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
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Voices (00:01):
A foolish consistency is the hobgoblin of little minds,
adored by little statesmen andphilosophers and divines.
If a man does not keep pace withhis companions, perhaps it is
because he hears a differentdrummer, a different drummer.
Mostly Mary (00:19):
And now, coming to you from dead center on your
dial, welcome to Risk ParityRadio, where we explore
alternatives and assetallocations for the
do-it-yourself investorBroadcasting to you now from the
comfort of his easy chair.
Here is your host, frankVasquez.
Mostly Uncle Frank (00:37):
Thank you, Mary, and welcome to Risk Parity
Radio.
If you are new here and wonderwhat we are talking about, you
may wish to go back and listento some of the foundational
episodes for this program.
Voices (00:50):
Yeah, baby, yeah.
Mostly Uncle Frank (00:52):
And the basic foundational episodes are
episodes 1, 3, 5, 7, and 9.
Some of our listeners,including Karen and Chris, have
identified additional episodesthat you may consider
foundational, and those areepisodes 12, 14, 16, 19, 21, 56,
(01:13):
82, and 184.
Whoa, and you probably shouldcheck those out too, because we
have the finest podcast audienceavailable.
Mostly Mary (01:26):
Top drawer, really top drawer.
Mostly Uncle Frank (01:31):
Along with a host named after a hot dog.
Voices (01:34):
Lighten up Francis.
Mostly Uncle Frank (01:37):
But now onward, episode 428.
Today on Risk Party Radio.
Voices (01:42):
It's time for the grand unveiling of money.
Mostly Uncle Frank (01:46):
Which means it's time for our weekly
portfolio reviews.
Of the eight sample portfoliosyou can find at
wwwriskpartyradiocom On theportfolios page, we also have
some monthly distributions totalk about.
Voices (01:59):
I'm putting you to sleep .
Mostly Uncle Frank (02:01):
And some emails.
But before we get to that,First I want to thank everyone
who's already participated inour charitable matching campaign
, which we rolled out a coupleof episodes ago.
As you know, we do not have anysponsors on this podcast, but
we do have a charity we support.
It's called the Father McKennaCenter.
It supports hungry and homelesspeople in Washington DC, and
(02:23):
homeless people in Washington DCand I have a listener who we
are calling Matthew63 put up$15,000 in a matching campaign.
Voices (02:30):
The best, jerry the best .
Mostly Uncle Frank (02:32):
Which we launched last week.
I described this more inepisode 426.
We're calling it the Top of theT-Shirt Campaign.
Voices (02:41):
Yeah, baby, yeah.
Mostly Uncle Frank (02:44):
Because this money will be donated in
connection with our Walk forMcKenna that we hold in
September every year, and we'retrying to get the Risk Parity
logo to the top of the t-shirtas one of the biggest donors for
that campaign.
Voices (02:56):
Show me the money, jerry , you better yell, show me the
money.
Mostly Uncle Frank (03:01):
And I have to tell you I've been
overwhelmed by the support we'vereceived even in this first
week.
You'll see from the emails thatI read today that all of the
emails today are from donors,and since donating to the Father
McKenna Center gets you to thefront of the email line, I would
think that if you are not adonor to the Father McKenna
Center in the near future, youprobably won't hear your email
(03:23):
read for a good couple of monthsat least.
So to donate to the Top of theT-Shirt campaign, the best way
to do that is go to the donationpage for the Father McKenna
Center and I will put that inthe show notes again and you can
donate by check or by creditcard or several other ways.
But when you fill out yourlittle donation form online
there, just put in Risk ParityRadio Match or something like
(03:45):
that, so they can flag it forcounting it for the matching
purposes.
Think of it as Red Hot ChiliPepper Fi, where Fi stands for
financial independence.
So I hope you will participate.
But now it's time to get tothose emails and so, without
(04:08):
further ado, here I go onceagain with the email.
And First off.
First off, we have an emailfrom Anonymous.
Voices (04:20):
I have no name.
Mostly Uncle Frank (04:24):
And Anonymous writes.
Mostly Mary (04:26):
Hey, frank and Mary .
I just made a four-figuredonation motivated by the
current matching challenge.
While I wish to stay anonymous,I wanted to reach out to thank
both of you for what you do forus DIY investors and for the
homeless, and I also wanted tothank Anonymous, donor number
one, for their great idea andgenerosity.
It makes me immensely happy tobe able to contribute something
(04:47):
to your efforts.
Voices (04:50):
So shines a good deed in a weary world.
Mostly Uncle Frank (04:57):
Well, that's what I'm talking about.
Voices (04:59):
That's what I'm talking about.
Mostly Uncle Frank (05:01):
When I say we have the finest podcast
audience available, it is notjust a tagline.
You guys are great.
Voices (05:08):
That's gold, jerry gold.
Mostly Uncle Frank (05:11):
You ask great questions, you're very
thoughtful and you're verygenerous.
Mostly Mary (05:15):
Top drawer, really top drawer.
Mostly Uncle Frank (05:19):
Sister Francine would be proud.
Voices (05:22):
You can't lie to a nun.
We've got to go in and visitthe penguin.
Mostly Uncle Frank (05:27):
So I know you didn't have a question this
time, but the next time you domake sure you remind me in your
email of your donation so I canmove you to the front of the
line several times over.
Yes, thank you for your supportand thank you for your email.
Voices (05:45):
Five grand, no problem.
We'll have it for you for yoursupport and thank you for your
email.
Five grand, no problem.
We'll have it for you in themorning.
Let's go, elwin, we're on amission from God.
Mostly Uncle Frank (05:53):
Second off.
Mostly Mary (05:55):
Second off we have an email from Tim Timber, and
Tim writes Frank and Mary, youbriefly mentioned a few months
ago your son's use of a riskparity portfolio for
intermediate term savings.
Voices (06:09):
Young America.
Yes, sir.
Mostly Mary (06:11):
Can you expand a bit on the use cases for this
and when it may be a good or badidea?
My use case is for building mytaxable investments now that we
have a sufficient emergency fundin our high yield savings
account.
My uses for this money will befor a potential car in a three
to six year time frame andeventually for seed money to
start an early retirement Rothconversion ladder approximately
(06:35):
five years of expenses in about10 years.
Are these different enough thatI need two strategies?
Second question stack them upor save one for later?
Mary's choice.
How should I think about taximplications of strategies for
(06:57):
rebalancing a more complexportfolio while we are in our
peak earning years?
I assume you sit on it for ayear to get everything in
long-term capital gains beforeyou touch anything.
I am always hesitant to touchanything outside my
tax-advantaged accounts, which Ialso don't honestly touch
either.
I feel like I'd like to get toknow Shannon's demon.
