then discuss some questions that Tim has about TLT, bonds and accumulation portfolios. We also begin a discussion of the concepts of Risk versus Uncertainty and how rules of thumb are useful when the future is uncertain.
Professor Gerd Gigerenzer on Heuristics and Uncertainty: Gerd Gigerenzer - heuristics - YouTube
Paul Merriman podcast on 50 years of drawdowns at various rates: Fixed contributions 2021 updated | Paul Merriman
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In this episode, we answer a question from Craig, re-introduce the podcast to some of our new listeners and do our weekly portfolio review of the sample portfolios you can find at Portfolios | Risk Parity Radio
Here are the two links from Brandy to the SEC filings we mentioned in answering the question from Craig:
WT Emerging Markets Efficient Core Fund
WT International Efficient Core
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In this episode we talk about a email from listener Tommy V. about RPAR, do a little rant about FOMO investing and conduct our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
Links:
Tommy V's article about RPAR: https://seekingalpha.com/amp/article/4408481-rpar-risk-parity-etf-diversified-holdings-unique-hedge-fund-strategy
Episode 31 re RPAR: Episode 31
Ben Felix video about the ill-fated history of Chasing Hot Fund Managers: https://youtu.be/p6HrepdLSu4
Texas Sharpshooter Fallacy: Texas sharpshooter fallacy - Wikipedia
Clustering Illusion: Clustering illusion - Wikipedia
Episode 7 re Three Core Principles: Core Principles Episode
Support the show (https://www.riskparityradio.com/support)
In this episode we complete our analysis of NTSX, the WisdomTree 90/60 U.S. Balanced Fund, using David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Links: WisdomTree 90/60 Balanced Fund Information Page: NTSX - WisdomTree 90/60 U.S. Balanced Fund
NTSX Basic Statistics: wisdomtree-fi-export-statistics-ntsx.pdf
Correlation Analysis of NTSX: NTSX Asset Correlations
Backtest Comparison of Simple NTSX-Based Risk-Parity Style Portfolio: Backtest NTSX Portfolio Comparison
Backtest Comparison of Synthetic NTSX-Based Risk Parity Style Portfolio: Backtest Synthetic NTSX Portfolio Comparison
Episodes 12 and 40 about gold:
Episode 12
Episode
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
Support the show (https://www.riskparityradio.com/support)
In this episode we begin an analysis of NTSX, the WisdomTree 90/60 U.S. Balanced Fund, using David Stein's Ten Questions to Master Investing:
1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?
Links: WisdomTree 90/60 Balanced Fund Information Page: NTSX - WisdomTree 90/60 U.S. Balanced Fund
NTSX Basic Statistics: wisdomtree-fi-export-statistics-ntsx.pdf
Laminar Capital Management (Andy Cole): Laminar Capital Management (laminarcm.com)
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also discuss the Risk Parity Ultimate Portfolio, which was first discussed in depth in Episode 11.
Link to Portfolio Visualizer Analysis: Risk Parity Ultimate Asset Allocation Analysis
Support the show (https://www.riskparityradio.com/support)
In this episode we discuss a "guest request" email I received and complete our analysis of the managed futures fund DBMF that we began in Episode 55.
David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Links:
DBMF Summary Fact Sheet: https://www.imgp.com/us/wp-content/uploads/2021/01/iM-DBi-Managed-Futures-Strategy-ETF-4Q20.pdf
DBMF Semi-Annual Report: https://www.imgp.com/us/wp-content/uploads/2020/09/IMDBIETF-Semiannual-f.pdf
DBMF Prospectus: https://www.imgp.com/us/wp-content/uploads/2021/02/im_dbi_etfs_prospectus.pdf
Asset Correlation Matrix for DBMF: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=DBMF%2C+VTI%2C+TLT%2C+GLD%2C+PDBC&timePeriod=2&tradingDays=60&months=36
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also consider three variations of the Golden Ratio Portfolio and compare them with the Vanguard Wellington Fund. For more on the Golden Ratio portfolio, check out Episodes 6 and 38.
Portfoliovisualizer Analysis: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=2&startYear=1972&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&benchmark=-1&benchmarkSymbol=VWELX&portfolioNames=true&portfolioName1=Golden+Ratio&portfolioName2=SHY+Variation&portfolioName3=Emerging+Markets+Variation&asset1=TotalStockMarket&allocation1_1=42&allocation1_2=42&allocation1_3=42&asset2=LongTreasury&allocation2_1=26&allocation2_2=26&allocation2_3=26&asset3=Gold&allocation3_1=16&allocation3_2=16&allocation3_3=16&asset4=REIT&allocation4_1=10&allocation4_3=8&asset5=TreasuryBills&allocation5_1=6&asset6=ShortTreasury&allocation6_2=16&asset7=TIPS&asset8=EmergingMarket&allocation8_3=8
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In today's episode we answer some questions from Jason P. about setting up a risk-parity style portfolio at M1 and then follow up on our discussion of the Dragon Portfolio (Episode 53) with part one of an analysis of Managed Futures Fund DBMF.
Modified Golden Ratio Portfolio With SHY: Portfolio Visualizer Analysis (portfoliovisualizer.com)
David Stein's Ten Questions to Master Investing:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
DBMF Summary Fact Sheet: https://www.imgp.com/us/wp-content/uploads/2021/01/iM-DBi-Managed-Futures-Strategy-ETF-4Q20.pdf
DBMF Semi-Annual Report: https://www.imgp.com/us/wp-content/uploads/2020/09/IMDBIETF-Semiannual-f.pdf
DBMF Prospectus: https://www.imgp.com/us/wp-content/uploads/2021/02/im_dbi_etfs_prospectus.pdf
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also compare the Golden Butterfly portfolio with a David Swensen portfolio. For more on the Golden Butterfly, check out Episodes 4, 15, 17 and 36.