(07:17):
Maybe some heavy metalrecommendations, just looking
for confidence-building guidance.
Thanks, tim, and Gwen's heretoo saying hi, frank Timmer.
Mostly Uncle Frank (07:27):
Yes, of course, what I think?
Maybe Timmy is suffering fromsomething called Attention
Deficit Disorder or ADD.
It's very common in kids hisage.
Mostly Mary (07:37):
Oh Timmer.
Well, that certainly wouldexplain it.
Mostly Uncle Frank (07:41):
All right, it's good to hear from you, Tim
and Gwen.
Just to clue everybody in, Timand Gwen are friends of ours.
Gwen is also known as the FieryMillennial.
Voices (07:51):
Fire, fire, fire fire.
Mostly Uncle Frank (07:54):
And she was a stray millennial that I
brought home one day, as SisterFrancine would have done.
And there's a story there, butwe won't be telling it right now
Wouldn't be prudent at thisjuncture.
We won't be telling it rightnow Wouldn't be prudent at this
(08:15):
juncture.
Gwen and Tim have a relativelynew podcast called Fire Takes.
I'll read you the descriptionhere.
Gwen and her husband, tim, givetheir hot fire-coded takes on
interesting Reddit and Internetstories.
Tim and Gwen blend humor,personal anecdotes and practical
advice, making complexfinancial topics accessible and
engaging.
Find more at wwwfiretakespodcom.
Voices (08:39):
That is the straight stuff, oh funk master.
Mostly Uncle Frank (08:42):
And I have listened to it and it is quite
entertaining.
What do you mean?
Funny?
Funny how.
It's relatively new, but ifyou're familiar with Ramit
Sethi's Couples FinancialProblems podcast, this one is
also in that vein and talksabout relationship problems in
the context of financialindependence and related topics.
Voices (09:01):
The beatings will continue until morale improves.
Daddy is home.
Mostly Uncle Frank (09:07):
But now that I'm done shilling for your
podcast, let's get to yourquestions.
But now that I'm done shillingfor your podcast, let's get to
your questions.
All right, your first questionis about the use of risk parity
portfolios for intermediate termsavings, and let me explain to
the rest of the audience whatwe're talking about here.
And this is what our eldest sondoes, and we recommend it to
all of our children.
Voices (09:28):
Why?
What have children?
Mostly Uncle Frank (09:29):
ever done for me.
So when you're accumulatingmoney as you're beginning your
working life, you're going tohave your long-term accumulation
accounts.
Those are usually your 401ksand things, and we recommend
that's 100% equities because youwant it to grow in the long
term.
Then it's common also to have acertain amount of cash, whether
you call that an emergency fundor whatever you want to call it
.
But then we get to the questionof what do we do about what's
(09:51):
in between that you're savingfor something, but it's years
away.
You're not even sure whenyou're going to buy it.
It could be a down payment on ahouse, it could be a new car.
Later it could be anything.
Last thing our eldest sonbought was solar panels with
this mechanism.
So that is your intermediateterm savings, and the solutions
for that typically are not beenthat great.
(10:12):
Most people say, well, justsave more cash in a different
place for that.
Okay, you can do that, it'llwork.
But what you can also do is usea risk parity style portfolio
for that intermediate termsavings bucket, and the reason
this works for this purpose isbecause of these characteristics
of a portfolio like the goldenbutterfly or golden ratio, that
(10:34):
these kind of portfolios haveshort drawdowns.
So the max drawdown for one ofthese kind of portfolios is
three or four years.
If you know that, then you canhave confidence that you're not
going to be in some 10-year holeas if you were in all stocks or
something like that, but you'regoing to get some growth out of
the thing.
And so our son uses a variationof the golden ratio portfolio
(10:58):
that's slightly more aggressivethan the sample one for this
purpose.
So your uses, or your expecteduses, are a potential car in a
three to six year time frame andseed money for early retirement
Roth conversion ladder, and Ithink both of those are ideal
examples of things that youcould use this kind of portfolio
for, because there is nospecific timeframe for them.
(11:22):
It's just something you want todo at some point in the future.
There's no hard deadline whereyou actually need to spend the
money.
You can figure that out later,but you don't want to be in a
position where you suffer a bigdrawdown that goes on for years
and years and years.
So this is a good example ofwhat you can use this kind of
risk parity portfolio forintermediate-term savings, and I
(11:43):
don't think you need differentstrategies for these.
You can just do this all in onebucket.
This is your intermediate-termsavings bucket and it can go for
the car, it can go for the Rothconversion ladder later and you
might have other uses for itMaybe some solar panels.
But then they switched from theSwingline to the Boston stapler.
But I kept my Swingline staplerbecause it didn't bind up as
(12:04):
much and I kept the staples forthe Swingline stapler.
And so no, they're notdifferent enough that you would
need two different strategies.
They're very similar in fact.
What's also nice about doingthis when you're young is you
get into kind of practice ofwhat it's going to be like when
you actually manage yourretirement portfolio.
But you're doing it on asmaller scale.
So, as I mentioned, I would lookat something like the golden
(12:27):
butterfly or golden ratioportfolios.
The kind of variation that oureldest son uses is taking the
golden ratio portfolio kind ofoff the shelf.
As to the stock portion at thetop the 42%, the treasury bond
portion, the 26% and the 16% ingold Although I think he might
have some gold miners stuffed inthere as well With the 10%
(12:48):
allocation and the 6% allocation.
He's more aggressive with that.
I think he's got someindividual REITs in there as
well With the 10% allocation andthe 6% allocation.
He's more aggressive with that.
I think he's got some individualREITs in there for that and has
spread out maybe that 6% justamongst all the other assets,
because you really don't need anextra cash allocation when
you're using this portfolio forthis purpose, because you
already have cash somewhere else.
So cash doesn't serve reallyany purpose in your intermediate
(13:11):
accumulation portfolio.
But if you want to come up withan idea and just send it back
in as a question, I'm sure a lotof our listeners would be
interested in this, either forthemselves or their kids, and we
can talk about what you've comeup with and I can tell you what
I think of it.
And it would be a nice littleexercise for our program Kimmer,
because that's how we roll here.
Voices (13:33):
One, two, three, four Timber.
Mostly Uncle Frank (13:40):
Timber.
Now getting to your secondquestion.
First, the most important partof your question is certainly
heavy metal recommendations.
The most important part of yourquestion is certainly heavy
(14:01):
metal recommendations.
Since we've been talking aboutour eldest son, I will give you
his favorite thing to listen towhen he was about 12.
It is the classic Iron Maiden.
Put them in the Iron Maiden,iron Maiden, excellent Execute
(14:26):
them, bodious, and his Uncle,mike, I believe, gave him this
album Fear of the Dark.
Mostly Mary (14:47):
And of course, the lead singer for Iron Maiden is
none other than Bruce Dickinson.
Voices (14:52):
Yes, the Bruce Dickinson , other than Bruce Dickinson.
Yes, the Bruce Dickinson, and Igotta tell you, fellas, you
have got what appears to be adynamite sound coming from you,
bruce.
That means a lot.
Mostly Uncle Frank (15:01):
Yeah, I mean , you're Bruce Dickinson if you
take what I believe is the firsttrack in that album, be quick
or be dead.
That is a classicallyconstructed heavy metal song for
you, but make sure you get thewhole album.
(15:23):
I guess you don't call it analbum anymore and play it over
and over again in the car whenyou and Gwen are driving around,
because that's how our son usedto like to listen to it.
But now getting to the rest ofyour question about the tax
(15:51):
implications and strategies forrebalancing a more complex
portfolio while you're in yourpeak earning years and we'll go
back to that intermediate termrisk parity style portfolio,
because we're talking aboutsomething that's in a taxable
account.
Obviously, I don't have anyproblems rebalancing anything
that's not in a taxable account,but what you want to do in a
taxable account, especially ifyou're adding money to it, is
(16:13):
don't rebalance it at all.
You can avoid it but insteadjust use your new contributions
to buy whatever is low.
So it's the exact opposite ofthe way we take money out.
When we take money out of theseportfolios, we sell from the
best performer, the most recentbest performer.
When you're putting more moneyinto it, you buy more of the
thing that's doing the worst andyou also reinvest any dividends
(16:36):
that way, because the fewertransactions you have with
respect to that on the salesside in particular, the less
taxes you're going to be paying.
It's actually not that bad,though, if it's capital gains
taxes, because you're going tobe in the zero or 15% tax
bracket for that anyway.
One thing about having one ofthese kind of portfolios, though
as an intermediate termaccumulation portfolio, is that
(16:58):
you actually have more taxopportunities in it because you
may be able to do some tax lossharvesting.
Chances are you're going tohave something in the portfolio
that's performing badly at aparticular time and has
accumulated some losses.
You can sell that, buysomething similar to it to get
the loss out of it.
Either just take the loss ifit's small enough or use that to
(17:18):
offset a capital gain insomething else.
So this is way more taxefficient than holding something
like a savings account.
That's something that I don'tthink people really appreciate
that if you have lots and lotsof money in a high-yield savings
account or something similar tothat, that is a terrible tax
thing in a taxable account,because it's just shooting out
(17:39):
ordinary income and all of thegains from it are taxed
immediately at the highest rateyou're going to be paying.
That's why people with a lot ofthat kind of income are better
off using something like thatbox ETF we talked about in the
last episode, and so there iskind of a little paradox there
that having a more complicatedportfolio with a few more things
(17:59):
in it is often better for youon the tax side than holding one
thing, particularly if that onething is paying ordinary income
.
Now, as for Shannon's demon,well, we'll have to talk about
that another time.
Voices (18:11):
You can't handle the dogs and cats living together.
Mostly Uncle Frank (18:15):
It was very nice of you to write in.
It was even nicer of you todonate to the Father McKenna
Center.
Voices (18:21):
Yeah, baby, yeah.
Mostly Uncle Frank (18:23):
I wish you and Gwen well and thank you for
your email, dude it's Timmy.
Voices (18:28):
No way they're ridiculing that singer.
Come on, let's get out of here.
And the lords of the underworldDarkness fills my heart with
(18:48):
pain.
That was awesome.
Yeah, Timmy rules.
Dude, this is a no-brainer.
Mostly Uncle Frank (18:58):
This year's Battle of the Bands winner and
the band that gets to open forPhil Collins is Timmy.
Voices (19:06):
We did it dude.
Listen to that.
Mostly Uncle Frank (19:08):
Next off, we have an email from Mark.
Voices (19:19):
Next off an email from Mark.
Mostly Uncle Frank (19:21):
And Mark writes.
Mostly Mary (19:22):
Hi Frank and Mary.
I absolutely love the work thatyou guys are doing.
Your podcast and the RationalReminder podcast are the only
two podcasts I try to listen tothe same day.
They come out Sweet, unless.
Rational Reminder is havinganother episode with Scott
Cederberg.
Am I right?
Or am I right?
Or am I right?
Right, right, right.
Voices (19:42):
Right, right right.
Mostly Mary (19:45):
I've been meaning to donate to the Father McKenna
Center for the past few months,but I just haven't gotten around
to it.
Cue the.
It's not that I'm lazy, it'sjust that I don't care.
Voices (19:54):
Soundbite it's not that I'm lazy it's that I just don't
care.
Mostly Mary (19:59):
Fortunately, your constant yammering about the top
of the t-shirt contest in thelast two episodes finally
motivated me to send in a $50donation today.
Voices (20:08):
Groovy baby.
Mostly Mary (20:10):
I know that it's for a good cause and that the
donation will be put to good use, with you guys involved.
And who doesn't love a matchingcampaign?
Mostly Uncle Frank (20:18):
It's all one big crapshoot, anywho.
Mostly Mary (20:20):
Anywho, my wife and I are quickly approaching
retirement and for the past fewmonths, I've taken a deep dive
into learning all I can aboutmanaging our finances during
retirement.
That's what led me to yourpodcast, as well as the Rational
Reminder podcast, Tyler'sawesome portfolio charts website
and several other great sourceslike testfoliocom.
(20:41):
Unfortunately, there isseemingly much more information
available about the accumulationphase of investing for
retirement than there is aboutthe decumulation phase, despite
the fact that the decumulationis so much more complex.
That leads me to my questionwhat other resources would you
recommend to me and your otherlisteners to help us increase
(21:01):
our knowledge and understandingabout managing our finances
during retirement?
It can be other podcasts, books, websites or any other useful
resource that you have foundover the years.
Once you have compiled thislist, maybe you can have your
crack team of top men, add anadditional resources page to the
website and include a list ofthose resources.
Voices (21:21):
Forget about it.
Mostly Mary (21:23):
Cue the.
I don't think I'd like anotherjob.
Soundbite.
Mostly Uncle Frank (21:26):
You think anybody wants a roundhouse kick
to the face while I'm wearingthese bad boys?
Mostly Mary (21:30):
Thanks again for all that you do.
Guys, keep up the fantasticwork.
Regards Mark.
Voices (21:35):
We have top men working on it right now.
Who Top men?
Mostly Uncle Frank (21:46):
Well, I feel like I should have a matching
campaign more often then.
This has really resulted in alot of great emails this week.