Links:
Swensen Portfolio: https://portfoliocharts.com/portfolio/swensen-portfolio/
Comparison Analysis: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=true&portfolioName1=Golden+Butterfly&portfolioName2=Swenson+Individual&portfolioName3=Portfolio+3&symbol1=VTI&allocation1_1=20&allocation1_2=30&symbol2=IJS&allocation2_1=20&symbol3=TLT&allocation3_1=20&symbol4=SHY&allocation4_1=20&symbol5=GLD&allocation5_1=20&symbol6=VGTSX&allocation6_2=15&symbol7=VEIEX&allocation7_2=5&symbol8=VNQ&allocation8_2=20&symbol9=IEF&allocation9_2=15&symbol10=TIP&allocation10_2=15
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It's that time again! This month's rant is dedicated to the memory of George Santayana, who said: "Those who do not remember the past are condemned to repeat it."
We also begin a discussion of Chris Cole's "Dragon Portfolio."
Links:
"Hawk And Serpent" Paper from Artemis Capital: https://artemiscm.docsend.com/view/taygkbn
Interview of Chris Cole About the Dragon Portfolio: https://youtu.be/SkfgEZtJ9LA
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This is our weekly portfolio review of the sample portfolios you can find at: https://www.riskparityradio.com/portfolios
Since it is also the end of the month, we discuss distributions for the sample portfolios as well.
We also tackle a listener question about constructing a risk-parity style portfolio with a limited set of options.
To hear more about the Macro-Allocation Principle, listen to Episodes 7 and 37.
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In this episode we answer a question from Luke S. about the accumulation phase and one from Matt R. about the Experimental Portfolios.
Links:
Portfolio Charts Analyzer Tool: https://portfoliocharts.com/portfolio/my-portfolio/
Note that we used a 25% savings rate when we ran our calculations.
The Fortress of Solitude Movie Clip (explicit): https://www.youtube.com/watch?v=rJjKP8vYjpQ
Sample Portfolios Page: Portfolios | Risk Parity Radio
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
Sorry it's just a short one!
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Today we tackle two questions. Chris wants to drawdown an inherited IRA. Tommy wants to know about the use of correlations in Risk Parity analyses.
Links:
RPAR Managers Interview: https://youtu.be/vCiPDIB6TWg
Bridgewater Strategy Paper (see page 8 for quadrant map): http://sdcera.granicus.com/MetaViewer.php?view_id=4&clip_id=75&meta_id=9141
Explanation of the Bias-Variance Tradeoff: https://elitedatascience.com/bias-variance-tradeoff
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
Additional Links:
Portfolio Visualizer Analysis of the Original and Accelerated Permanent Portfolios: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=5&absoluteDeviation=7.5&relativeDeviation=0.0&showYield=false&reinvestDividends=true&benchmark=VFINX&benchmarkSymbol=VTI&portfolioNames=true&portfolioName1=Accelerated+Permanent+Portfolio&portfolioName2=Permanent+Portfolio&portfolioName3=Portfolio+3&symbol1=UPRO&allocation1_1=25&symbol2=TMF&allocation2_1=27.5&symbol3=PFF&allocation3_1=25&symbol4=GLD&allocation4_1=22.5&allocation4_2=25&symbol5=IJS&symbol6=IEF&symbol7=SHY&allocation7_2=25&symbol8=VTI&allocation8_2=25&symbol9=TLT&allocation9_2=25
Optimized Portfolios Site: https://www.optimizedportfolio.com/category/leverage/
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also compare the All Seasons Portfolio with a Global Market Portfolio.
Links:
Global Market Portfolio Description: https://portfoliocharts.com/2021/01/05/own-the-financial-field-with-the-global-market-portfolio/
Portfolio Visualizer Comparison Analysis: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=2&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&portfolioNames=true&portfolioName1=Global+Market+Portfolio&portfolioName2=All+Seasons+Portfolio&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=23&allocation1_2=30&asset2=IntlDeveloped&allocation2_1=22&asset3=EmergingMarket&allocation3_1=5&asset4=GlobalBondHedged&allocation4_1=44&asset5=REIT&allocation5_1=4&asset6=Gold&allocation6_1=2&allocation6_2=15&asset7=LongTreasury&allocation7_2=40&asset8=IntermediateTreasury&allocation8_2=15&asset9=Commodities
Bond Correlation Matrix: https://tinyurl.com/y4x3jynu
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In this episode we answer a question from listener Brett about the Aptus Defined Risk ETF and use David Stein's Ten Questions to Master Investing to analyze it, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Additional Links:
Referenced Insurance Policy Illustration: https://photos.app.goo.gl/Bjf6u7Vyy8HZz4VF6
DRSK Fact Sheet: https://aptusetfs.com/wp-content/uploads/2021/01/DRSK-Fact-Sheet-Jan-2021.pdf
DRSK Strategy Paper: https://aptusetfs.com/wp-content/uploads/2020/09/Part-1-Sporadic-Asymmetry.pdf
DRSK Semi-Annual Report: https://aptusetfs.com/wp-content/uploads/2020/12/Aptus-10.31.20-Semi-Annual-Report-Web-Ready-Version-Public.pdf
DRSK Correlation Matrix: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=DRSK%2C+VTI%2C+VUG%2C+VIOV%2C+TLT%2C+GLD%2C+VNQ%2C+PFF&timePeriod=2&tradingDays=60&months=36
RPR Episode With Big ERN's Option Writing Strategy and Links: RPR Episode 40
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This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also discuss the distributions for the month of January and the last six months of distributions.
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In today's listener-inspired show, we analyze our sample portfolios and listener Mark B's Golden Six portfolio in the ten-year hedge fund challenge that Warren Buffett issued in 2008.
Links:
The Investors Podcast #328 with RPAR Managers: https://www.theinvestorspodcast.com/episodes/tip328-balanced-portfolio-allocation-with-damien-bisserier-alex-shahidi/
Optimized Portfolios Lazy Portfolio Analyses: https://www.optimizedportfolio.com/lazy-portfolios/
Analysis of Golden Butterfly, Golden Ratio and Golden Six: https://tinyurl.com/y9a33xq5
Analysis of Risk Parity Ultimate and All Seasons: https://tinyurl.com/yaj8qfes
Analysis of Accelerated Permanent Portfolio and Aggressive Fifty-Fifty: https://tinyurl.com/y9q68qpk
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
Additional Links:
Introducing the Aggressive Fifty-Fifty Portfolio: RPR Episode 10
Episode 24 regarding the Aggressive Fifty-Fifty: RPR Episode 24
Rebalancing the Aggressive Fifty-Fifty: RPR Episode 32
Portfolio Visualizer Analysis: Backtest Fifty-Fifty Portfolios
Support the show (https://www.riskparityradio.com/support)
In this portfolio analysis bonanza episode we tweak the Paul Merriman Two Funds for Life and Merriman Ultimate Portfolios to improve them Risk-Parity style and have a look at a portfolio submitted by Brad, one of our listeners.