But getting to your question,yeah, this sounds like an easy
thing to do, but it's actuallyvery difficult to do and very
time-consuming, because ifyou're going to construct a list
(22:08):
of resources, it needs to bekept up to date, because a lot
of things keep changing withrespect to retirement, mostly
with respect to legalconsiderations and tax
considerations in particular,and the vast quantity of
material goes to things likethat.
It's also the case that most ofwhat is in retirement planning
(22:29):
does not apply to you, that aperson running a financial
advice practice has to know orbe able to look up a whole bunch
of different things.
That don't apply to most peopleand they only apply to one
segment of clients.
This is often why people inadvisory practices, whether
they're financial advice or taxadvice or something else, will
(22:49):
focus on one particular kind ofclient, and actually that's
probably, in most cases, thebest kind of advisor to go to.
You want to know that theyserve a whole lot of people who
are in your same circumstances,because they are more likely to
know all the ins and outs ofthat, even if they don't know
something.
That's more esoteric anddoesn't come up that often.
(23:11):
So the kinds of places I wouldordinarily look for sort of
basic financial advicepertaining to retirees would be
the websites of fee-onlyfinancial advisors.
One of them that's good is AndyPankow's website.
He's got a lot of freeresources there.
I'll link to that in the shownotes.
Cody Garrett also has a goodwebsite.
(23:33):
I think he's got a littlecourse you can take if you want
to build out a plan for yourselffor a couple hundred bucks.
Sean Mullaney is the FI tax guywho's kind of an expert in 401ks
and SEP IRAs and things likethat of an expert in 401ks and
SEP IRAs and things like that.
Cody and Sean are actuallywriting a book together on tax
strategies for early retirees inparticular, but I think it's
(23:54):
going to apply to later retireestoo.
I believe that book is comingout in August.
It might be something you wantto check out.
And then, if you're looking forsomething more of like a
reference book, wade Pfau's book, which I can link to in the
show notes, is kind of atextbook manual for financial
advisors.
That covers all kinds of topics.
It's not something you wouldsit down and read, but something
(24:15):
you would use to look things upin these days because we have
things like ChatGPT.
You can have a lot ofconversations about it there,
but you need to be carefulbecause a lot of the information
on there is inaccurate orobsolete.
Voices (24:39):
Okay, turn it on.
It's a piece of crap.
It doesn't work.
I could have told you that.
Mostly Uncle Frank (24:50):
But those are the kinds of places I would
look.
I would definitely be lookingat people who are in the
financial advisory business orrelated businesses, because they
have a lot of incentives tokeep their information up to
date and to make sure there'snothing inaccurate about it,
whereas somebody like me orother do-it-yourselfer does not
have that kind of incentive andfrom what I've seen of people
(25:12):
like myself who try to puttogether such lists, it's too
much work to keep them updated,forget about it, and so they
become obsolete after a time.
I must be feeling charitabletoday with all this giving going
on, since I'm saying nicethings about financial advisors.
Voices (25:28):
Surely you can't be serious.
Mostly Uncle Frank (25:29):
I am serious and don't call me Shirley Bet.
You thought you'd never hearsomething like that from me, but
there actually are a lot ofgood people out there in the
world.
Voices (25:38):
A lot of them just have bad incentives as we're adding a
little something to thismonth's sales contest.
As you all know, first prize isa Cadillac Eldorado.
Anybody want this month's salescontest?
As you all know, first prize isa cadillac eldorado.
Anybody want to see second?
prize.
Second prize a set of steakknives.
Mostly Uncle Frank (25:56):
Third prize is you're fired now if you're
looking for material more aboutportfolio construction, then I
would not look to thosefinancial advisor type sites.
That's better on the planningside.
If you want something that's atthe level of this podcast or
higher, you really need to lookat books that are written by
(26:17):
professionals in the businessand are not directed at popular
personal finance audiences.
So you'd look at books andwhite papers by people like
Antti Ilmanen and they're calledthings like Expected Returns
and he's at AQR with CliffAsness.
They also write a lot of whitepapers there.
So if you're looking for alibrary of stuff, you would go
there and do some research.
(26:38):
I'm also remiss in failing tomention Michael Kitsis, which I
should have mentioned in thefirst place, because he covers
both of these things.
He's one of the few peoplethat's in financial advice that
I would actually trust to givehigher level academic kind of
work, and if you go to his site,he's been writing articles for
almost a couple of decades now,and so there's a whole lot of
(27:00):
information there, and when youguys send me a question, I will
frequently go there and see whathe's written, because that is
an extremely high signal tonoise ratio.
There's a book.
It's about 10 years old nowit's called the Aspirational
Investor.
That I would also look at.
I really thought it was spot onwhen I was developing our own
(27:20):
strategies.
That one is written by AshfinChhabra, who was a former chief
investment officer at MerrillLynch Wealth Management.
That was one of the books thatconvinced me that I was on the
right track with respect to thisportfolio construction stuff
when I read it about 10 yearsago.
Now, someone who also alreadyhas some great resources is
(27:41):
Tyler at Portfolio Charts, andif you go over and even just
read through the sampleportfolios, there's all kinds of
information embedded in therewith all kinds of links to
articles and other things.
And if you just read throughall of the portfolios in there,
you would have a betterunderstanding than most
financial advisors of what thesethings are, how they work and
(28:03):
what the history of them hasbeen.
And then, finally, I'd beremiss of not mentioning that if
you just go to the RSS feedpage for this podcast, I tried
to put links to all of theresources in the show notes, so
you'll find all 428 episodes onone page with all the show notes
and you can word search thatfor any topic.
(28:24):
I can't guarantee that all thelinks still work, but the
material is there and usuallythat podcast will say something
about whatever that material was.
That is the closest thing Ihave to an additional resources
page and that's all you're goingto get out of me for that.
Voices (28:40):
That and a nickel.
Get your hot cup a jack squat.
Mostly Uncle Frank (28:46):
Hopefully all that that helps and thank
you for your email last off lastoff, I have an email from luke
excellent, everything is goingas planned and luke writes hi
frank and the newly crownedqueen mary.
Mostly Mary (29:24):
I just want to say thank you for answering my
questions during episode 421.
As usual, you didn't disappoint.
I also found the Cabocloissoundbites very amusing, even
though I'm probably the onlylistener who understood any of
it.
Voices (29:38):
Parce que vive le Québec .
Puis je me souviens.
Mostly Mary (29:41):
As a token of appreciation and to further
support a good cause, I havedoubled my contribution to the
Father McKenna Center.
Voices (29:48):
Double your pleasure double your fun.
Mostly Mary (29:52):
I added a note, so it counts toward the
contribution match campaign yourecently launched.
On a somewhat related note, Iwanted to say that your story
about Sister Francine was veryinspiring.
I know your podcast is meant tobe about personal finance, but
I'd be grateful for more of thattype of content.
Maybe you should write yourmemoirs, but I know you're not
looking for another job.
Mostly Uncle Frank (30:12):
Looks like you've been missing a lot of
work lately.
I wouldn't say I've beenmissing it, Bob.
Mostly Mary (30:17):
No questions today, but I do have one more offer to
express my gratitude.
You mentioned in a recentepisode that the person who
offered to help you with yourwebsite got busy and couldn't
help.
I'm not a professional webdeveloper but, as mentioned
previously, I'm in softwareengineering and I think I know
enough to improve on yourmethods.
Oh sure, I think I've improvedon your methods a bit too.
(30:39):
I employed some Chiara Scuroshading.
Would you be interested in mehelping out?
No pressure, of course.
It's your podcast and yourwebsite.
Keep up the good work.
I'll be listening.
All the best, Luke.
Voices (30:54):
Use the force, Luke, Let go Luke.
Mostly Uncle Frank (31:02):
Nice emails today.
Huh yeah, the best, mary, thebest.
Well, thank you so much foryour wonderful email, luke, and
thank you for your offer.
You are correct that I do wantto keep this podcast focused on
personal finance and portfolioconstruction in particular, but
I don't mind talking about thewhys of things every once in a
(31:26):
while, about life, the universeand everything.
Voices (31:30):
Now, when men get to fighting, it happens here and it
finishes here Two men enter,one man leaves.
Two men enter, one man leaves.
Mostly Uncle Frank (32:05):
But I'd rather that just come out in the
due course of whatever elsewe're talking about here.
I don't want to end up soundinglike Stuart Smalley.
Voices (32:14):
Stuart Smalley is a caring nurturer, a member of
several 12-step programs, butnot a licensed therapist.
I'm going to do a terrific showtoday and I'm going to help
people because I'm good enough,I'm smart enough and doggone it.
People like me.
Mostly Uncle Frank (32:37):
Or maybe Jack Handy.
Voices (32:39):
And now, Deep Thoughts by Jack Handy.
Sometimes, when I feel likekilling someone, I do a little
trick to calm myself down.
I'll go over to the person'shouse and ring the doorbell.
When the person comes to thedoor, I'm gone.
But you know what I've left onthe porch?
(33:00):
A jack-o'-lantern with a knifestuck in the side of its head
with a note that says you.
Mostly Uncle Frank (33:07):
And I would be interested in having you help
me out or at least take a lookat it.
So I will send you an email andmaybe we can do a Zoom and chat
about that, Because one of theother purposes of this podcast
that has evolved over time, atleast for me is to simply make
new acquaintances and make newfriends, and in my experience
that is actually the best waythat friendships are formed as
(33:30):
adults.
When two people are in the sameenvironment, one of them sees
another one who struggles withsomething as I struggle with
websites and things like thatand simply says, hey, I know
something about that, Maybe Icould help.
That old saying is quite true Afriend in need is a friend in
deed, and I will happily put upwith your Canadian-ness.
Voices (33:52):
Oh, good day.
Oh, good day.
Good day, good day,coo-loo-coo-coo-coo-coo-coo,
coo-loo-coo-coo-coo-coo-coo-coo,good day, how's it going?
I'm Bob McKenzie.
This is my brother, doug.
How's it going, eh?
Mostly Uncle Frank (34:04):
And your Frenchness Now go away, or I
shall taunt you a second time.
So thank you again for yourcontributions.
Voices (34:19):
And thank you for your email.
Mostly Uncle Frank (34:21):
And now for something completely different.
And the something completelydifferent is our weekly
portfolio reviews of the eightsample portfolios you can find
at wwwriskprioritycom on theportfolios page Boring.
We also have our monthlydistributions to go through.
But just looking at the markets, the S&P 500, represented by
the fund VOO, is up 0.9% for theyear now.
(34:45):
The NASDAQ 100, represented byQQQ, is up 1.69% for the year
now.
Small cap value continues tolag.
Representative fund VIOV isdown 11.5% for the year now.
But gold continues to shine.
Voices (35:01):
I love gold.
Mostly Uncle Fra (35:05):
Representative fund GLDM is up 25.49% for the
year.
Long-term treasury bonds,represented by the fund VGLT,
are up 0.73% for the year.
Reits, represented by the fundREET, are up 4.21% for the year.
Commodities, represented by thefund PDBC, are now down for the
year.
They're down 3.46% for the year, probably due to lower oil
(35:29):
prices, I would suspect.
Preferred shares, representedby the fund PFFV, are down 0.05%
for the year and managedfutures are still managing to
drag along.
Representative fund DBMF isdown 2.92% for the year.
Moving to these portfolios,first one is our reference
portfolio, the all seasons.
(35:50):
It's only 30% in stocks and itswhole stock market fund, 55% in
intermediate and long-termtreasury bonds and the remaining
15% in gold and commodities.
It is up 0.66% for the month ofMay.
It's up 2.78% year to date andup 11.5% since inception, july
2020.
(36:10):
We are distributing out of itat a 4% annualized rate.
So for the month of Junethat'll be $31.
We'll take it out of the goldfund, gldm, which has been the
best performer recently.
That'll be $187 year to dateand $1,877 since inception in
July 2020.
And all these portfolios didstart with about $10,000 in them
(36:33):
for reference.
Moving to these kind of breadand butter portfolios, first
one's Golden Butterfly.
It's 40% in stocks divided intoa total stock market fund and a
small cap value fund, 40% intreasury bonds divided into long
and short and the remaining 20%in gold.
It's up 1.57% for the month ofMay.
It's up 3.85% Year-to-date.
(36:53):
It's up 39.09% since inception,july 2020.
We are distributing out of thisat a 5% annualized rate.
That will be $45 for the monthof June and it will come out of
gold as well.
Gldm that'll be $272distributed year-to-date and
$2,573 since inception in July2020.
(37:16):
Next one's golden ratio it is42% in stocks divided into a
large-cap growth fund and asmall-cap value fund, 26% in
long-term treasury bonds, 16% ingold, 10% in managed futures
and 6% in cash in a money market.
It's up 2.21% month to date.
It's up 2.33% year to date andup 32.98% since inception in
(37:39):
July 2020.
Now this one we alwaysdistribute from the cash portion
of it and just refill that uponce a year.
So it'll be $43 for the monthof June.
It'll come from the cash.
That'll be $259 year-to-dateand $2,521 since inception in
July 2020.
Next, one's the risk parityultimate.
(38:00):
I'm not going to go through all14 of these funds in this
portfolio, but it is up 1.78%for the month of May, up 1.92%
year-to-date and up 21.85% sinceinception in July 2020.