Links:
Earn & Invest Podcast featuring Paul Merriman and Rich Buck: https://paulmerriman.com/tag/rich-buck/
Merriman Two-Funds For Life Portfolio Explanation: https://paulmerriman.com/2-funds-for-life/
Merriman Ultimate TDF Portfolio: https://paulmerriman.com/the-ultimate-target-date-fund-portfolio/
Merriman Google Sheet re Portfolio Glidepaths: https://docs.google.com/spreadsheets/d/1oNtsaWWXexQj30_sxEGBI08kCnrdzVdWg3dITu3ZSc8/edit#gid=0
Portfolio Visualizer Analysis of Two Funds For Life at 65 vs. Risk Parity Alternative: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&portfolioNames=true&portfolioName1=Two+Funds+For+Life+at+65&portfolioName2=Risk+Parity+Alternative&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=30&allocation1_2=30&asset2=IntlStockMarket&allocation2_1=20&allocation2_2=20&asset3=TotalBond&allocation3_1=30&asset4=GlobalBond&allocation4_1=10&asset5=TIPS&allocation5_1=10&asset6=LongTreasury&allocation6_2=30&asset7=Gold&allocation7_2=15&asset8=TreasuryBills&allocation8_2=5
Portfolio Visualizer Analysis of Ultimate Glidepath vs. Risk Parity Alternative: https://tinyurl.com/ycpfeazq
Portfolio Visualizer Analysis of Brad's Portfolio vs. Golden Butterfly: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=true&portfolioName1=Golden+Butterfly&portfolioName2=Brad%27s+Alternative&portfolioName3=Portfolio+3&symbol1=VTI&allocation1_1=20&symbol2=IJS&allocation2_1=20&symbol3=GLD&allocation3_1=20&allocation3_2=20&symbol4=TLT&allocation4_1=20&allocation4_2=20&symbol5=SHY&allocation5_1=20&symbol6=XLY&allocation6_2=20&symbol7=VGT&allocation7_2=20&symbol8=IEF&allocation8_2=20
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This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
Additional Links:
Episode 3 -- History of Portfolio Allocations Part 1: Episode 3
Episode 5 -- History of Portfolio Allocations Part 2: Episode 5
Episode 8 -- Introducing the Accelerated Permanent Portfolio: Episode 8
Portfolio Visualizer Analysis: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=6.0&relativeDeviation=0.0&showYield=false&reinvestDividends=true&benchmark=-1&benchmarkSymbol=VTI&portfolioNames=true&portfolioName1=Original+Permanent+Portfolio&portfolioName2=Accelerated+Permanent+Portfolio&portfolioName3=Portfolio+3&symbol1=UPRO&allocation1_2=25&symbol2=TMF&allocation2_2=27.5&symbol3=PFF&allocation3_2=25&symbol4=GLD&allocation4_1=25&allocation4_2=22.5&symbol5=VTI&allocation5_1=25&symbol6=TLT&allocation6_1=25&symbol7=CASHX&allocation7_1=25&symbol8=SHY
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In this episode we address a listener question from Joseph K. about Part 34 of Big ERN's SWR Series ("Using Gold as a Hedge against Sequence Risk"), which you can find here:
https://earlyretirementnow.com/2020/01/08/gold-hedge-against-sequence-risk-swr-series-part-34/
Additional Links:
RPR Episode 12: Podcast | Risk Parity Radio
Big ERN's Option Writing Portfolio Strategy (Part 3): https://earlyretirementnow.com/2019/03/27/passive-income-through-option-writing-part-3/
Homestake Mining in the Great Depression: https://www.caseyresearch.com/daily-dispatch/gold-stocks-depression/
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
Additional links:
Choose FI Episode 275: https://www.choosefi.com/board-games-and-war-games-ep-275/
Choose FI Episode 277: https://www.choosefi.com/gauging-the-weight-of-your-portfolio-ep-277/
Choose FI Episode 194: https://www.choosefi.com/the-role-of-bonds-in-a-portfolio/
Risk Parity Radio Bonds Part 1: Podcast | Risk Parity Radio
Risk Parity Radio Bonds Part 2: Podcast | Risk Parity Radio
Comparative Analysis of the Risk Parity Ultimate Portfolio Against A Rick Ferri Core Four: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=0.0&showYield=true&reinvestDividends=true&portfolioNames=true&portfolioName1=Risk+Parity+Ultimate&portfolioName2=Rick+Ferri+Core+Four&portfolioName3=Portfolio+3&allocation1_1=0&allocation1_3=0&symbol2=VUG&allocation2_1=12.5&allocation2_3=0&symbol3=VIOV&allocation3_1=12.5&allocation3_3=0&symbol4=VOO&allocation4_1=12.5&allocation4_3=0&symbol5=EDV&allocation5_1=5&symbol6=TLT&allocation6_1=15&allocation6_3=0&symbol7=GLD&allocation7_1=10&symbol8=VNQ&allocation8_1=5&allocation8_2=8&allocation8_3=0&symbol9=VNQI&allocation9_1=5&allocation9_3=0&symbol10=VIXY&allocation10_1=2.5&symbol11=PFF&allocation11_1=12.5&symbol12=UPRO&allocation12_1=2.5&symbol13=CASHX&allocation13_1=0&symbol14=TMF&allocation14_1=5&symbol15=VTI&allocation15_2=48&symbol16=VXUS&allocation16_2=24&symbol17=IEF&allocation17_2=20
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This is our weekly and monthly portfolio reviews of the portfolios you can find at: https://www.riskparityradio.com/portfolios
Additional Links:
RPR Episode 6 -- About The Golden Ratio Portfolio: Podcast | Risk Parity Radio
Rick Ferri Core Four Portfolio Reference: https://portfoliocharts.com/portfolio/rick-ferri-core-four/
Comparison Analysis of GolderRatio vs. Rick Ferri Core Four: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=2&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=0.2&relativeDeviation=20.0&portfolioNames=true&portfolioName1=Rick+Ferri+Core+Four&portfolioName2=Golden+Ratio&asset1=TotalStockMarket&allocation1_1=48&allocation1_2=14&asset2=LargeCapGrowth&allocation2_2=14&asset3=SmallCapValue&allocation3_2=14&asset4=LongTreasury&allocation4_2=26&asset5=Gold&allocation5_2=16&asset6=REIT&allocation6_1=8&allocation6_2=10&asset7=IntermediateTreasury&allocation7_1=20&allocation7_2=0&asset8=ShortTreasury&asset9=IntlStockMarket&allocation9_1=24&allocation9_2=0&asset10=TreasuryBills&allocation10_2=6
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This episode is a follow-up to Episode 7 about our basic principles of risk-parity portfolio construction, which are: (1) the Holy Grail Principle; (2) the Macro-Allocation Principle; and (3) the Simplicity Principle. Links:
Episode 7: Risk Parity Radio Episode 7
Optimal Finance Daily Episode 1361: https://oldpodcast.com/1361-annualized-returns-by-asset-class-from-1999-2018-by-sam-of-financial-samurai-on-reits-gold-investments/
Bigger Pockets Money Episode 153: https://www.biggerpockets.com/blog/biggerpockets-money-podcast-153-bill-bengen
Earn & Invest Podcast November 30, 2020: https://www.earnandinvest.com/episodes-2/supercharge-your-retirement-and-make-millions-more
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
The Portfolio of the Week is the Golden Butterfly, which you can learn more about here:
https://portfoliocharts.com/2015/09/22/catching-a-golden-butterfly/
We compare the Golden Butterfly Portfolio with the Rick Ferri Core Four at Portfolio Visualizer. Link to analysis:
https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=2&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=0.2&relativeDeviation=20.0&portfolioNames=true&portfolioName1=Golden+Butterfly&portfolioName2=Rick+Ferri+Core+Four&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=20&allocation1_2=48&asset2=LargeCapGrowth&asset3=SmallCapValue&allocation3_1=20&asset4=LongTreasury&allocation4_1=20&asset5=Gold&allocation5_1=20&asset6=REIT&allocation6_1=0&allocation6_2=8&asset7=IntermediateTreasury&allocation7_1=0&allocation7_2=20&asset8=ShortTreasury&allocation8_1=20&asset9=IntlStockMarket&allocation9_2=24&asset10=TreasuryBills
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On today's episode I relate my experiences with peer-to-peer lending as an alternative investment to see if it is something you may wish to consider. As always, we use David Stein's Ten Questions to Master Investing as the basis for our review:
1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?
Here is the Money Life podcast regarding my winning gold-price prognostication. Skip to 5:20 for just that section (but the rest is good too): https://moneylifeshow.libsyn.com/oakmarks-mcgregor-you-cant-and-wont-generate-income-like-you-used-to
We begin this episode with some nice questions about perpetual withdrawal rates and correlation metrics. Then we proceed with our portfolio reviews of the sample portfolios at https://www.riskparityradio.com/portfolios
Additional links:
Morningstar/Swedroe podcast: https://overcast.fm/+R6uKzooqI/30:25
Risk Parity Radio Bond Episodes:
Part One: https://www.riskparityradio.com/podcast/episode/4965a5d2/episode-14-which-bonds-are-right-for-your-risk-parity-style-portfolio-a-comprehensive-analysis-part-i
Part Two: https://www.riskparityradio.com/podcast/episode/4c25df5c/episode-16-which-bonds-are-right-for-your-risk-parity-style-portfolio-a-comprehensive-analysis-part-2
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I believe its all in the title.
Here are David Stein's Ten Questions to Master Investing for reference:
1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?
And here is the Masterworks website: https://www.masterworks.io/about/how-it-works
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This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
One of our portfolios, the Aggressive Fifty-Fifty, triggered a rebalancing band this week and so we also have a detailed discussion of rebalancing.
Link to referenced Kitces article: https://www.kitces.com/blog/best-opportunistic-rebalancing-frequency-time-horizons-vs-tolerance-band-thresholds/
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In this episode we answer a listener question and provide a summary and analysis of RPAR, the Risk Parity ETF. Links:
RPAR Third Quarter Review Slide Deck: https://rparetf.com/quarterly-reviews/Review--1602725674-RPAR-Risk-Parity-ETF-Quarterly-Review-3Q20.pdf
RPAR Quarterly Reviews Page, Including Webcast: https://rparetf.com/quarterlyreviews
Marketwatch List of RPAR Components: https://www.marketwatch.com/investing/fund/rpar/holdings?mod=mw_quote_tab
Portfolio Visualizer Analysis of RPAR-like Portfolio vs. Golden Ratio Portfolio:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTI&allocation1_1=10&allocation1_2=42&symbol2=VTMGX&allocation2_1=6&symbol3=VEIEX&allocation3_1=6&symbol4=XLE&allocation4_1=4&symbol5=XLI&allocation5_1=4&symbol6=XLB&allocation6_1=4&symbol7=TLT&allocation7_1=29&allocation7_2=26&symbol8=TIP&allocation8_1=29&symbol9=GLD&allocation9_1=8&allocation9_2=16&symbol10=VNQ&allocation10_2=10&symbol11=CASHX&allocation11_2=6
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This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
Support the show (https://www.riskparityradio.com/support)
In this episode, we analyze an investment in bitcoin for a risk-parity style portfolio using David Stein's 10 Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Investopedia Article About Bitcoin: https://www.investopedia.com/terms/b/bitcoin.asp
Article re $1B bitcoin loss -- now revealed as a US government seizure: https://www.marketwatch.com/story/somebody-may-have-just-gotten-away-with-stealing-1-billion-11604592280?mod=home-page
Analysis of bitcoin vs. gold vs. total stock market fund: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=GBTC&allocation1_1=100&symbol2=GLD&allocation2_2=100&symbol3=VTI&allocation3_3=100
Correlation analysis matrix of bitcoin (GBTC): https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VTI%2C+TLT%2C+GLD%2C+VNQ%2C+VNQI%2C+GBTC&timePeriod=2&tradingDays=60&months=36
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We begin with a monthly rant about "free-lunch" financial products that claim to provide stock market returns without stock market risk (and that usually bear clever names for marketing purposes).
Following the rant is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
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In this episode, which is a follow-up to Episode 25, we analyze as an investment in utilities for a risk-parity style portfolio using David Stein's 10 Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
Links and References:
Optimal Finance Daily Podcast Episode 1329: https://oldpodcast.com/1329-is-value-investing-dead-by-vitaliy-katsenelson-of-contrarian-edge-on-growth-stocks-fang/
Fi-Lexible Webinar (scheduled for Nov 1, 2020): https://www.eventbrite.com/e/free-webinar-are-you-fi-lexible-tickets-125036815481
Episode 7 re the Three Principles: https://www.riskparityradio.com/podcast/episode/4ec882cb/episode-7-how-to-construct-a-risk-parity-style-portfolio-from-basic-principles
Correlation Matrix for Utility ETFs: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VTSAX%2C+TLT%2C+GLD%2C+VNQ%2C+XLU%2C+VPU%2C+FUTY%2C+IDU&timePeriod=2&tradingDays=60&months=36
Portfolio Visualizer Backtest of Portfolios with REITs and Utilities: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTI&allocation1_1=42&allocation1_2=42&allocation1_3=42&symbol2=TLT&allocation2_1=26&allocation2_2=26&allocation2_3=26&symbol3=GLD&allocation3_1=16&allocation3_2=16&allocation3_3=16&symbol4=XLU&allocation4_1=10&allocation4_3=5&symbol5=VGSIX&allocation5_2=10&allocation5_3=5&symbol6=CASHX&allocation6_1=6&allocation6_2=6&allocation6_3=6
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This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
We also compare the All Seasons Portfolio with the Vanguard Wellesley Fund at Portfolio Visualizer. Link to analysis:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VWINX&allocation1_1=100&symbol2=VTI&allocation2_2=30&symbol3=TLT&allocation3_2=40&symbol4=VGIT&allocation4_2=15&symbol5=GLD&allocation5_2=7.5&symbol6=PDBC&allocation6_2=7.5
Link to White Coat Investor interview of Larry Swedroe and transcript:
https://www.whitecoatinvestor.com/evidence-based-investing-with-larry-swedroe-podcast-181/
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This episode takes a broad look and sector funds and compares them with the overall stock market for diversification purposes. Thanks to listener Micah for the question.
Links:
SPDR Report on the SPDR Select ETFs: https://www.sectorspdr.com/sectorspdr/Pdf/General%20Documents/Q3%202020%20Sector%20SPDR%20Quarterly%20Guide
Correlation Analysis of All Eleven SPDR Sector Funds from 2018 to 2020: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=SPY%2C+XLY%2C+XLP%2C+XLE%2C+XLF%2C+XLV%2C+XLI%2C+XLB%2C+XLK%2C+XLU%2C+XLRE%2C+XLC&timePeriod=2&tradingDays=60&months=36
Correlation Analysis of Nine SPDR Sector Funds from 1999 to 2020: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=SPY%2C+XLY%2C+XLP%2C+XLE%2C+XLF%2C+XLV%2C+XLI%2C+XLB%2C+XLK%2C+XLU&timePeriod=2&tradingDays=60&months=36
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This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
We also compare the Aggressive Fifty-Fifty Portfolio with two Dave Ramsey-Style Portfolios using the tools at Portfolio Visualizer. Relevant links:
White Coat Investor article about a Ramsey-style portfolio: https://www.whitecoatinvestor.com/dave-ramsey-asset-allocation/
Portfolio Visualizer Face-Off Analysis (including correlation analysis under the Assets tab):
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=7.5&relativeDeviation=0.0&showYield=true&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=PFF&allocation1_1=17&symbol2=TMF&allocation2_1=33&symbol3=GLD&allocation3_1=0&symbol4=UPRO&allocation4_1=33&symbol5=VIVIX&allocation5_2=25&symbol6=VMGRX&allocation6_2=25&allocation6_3=25&symbol7=VSCIX&allocation7_2=25&symbol8=VGTSX&allocation8_2=25&symbol9=VGIAX&allocation9_3=25&symbol10=VSGIX&allocation10_3=25&symbol11=VWIGX&allocation11_3=25&symbol12=IEF&allocation12_1=17
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We analyze a portfolio recently proposed in a MarketWatch article that is intended to replace the standard 60/40 stock/bond retirement portfolio.
Links:
MarketWatch article: https://www.marketwatch.com/articles/a-60-40-stocks-bond-strategy-no-longer-works-heres-what-to-do-instead-51601653163?mod=mw_latestnews
Portfolio Visualizer Comparison Analysis: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
Portfolio Visualizer Asset Correlation Analysis of the MarketWatch portfolio: Asset Correlations (portfoliovisualizer.com)
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This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
And here is a nice picture of Walden Pond on October 11, 2020:
https://photos.app.goo.gl/sksbGcENz62pb8PVA
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In this episode, which is Part Two of Two, we conclude the analysis of REITS as an investment that we began in Episode 19, using David Stein's 10 Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
We cover the questions six through ten in this episode.
Helpful links:
Backtest of REITs versus the stock market comparison:
https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=100&asset2=REIT&allocation2_2=100
Composition of the ETF VNQ: https://www.marketwatch.com/investing/fund/vnq/holdings?mod=mw_quote_tab
Correlation Matrix of the REITs and funds mentioned: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VTI%2C+VNQ%2C+VNQI%2C+REET%2C+BXP%2C+PLD%2C+O%2C+SPG%2C+AVB%2C+WY%2C+VTR%2C+WELL%2C+PSA%2C+AMT%2C+CCI%2C+DLR%2C+WPC%2C+VNO%2C+LAMR%2C+GLPI%2C+LAND%2C+IRM&timePeriod=2&tradingDays=60&months=36
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We begin with a monthly rant about the misguided idea of picking funds that have "great fund managers" and a few other topics.