We are distributing out of thisone at a 5% annualized rate
currently, which will involvedistributing $39 for the month
(38:20):
of June, and that will come outof the Bitcoin.
This portfolio has a 1%allocation to Bitcoin, although
it looks more like 2% at themoment.
That will be $236 year-to-dateand $2,686 since inception in
July 2020.
Now moving to theseexperimental portfolios that all
involve leveraged funds.
(38:42):
Do not try this at home.
Voices (38:45):
You have a gambling problem.
Mostly Uncle Frank (38:47):
First one's the accelerated permanent
portfolio.
This one's 27.5% in a leveredbond fund TMF, 25% in a levered
stock fund UPRO, 25% in PFFV, apreferred shares fund, and 22.5%
in gold GLDM.
Well, it looks more like 27% ingold right now.
It is up 0.3% for the month ofMay.
(39:09):
It's up 1.93% year-to-date andup 2.98% since inception in July
2020.
We're distributing $37 out ofit from cash that has
accumulated.
We're doing that at a 6%annualized rate for this
portfolio.
It'll be $230 year-to-date and$2,860 since inception in July
2020.
(39:30):
Next one's the aggressive 50-50.
This is the most levered andleast diversified of these
portfolios and also the worstperformer.
If you wonder why we keep itaround, it is as a good learning
experience to see what happenswhen you have a lot of leverage
and not that muchdiversification.
Voices (39:48):
I'm gonna end up eating a steady diet of government
cheese and living in a van downby the river.
Mostly Uncle Frank (39:57):
So this one is one-third in a leveraged
stock fund, upro, one-third in aleveraged bond fund, tmf, the
remaining third in preferredshares and an intermediate
treasury bond fund.
It's up 1.1% for the month ofMay.
It's down 4.87% year-to-dateand down 16.21% since inception
in July 2020.
We are distributing out of thisone at a 6% annualized rate.
(40:20):
That'll be $30.
It's going to come out of theIntermediate Treasury Bond Fund,
vgit.
So it'll be $192 year-to-dateand $2,861 since inception in
July 2020.
Moving to our next experimentalportfolio, the levered golden
ratio.
This one is 35% in a compositelevered fund called NTSX, that
(40:41):
is, the S&P 500 and treasurybonds levered, up 1.5 to 1.
20% in gold, gldm, 15% in aninternational small cap value
fund, avdv.
10% in KMLM, which is a managedfutures fund, 10% in a levered
bond fund, tmf, and theremaining 10% divided into two
(41:03):
levered funds, udao and UTSL.
Let follow the DAO and autilities index respectively.
This one is our big winner forthe year so far, which is good
for it because it has struggledin the past.
It's up 2.57% month to date.
It's up 5.1% year to date andup 0.45% since inception in July
(41:23):
2021.
It's a good example of whathappens when you start at a
really bad time to startwithdrawing.
We will be distributing $34 outof it from GLDM that's the gold
fund.
That's at a 5% annualized rate.
It'll be $201 year-to-date and$1,757 since inception.
And moving to our lastportfolio, the Optra portfolio,
(41:46):
it's an example of areturn-stacked configuration and
it's less than a year old.
So this one is 16% in a leveredstock fund, upro, 24% in an
all-world value fund, avgv, 24%in a treasury strips fund, govz,
and the remaining 36% dividedinto gold and managed futures.
(42:08):
It's up 3.04% month to date.
It's up 2.83% year-to-date andup 5.83% since inception in July
2024.
We'll be distributing $50 outof cash that is accumulated.
It's at a 6% annualized rate.
That's for the month of June.
That'll be $256 distributedyear-to-date and $562 since
(42:30):
inception in July 2024.
And that concludes our weeklyand monthly portfolio reviews.
But now I see our signal isbeginning to fade.
If you have comments orquestions for me, please send
them to frank atriskparityradarcom.
That email is frank atriskparityradarcom.
Or you can go to the website,wwwriskparityradarcom, put your
(42:51):
message into the contact formand I'll get it that way.
If you haven't had a chance todo it, please go to your
favorite podcast provider andlike, subscribe.
Give me some stars, a follow, areview.
That would be great, okay,thank you once again for tuning
in.
This is Frank Vasquez with RiskParity Radio signing off.
Voices (43:14):
You've got to watch them .
Big red coffee dead.
Snake eyes in heaven, thebeef's in your head.
You've got to watch them.
Big red coffee dead.
Snake eyes in heaven, thebeef's in your head.
Big red red beef dead.
(43:35):
Big red.
Mostly Mary (43:38):
The Risk Parody Radio Show is hosted by Frank
Vasquez.
The content provided is forentertainment and informational
purposes only and does notconstitute financial, investment
tax or legal advice.
Please consult with your ownadvisors before taking any
actions based on any informationyou have heard here, making
sure to take into account yourown personal circumstances.
A foolish consistency is the hobgoblin of little minds,
adored by little statesmen andphilosophers and divines.
If a man does not keep pace withhis companions, perhaps it is
because he hears a differentdrummer, a different drummer.
Mostly Mary (00:19):
And now, coming to you from dead center on your
dial, welcome to Risk ParityRadio, where we explore
alternatives and assetallocations for the
do-it-yourself investorBroadcasting to you now from the
comfort of his easy chair.
Here is your host, frankVasquez.
Mostly Uncle Frank (00:37):
Thank you, Mary, and welcome to Risk Parity
Radio.
If you are new here and wonderwhat we are talking about, you
may wish to go back and listento some of the foundational
episodes for this program.
Voices (00:50):
Yeah, baby, yeah.
Mostly Uncle Frank (00:52):
And the basic foundational episodes are
episodes 1, 3, 5, 7, and 9.
Some of our listeners,including Karen and Chris, have
identified additional episodesthat you may consider
foundational, and those areepisodes 12, 14, 16, 19, 21, 56,
(01:13):
82, and 184.
Whoa, and you probably shouldcheck those out too, because we
have the finest podcast audienceavailable.
Mostly Mary (01:26):
Top drawer, really top drawer.
Mostly Uncle Frank (01:31):
Along with a host named after a hot dog.
Voices (01:34):
Lighten up Francis.
Mostly Uncle Frank (01:37):
But now onward, episode 428.
Today on Risk Party Radio.
Voices (01:42):
It's time for the grand unveiling of money.
Mostly Uncle Frank (01:46):
Which means it's time for our weekly
portfolio reviews.
Of the eight sample portfoliosyou can find at
wwwriskpartyradiocom On theportfolios page, we also have
some monthly distributions totalk about.
Voices (01:59):
I'm putting you to sleep .
Mostly Uncle Frank (02:01):
And some emails.
But before we get to that,First I want to thank everyone
who's already participated inour charitable matching campaign
, which we rolled out a coupleof episodes ago.