Relevant links:
Recent interview of Burton Malkiel: https://animalspiritspod.libsyn.com/a-random-talk-with-burton-malkiel
Risk Parity Radio Bond Episodes:
https://www.riskparityradio.com/podcast/episode/4965a5d2/episode-14-which-bonds-are-right-for-your-risk-parity-style-portfolio-a-comprehensive-analysis-part-i
https://www.riskparityradio.com/podcast/episode/4c25df5c/episode-16-which-bonds-are-right-for-your-risk-parity-style-portfolio-a-comprehensive-analysis-part-2
Following the rant is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
We also compare the Accelerated Permanent Portfolio with two Dave Ramsey-Style Portfolios using the tools at Portfolio Visualizer. Relevant links:
White Coat Investor article about a Ramsey-style portfolio: https://www.whitecoatinvestor.com/dave-ramsey-asset-allocation/
Portfolio Visualizer analysis:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=7.5&relativeDeviation=0.0&showYield=true&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=PFF&allocation1_1=25&symbol2=TMF&allocation2_1=27.5&symbol3=GLD&allocation3_1=22.5&symbol4=UPRO&allocation4_1=25&symbol5=VIVIX&allocation5_2=25&symbol6=VMGRX&allocation6_2=25&allocation6_3=25&symbol7=VSCIX&allocation7_2=25&symbol8=VGTSX&allocation8_2=25&symbol9=VGIAX&allocation9_3=25&symbol10=VSGIX&allocation10_3=25&symbol11=VWIGX&allocation11_3=25
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In this episode, which is Part One of Two, we begin our analysis of REITS as an investment using David Stein's 10 Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
We cover the first five questions in this episode.
Helpful links:
Investopedia Article on REITs: https://www.investopedia.com/terms/r/reit.asp
Directory of REITs by sector: https://www.reit.com/investing/reit-directory?title=nly&field_rtc_listing_status_tid_selective[]=524&field_address_country_selective[]=US&sort_by=title
The Section 199A Tax Benefits of REITs: https://www.kitces.com/blog/reit-real-estate-investments-section-199a-qbi-deduction/#:~:text=Because%20under%20IRC%20Section%20199A,Qualified%20Business%20Income%20or%20QBI)
Correlation Matrix of Most of the REITs and funds mentioned: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VTI%2C+VNQ%2C+VNQI%2C+REET%2C+BXP%2C+PLD%2C+O%2C+SPG%2C+AVB%2C+WY%2C+VTR%2C+WELL%2C+PSA%2C+AMT%2C+CCI%2C+DLR%2C+WPC%2C+VNO%2C+LAMR%2C+GLPI%2C+LAND%2C+IRM&timePeriod=2&tradingDays=60&months=36
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
We also compare the Risk Parity Ultimate Portfolio with a Boglehead's Three-Fund Portfolio using the tools at Portfolio Visualizer. Here is a link to that analysis:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=2.5&relativeDeviation=0.0&showYield=true&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&allocation1_1=0&allocation1_3=0&symbol2=VUG&allocation2_1=12.5&allocation2_3=0&symbol3=VIOV&allocation3_1=12.5&allocation3_3=0&symbol4=VOO&allocation4_1=12.5&allocation4_3=0&symbol5=EDV&allocation5_1=5&symbol6=TLT&allocation6_1=15&allocation6_3=0&symbol7=GLD&allocation7_1=10&symbol8=VNQ&allocation8_1=10&allocation8_3=0&symbol9=VNQI&allocation9_1=0&allocation9_3=0&symbol10=VIXY&allocation10_1=2.5&symbol11=PFF&allocation11_1=12.5&symbol12=UPRO&allocation12_1=2.5&allocation13_1=0&symbol14=TMF&allocation14_1=5&symbol15=VTI&allocation15_2=40&symbol16=BND&allocation16_2=40&symbol17=VXUS&allocation17_2=20
The Risk Parity Ultimate is a conservative portfolio that is designed for medium and long-term needs. It is comprised of 12 different funds in six different asset classes: 40% stock funds (split into 12.5% VUG, 12.5% VIOV, 6.25% USMV, 6.25% SPLV and 2.5% UPRO), 25% long-term treasury bond funds (split into 15% TLT, 5% EDV and 5% TMF), 12.5% preferred stock funds (PFF), 10% gold (GLDM), 10% REITs (REET) and 2.5% in a stock market volatility tracking fund (VXX).
Here is the link to Episode 9, where we discuss investing in preferred stock shares and the PFF fund in particular:
https://www.riskparityradio.com/podcast/episode/48e031bb/episode-9-how-to-choose-investments-using-a-process-and-an-application-to-a-preferred-stock-fund
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This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
We also compare the Golden Butterfly Portfolio with a Boglehead's Three-Fund Portfolio using the tools at Portfolio Visualizer. Here is a link to that analysis:
https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=Gold&allocation1_1=16&asset2=LargeCapGrowth&allocation2_1=14&asset3=SmallCapValue&allocation3_1=14&asset4=LargeCapBlend&asset5=LongTreasury&allocation5_1=26&asset6=TotalBond&asset7=TreasuryBills&allocation7_1=6&asset8=TotalStockMarket&allocation8_2=40&asset9=Commodities&asset10=TotalBond&allocation10_2=40&asset11=ShortTreasury&asset12=IntlStockMarket&allocation12_1=14&allocation12_2=20&asset13=IntermediateTreasury&asset14=REIT&allocation14_1=10
The Golden Ratio is a conservative portfolio that is designed for medium to long-term needs. It is based on the mathematical golden ratio known to the ancients, which is approximately 1.618 and is represented by the Greek letter phi. It is comprised of five asset classes in seven funds that are weighted by successive applications of the golden ratio: 42% stocks (split into 14% large cap growth (VUG), 14% small cap value (VIOV) and 14% low volatility (USMV)), 26% long-term treasury bonds (TLT), 16% gold (GLDM), 10% REITs (REET) and 6% money market (SPAXX), Since 1970, it has a compounded annual growth rate (after inflation) of 7.0%, and an expected permanent safe withdrawal rate of 5.0%.
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In this episode, which is Part Two of Two, we continue our discussion from Episode 14 (Part 1), and conclude our analysis bonds as an investment using David Stein's 10 Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
We cover the last five questions in this episode.