As you know, we do not have anysponsors on this podcast, but
we do have a charity we support.
It's called the Father McKennaCenter.
It supports hungry and homelesspeople in Washington DC, and
(02:23):
homeless people in Washington DCand I have a listener who we
are calling Matthew63 put up$15,000 in a matching campaign.
Voices (02:30):
The best, jerry the best .
Mostly Uncle Frank (02:32):
Which we launched last week.
I described this more inepisode 426.
We're calling it the Top of theT-Shirt Campaign.
Voices (02:41):
Yeah, baby, yeah.
Mostly Uncle Frank (02:44):
Because this money will be donated in
connection with our Walk forMcKenna that we hold in
September every year, and we'retrying to get the Risk Parity
logo to the top of the t-shirtas one of the biggest donors for
that campaign.
Voices (02:56):
Show me the money, jerry , you better yell, show me the
money.
Mostly Uncle Frank (03:01):
And I have to tell you I've been
overwhelmed by the support we'vereceived even in this first
week.
You'll see from the emails thatI read today that all of the
emails today are from donors,and since donating to the Father
McKenna Center gets you to thefront of the email line, I would
think that if you are not adonor to the Father McKenna
Center in the near future, youprobably won't hear your email
(03:23):
read for a good couple of monthsat least.
So to donate to the Top of theT-Shirt campaign, the best way
to do that is go to the donationpage for the Father McKenna
Center and I will put that inthe show notes again and you can
donate by check or by creditcard or several other ways.
But when you fill out yourlittle donation form online
there, just put in Risk ParityRadio Match or something like
(03:45):
that, so they can flag it forcounting it for the matching
purposes.
Think of it as Red Hot ChiliPepper Fi, where Fi stands for
financial independence.
So I hope you will participate.
But now it's time to get tothose emails and so, without
(04:08):
further ado, here I go onceagain with the email.
And First off.
First off, we have an emailfrom Anonymous.
Voices (04:20):
I have no name.
Mostly Uncle Frank (04:24):
And Anonymous writes.
Mostly Mary (04:26):
Hey, frank and Mary .
I just made a four-figuredonation motivated by the
current matching challenge.
While I wish to stay anonymous,I wanted to reach out to thank
both of you for what you do forus DIY investors and for the
homeless, and I also wanted tothank Anonymous, donor number
one, for their great idea andgenerosity.
It makes me immensely happy tobe able to contribute something
(04:47):
to your efforts.
Voices (04:50):
So shines a good deed in a weary world.
Mostly Uncle Frank (04:57):
Well, that's what I'm talking about.
Voices (04:59):
That's what I'm talking about.
Mostly Uncle Frank (05:01):
When I say we have the finest podcast
audience available, it is notjust a tagline.
You guys are great.
Voices (05:08):
That's gold, jerry gold.
Mostly Uncle Frank (05:11):
You ask great questions, you're very
thoughtful and you're verygenerous.
Mostly Mary (05:15):
Top drawer, really top drawer.
Mostly Uncle Frank (05:19):
Sister Francine would be proud.
Voices (05:22):
You can't lie to a nun.
We've got to go in and visitthe penguin.
Mostly Uncle Frank (05:27):
So I know you didn't have a question this
time, but the next time you domake sure you remind me in your
email of your donation so I canmove you to the front of the
line several times over.
Yes, thank you for your supportand thank you for your email.
Voices (05:45):
Five grand, no problem.
We'll have it for you for yoursupport and thank you for your
email.
Five grand, no problem.
We'll have it for you in themorning.
Let's go, elwin, we're on amission from God.
Mostly Uncle Frank (05:53):
Second off.
Mostly Mary (05:55):
Second off we have an email from Tim Timber, and
Tim writes Frank and Mary, youbriefly mentioned a few months
ago your son's use of a riskparity portfolio for
intermediate term savings.
Voices (06:09):
Young America.
Yes, sir.
Mostly Mary (06:11):
Can you expand a bit on the use cases for this
and when it may be a good or badidea?
My use case is for building mytaxable investments now that we
have a sufficient emergency fundin our high yield savings
account.
My uses for this money will befor a potential car in a three
to six year time frame andeventually for seed money to
start an early retirement Rothconversion ladder approximately
(06:35):
five years of expenses in about10 years.
Are these different enough thatI need two strategies?
Second question stack them upor save one for later?
Mary's choice.
How should I think about taximplications of strategies for
(06:57):
rebalancing a more complexportfolio while we are in our
peak earning years?
I assume you sit on it for ayear to get everything in
long-term capital gains beforeyou touch anything.
I am always hesitant to touchanything outside my
tax-advantaged accounts, which Ialso don't honestly touch
either.
I feel like I'd like to get toknow Shannon's demon.
(07:17):
Maybe some heavy metalrecommendations, just looking
for confidence-building guidance.
Thanks, tim, and Gwen's heretoo saying hi, frank Timmer.
Mostly Uncle Frank (07:27):
Yes, of course, what I think?
Maybe Timmy is suffering fromsomething called Attention
Deficit Disorder or ADD.
It's very common in kids hisage.
Mostly Mary (07:37):
Oh Timmer.
Well, that certainly wouldexplain it.
Mostly Uncle Frank (07:41):
All right, it's good to hear from you, Tim
and Gwen.
Just to clue everybody in, Timand Gwen are friends of ours.
Gwen is also known as the FieryMillennial.
Voices (07:51):
Fire, fire, fire fire.
Mostly Uncle Frank (07:54):
And she was a stray millennial that I
brought home one day, as SisterFrancine would have done.
And there's a story there, butwe won't be telling it right now
Wouldn't be prudent at thisjuncture.
We won't be telling it rightnow Wouldn't be prudent at this
(08:15):
juncture.
Gwen and Tim have a relativelynew podcast called Fire Takes.
I'll read you the descriptionhere.
Gwen and her husband, tim, givetheir hot fire-coded takes on
interesting Reddit and Internetstories.
Tim and Gwen blend humor,personal anecdotes and practical
advice, making complexfinancial topics accessible and
engaging.
Find more at wwwfiretakespodcom.
Voices (08:39):
That is the straight stuff, oh funk master.
Mostly Uncle Frank (08:42):
And I have listened to it and it is quite
entertaining.
What do you mean?
Funny?
Funny how.
It's relatively new, but ifyou're familiar with Ramit
Sethi's Couples FinancialProblems podcast, this one is
also in that vein and talksabout relationship problems in
the context of financialindependence and related topics.
Voices (09:01):
The beatings will continue until morale improves.
Daddy is home.
Mostly Uncle Frank (09:07):
But now that I'm done shilling for your
podcast, let's get to yourquestions.