Here are the links referenced in the episode
The correlation matrix of bond funds: https://tinyurl.com/y4x3jynu
Dan Huffman's Ultimate KI$$ portfolio with treasury bonds: https://keepinvestingsimplestupid.com/the-ultimate-ki-portfolio-with-bonds/?fbclid=IwAR3UAmCo9zLVFc5LuIjQd3pjX9MtsMbVGlu9OiNQbK7jFS8le7GzXOlLyTM
The Swanson portfolio: https://keepinvestingsimplestupid.com/the-swanson-portfolio/?fbclid=IwAR17CTGmCrrxsMfyI3mt0wuFBmMJunpiivyBlom62bO2_9C0m5O61aL8C8I
The prospectus for TLT: https://www.ishares.com/us/library/stream-document?stream=reg&product=ISHT20&shareClass=NA&documentId=925887%7E925803%7E926213%7E925554%7E925655&iframeUrlOverride=%2Fus%2Fliterature%2Fprospectus%2Fp-ishares-20-plus-year-treasury-bond-etf-2-28.pdf
The fact sheet for TLT: https://www.ishares.com/us/literature/fact-sheet/tlt-ishares-20-year-treasury-bond-etf-fund-fact-sheet-en-us.pdf
A chocolate vinegar cake recipe: https://www.bonappetit.com/test-kitchen/inside-our-kitchen/article/chocolate-vinegar-cake-recipe
Risk parity sample portfolios page: https://www.riskparityradio.com/portfolios
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
We also compare the Golden Butterfly Portfolio with a Boglehead's Three-Fund Portfolio using the tools at Portfolio Visualizer. Here is a link to that analysis:
https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=Gold&allocation1_1=20&asset2=LargeCapGrowth&asset3=SmallCapValue&allocation3_1=20&asset4=LargeCapBlend&asset5=LongTreasury&allocation5_1=20&asset6=TotalBond&asset7=TreasuryBills&asset8=TotalStockMarket&allocation8_1=20&allocation8_2=40&asset9=Commodities&asset10=TotalBond&allocation10_2=40&asset11=ShortTreasury&allocation11_1=20&asset12=IntlStockMarket&allocation12_2=20&asset13=IntermediateTreasury
For reference, the Golden Butterfly Portfolio is the brainchild of Tyler, the founder and operator of the website www.portfoliocharts.com. It is a conservative portfolio and is comprised of four asset classes in five funds that are equally weighted: 20% total U.S. stock market (VTI), 20% small cap value stocks (VIOV), 20% long-term treasury bonds (TLT), 20% short term treasury bonds (SHY) and 20% gold (GLDM). Since 1970, it has a compounded annual growth rate (after inflation) of 6.4%, and an expected permanent safe withdrawal rate of 5.3%.
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In this episode, which is Part One of Two, we begin our analysis of bonds as an investment using David Stein's 10 Questions to Master Investing, which are:
1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?
We cover the first five questions in this episode.
Here is the link to the correlation matrix referenced in the episode:
https://tinyurl.com/y4x3jynu
Risk parity sample portfolios page: https://www.riskparityradio.com/portfolios
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
We also discuss the All Seasons Portfolio in a little more depth, including why it may not be the best representative of a risk-parity style portfolio and what it is missing.
The All Seasons portfolio is a reference portfolio that is modeled after Ray Dalio's All Weather portfolio and is described in "Money: Master the Game" by Tony Robbins. It is a very conservative portfolio that is comprised of four asset classes in five funds, allocated as follows: 30% total U.S. stock market (VTI), 40% long-term treasury bonds (TLT), 15% intermediate-term treasury bonds (VGIT) 7.5% gold (GLDM) and 7.5% commodities (PDBC). Since 1970, it has a compounded annual growth rate (after inflation) of 5.6%, and an expected permanent safe withdrawal rate of 3.8%.
Here are the links I mentioned to theoretical risk-parity portfolios from the literature:
Risk Parity Portfolios: Efficient Portfolios Through True Diversification: https://www.panagora.com/assets/PanAgora-Risk-Parity-Portfolios-Efficient-Portfolios-Through-True-Diversification.pdf
Risk Parity: Silver Bullet Or A Bridge Too Far: https://www.callan.com/wp-content/uploads/2018/04/Chapter-4-from-Managing-MultiAsset-Strategies-2018.pdf
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In this episode we analyze gold as an investment using David Stein's 10 Questions to Master Investing, which are:
- What is it?
- Is it an investment, a speculation, or a gamble?
- What is the upside?
- What is the downside?
- Who is on the other side of the trade?
- What is the investment vehicle?
- What does it take to be successful?
- Who is getting a cut?
- How does it impact your portfolio?
- Should you invest?
We also discuss several bits of financial misinformation I heard on podcasts last month about small-cap value stocks and options for improving traditional 60/40 portfolios.
Links referenced in the episode:
Correlation analysis of small cap value funds versus the total stock market and large cap growth: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VTSMX%2C+VIGRX%2C+SLYV&timePeriod=2&tradingDays=60&months=36
Analysis of gold versus the total stock market since 2005: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=6.0&relativeDeviation=0.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=UPRO&symbol2=TMF&symbol3=PFF&symbol4=VGIT&symbol5=VTI&allocation5_2=100&symbol6=BND&symbol7=REET&symbol8=TLT&symbol9=GLD&allocation9_1=100
Portfoliocharts porfolio analyzer (input 100% gold yourself): https://portfoliocharts.com/portfolio/my-portfolio/
Recent Portfolio Charts article about gold, gold miners, drivers and taxes: https://portfoliocharts.com/2020/08/21/metal-money-and-the-measurable-value-of-gold/
Risk parity sample portfolios page: https://www.riskparityradio.com/portfolios
Support the show (https://www.riskparityradio.com/support)
This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also discuss the Risk Parity Ultimate Portfolio in depth, including how it was constructed and how it compares with a classic 60/40 retirement portfolio comprised of VTI (60%) and BND (40%).
The Risk Parity Ultimate is a conservative portfolio that is designed for medium and long-term needs. It is comprised of 12 different funds in six different asset classes: 40% stock funds (split into 12.5% VUG, 12.5% VIOV, 6.25% USMV, 6.25% SPLV and 2.5% UPRO), 25% long-term treasury bond funds (split into 15% TLT, 5% EDV and 5% TMF), 12.5% preferred stock funds (PFF), 10% gold (GLDM), 10% REITs (REET) and 2.5% in a stock market volatility tracking fund (VXX). Here is a link to the analyzer we used to compare the Risk Parity Ultimate Portfolio with a classic 60/40 retirement portfolio: https://www.portfoliovisualizer.com/backtest-portfolio
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This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also discuss the Aggressive Fifty-Fifty Portfolio in depth, including how it was constructed and how it compares with a Total Stock Market portfolio. Are you interested in an 80% better performance with only slightly more risk than the market? Then lend your ear.
The Aggressive Fifty-Fifty Portfolio is comprised of 33% UPRO, 33% TMF, 17% PFF and 17% VGIT. Here is a link to the analyzer we used to compare the Aggressive Fifty Portfolio with a Total Stock Market portfolio: https://www.portfoliovisualizer.com/backtest-portfolio
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In this episode we discuss how NOT to choose investments and how to employ a good process to analyze an investment. We adopt the process of David Stein's 10 Questions To Master Successful Investing and apply it to PFF, an exchange-traded fund of preferred stock.
Links:
Investopedia Article -- "How Does Preferred Stock Work?": https://www.investopedia.com/articles/stocks/06/preferredstock.asp#:~:text=Preferreds%20are%20issued%20with%20a,of%20the%20preferred%20shares%20falls.
Ishares description of PFF: https://www.ishares.com/us/products/239826/ishares-us-preferred-stock-etf
Portfolio Visualizer's Asset Correlation Analyzer: https://www.portfoliovisualizer.com/asset-correlations
"Money for the Rest of Us: 10 Questions To Master Successful Investing": https://moneyfortherestofus.com/how-to-invest-book/
The 10 Questions To Ask When Considering An Investment:
1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?
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This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also discuss the Accelerated Permanent Portfolio in depth, including how it was constructed and how it compares with A Total Stock Market portfolio. Are you interested in a 50% better performance with slightly less risk than the market? Then lend your ear.
Here is a link to the analyzer we used to compare the Accelerated Permanent Portfolio with a Total Stock Market portfolio: https://www.portfoliovisualizer.com/backtest-portfolio
Support the show (https://www.riskparityradio.com/support)
In this episode we discuss how professionals construct risk-parity style portfolios, what are the basic principles for the do-it-yourself investor, and how to implement them. The three basic principles are (1) the Holy Grail Principle; (2) the Macro-Allocation Principle; and (3) the Simplicity Principle.
Here are the links mentioned in the episode:
March draw-downs for professional risk-parity style portfolios: https://www.markovprocesses.com/blog/risk-parity-funds-in-the-coronavirus-market-rout/
Ray Dalio explains the Holy Grail principle of risk-parity style investing: https://www.youtube.com/watch?v=Nu4lHaSh7D4
Ray Dalio reveals the most basic components of most risk-parity style portfolios:
https://www.youtube.com/watch?v=KA7U8xT_2Dk
Portfolio Visualizer Asset Correlation Calculator: https://www.portfoliovisualizer.com/asset-correlations
Portfolio Charts Master Portfolio Analyzer: https://portfoliocharts.com/portfolios/
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This is our weekly portfolio review of the portfolios you can find at: https://www.riskparityradio.com/portfolios
We also discuss the Golden Ratio Portfolio in depth, including how it was constructed and how it compares with the Total Stock Market and 60/40 stock/bond portfolios over the past 50 years. Are you interested in a 30% better safe withdrawal rate? Then lend your ear.
Here is the link to the article about the Golden Ratio as mentioned in the episode: https://en.wikipedia.org/wiki/Golden_ratio
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In this follow-up to Episode 3, we explore the development of risk-parity style investing from the 1980s to the present day.
Links:
The All Weather Strategy Paper: Bridgewater Paper 2009.12 AW Info Pack.doc (granicus.com)
Risk Parity Portfolios: Efficient Portfolios Through True Diversification: https://www.panagora.com/assets/PanAgora-Risk-Parity-Portfolios-Efficient-Portfolios-Through-True-Diversification.pdf
Risk Parity: Silver Bullet Or A Bridge Too Far: Chapter-4-from-Managing-MultiAsset-Strategies-2018.pdf - Google Drive
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This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfolios
We also discuss the Golden Butterfly Portfolio in depth. Links to more information about the Golden Butterfly and the theory behind it:
https://portfoliocharts.com/2015/09/22/catching-a-golden-butterfly/
https://portfoliocharts.com/2016/04/18/the-theory-behind-the-golden-butterfly/
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In this episode we explore the ancient origins of asset allocation and diversification, and how these ideas were expanded upon and implemented from the 1950s into the 1980s.
Links:
Bava Metzia 42a: https://steinsaltz.org/daf/bavametzia42/
70-year History of Investment Consulting: https://seekingalpha.com/article/4357226-70-year-history-of-investment-consulting-1950minus-2020
Why the Best-Laid Investment Plans Usually Go Wrong: And How You Can Find Safety and Profit in an Uncertain World: https://www.amazon.com/Best-Laid-Investment-Plans-Usually-Wrong/dp/0671672924
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In this episode we review the initial performance of our six sample risk-parity style portfolios, which are: (1) the All Seasons portfolio; (2) the Golden Butterfly portfolio; (3) the Golden Ratio portfolio; (4) the Risk Parity Ultimate portfolio; (5) the Accelerated Permanent Portfolio; and (6) the Aggressive Fifty-Fifty. After that, we discuss the All Seasons portfolio in more detail. Additional information and the referenced data may be found at https://www.riskparityradio.com/portfolios
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This is a brand new podcast in the personal finance space for the do-it-yourself investor. It is about asset allocations using risk-parity principles to construct robust portfolios.
In this episode we answer five basic questions:
1. What is Risk Parity Radio?
2. Who is this podcast for?
3. Gee willikers, what does "Risk Parity" mean anyway, Uncle Frank?
4. How will will make this real and actionable for you?
5. How can you get involved?
Stay tuned for more content in future episodes!
Support the show (https://www.riskparityradio.com/support)