But now that I'm done shillingfor your podcast, let's get to
your questions.
All right, your first questionis about the use of risk parity
portfolios for intermediate termsavings, and let me explain to
the rest of the audience whatwe're talking about here.
And this is what our eldest sondoes, and we recommend it to
all of our children.
Voices (09:28):
Why?
What have children?
Mostly Uncle Frank (09:29):
ever done for me.
So when you're accumulatingmoney as you're beginning your
working life, you're going tohave your long-term accumulation
accounts.
Those are usually your 401ksand things, and we recommend
that's 100% equities because youwant it to grow in the long
term.
Then it's common also to have acertain amount of cash, whether
you call that an emergency fundor whatever you want to call it
.
But then we get to the questionof what do we do about what's
(09:51):
in between that you're savingfor something, but it's years
away.
You're not even sure whenyou're going to buy it.
It could be a down payment on ahouse, it could be a new car.
Later it could be anything.
Last thing our eldest sonbought was solar panels with
this mechanism.
So that is your intermediateterm savings, and the solutions
for that typically are not beenthat great.
(10:12):
Most people say, well, justsave more cash in a different
place for that.
Okay, you can do that, it'llwork.
But what you can also do is usea risk parity style portfolio
for that intermediate termsavings bucket, and the reason
this works for this purpose isbecause of these characteristics
of a portfolio like the goldenbutterfly or golden ratio, that
(10:34):
these kind of portfolios haveshort drawdowns.
So the max drawdown for one ofthese kind of portfolios is
three or four years.
If you know that, then you canhave confidence that you're not
going to be in some 10-year holeas if you were in all stocks or
something like that, but you'regoing to get some growth out of
the thing.
And so our son uses a variationof the golden ratio portfolio
(10:58):
that's slightly more aggressivethan the sample one for this
purpose.
So your uses, or your expecteduses, are a potential car in a
three to six year time frame andseed money for early retirement
Roth conversion ladder, and Ithink both of those are ideal
examples of things that youcould use this kind of portfolio
for, because there is nospecific timeframe for them.
(11:22):
It's just something you want todo at some point in the future.
There's no hard deadline whereyou actually need to spend the
money.
You can figure that out later,but you don't want to be in a
position where you suffer a bigdrawdown that goes on for years
and years and years.
So this is a good example ofwhat you can use this kind of
risk parity portfolio forintermediate-term savings, and I
(11:43):
don't think you need differentstrategies for these.
You can just do this all in onebucket.
This is your intermediate-termsavings bucket and it can go for
the car, it can go for the Rothconversion ladder later and you
might have other uses for itMaybe some solar panels.
But then they switched from theSwingline to the Boston stapler.
But I kept my Swingline staplerbecause it didn't bind up as
(12:04):
much and I kept the staples forthe Swingline stapler.
And so no, they're notdifferent enough that you would
need two different strategies.
They're very similar in fact.
What's also nice about doingthis when you're young is you
get into kind of practice ofwhat it's going to be like when
you actually manage yourretirement portfolio.
But you're doing it on asmaller scale.
So, as I mentioned, I would lookat something like the golden
(12:27):
butterfly or golden ratioportfolios.
The kind of variation that oureldest son uses is taking the
golden ratio portfolio kind ofoff the shelf.
As to the stock portion at thetop the 42%, the treasury bond
portion, the 26% and the 16% ingold Although I think he might
have some gold miners stuffed inthere as well With the 10%
(12:48):
allocation and the 6% allocation.
He's more aggressive with that.
I think he's got someindividual REITs in there as
well With the 10% allocation andthe 6% allocation.
He's more aggressive with that.
I think he's got some individualREITs in there for that and has
spread out maybe that 6% justamongst all the other assets,
because you really don't need anextra cash allocation when
you're using this portfolio forthis purpose, because you
already have cash somewhere else.
So cash doesn't serve reallyany purpose in your intermediate
(13:11):
accumulation portfolio.
But if you want to come up withan idea and just send it back
in as a question, I'm sure a lotof our listeners would be
interested in this, either forthemselves or their kids, and we
can talk about what you've comeup with and I can tell you what
I think of it.
And it would be a nice littleexercise for our program Kimmer,
because that's how we roll here.
Voices (13:33):
One, two, three, four Timber.
Mostly Uncle Frank (13:40):
Timber.
Now getting to your secondquestion.
First, the most important partof your question is certainly
heavy metal recommendations.
The most important part of yourquestion is certainly heavy
(14:01):
metal recommendations.
Since we've been talking aboutour eldest son, I will give you
his favorite thing to listen towhen he was about 12.
It is the classic Iron Maiden.
Put them in the Iron Maiden,iron Maiden, excellent Execute
(14:26):
them, bodious, and his Uncle,mike, I believe, gave him this
album Fear of the Dark.
Mostly Mary (14:47):
And of course, the lead singer for Iron Maiden is
none other than Bruce Dickinson.
Voices (14:52):
Yes, the Bruce Dickinson , other than Bruce Dickinson.
Yes, the Bruce Dickinson, and Igotta tell you, fellas, you
have got what appears to be adynamite sound coming from you,
bruce.
That means a lot.
Mostly Uncle Frank (15:01):
Yeah, I mean , you're Bruce Dickinson if you
take what I believe is the firsttrack in that album, be quick
or be dead.
That is a classicallyconstructed heavy metal song for
you, but make sure you get thewhole album.
(15:23):
I guess you don't call it analbum anymore and play it over
and over again in the car whenyou and Gwen are driving around,
because that's how our son usedto like to listen to it.
But now getting to the rest ofyour question about the tax
(15:51):
implications and strategies forrebalancing a more complex
portfolio while you're in yourpeak earning years and we'll go
back to that intermediate termrisk parity style portfolio,
because we're talking aboutsomething that's in a taxable
account.
Obviously, I don't have anyproblems rebalancing anything
that's not in a taxable account,but what you want to do in a
taxable account, especially ifyou're adding money to it, is
(16:13):
don't rebalance it at all.
You can avoid it but insteadjust use your new contributions
to buy whatever is low.
So it's the exact opposite ofthe way we take money out.
When we take money out of theseportfolios, we sell from the
best performer, the most recentbest performer.
When you're putting more moneyinto it, you buy more of the
thing that's doing the worst andyou also reinvest any dividends
(16:36):
that way, because the fewertransactions you have with
respect to that on the salesside in particular, the less
taxes you're going to be paying.
It's actually not that bad,though, if it's capital gains
taxes, because you're going tobe in the zero or 15% tax
bracket for that anyway.
One thing about having one ofthese kind of portfolios, though
as an intermediate termaccumulation portfolio, is that
(16:58):
you actually have more taxopportunities in it because you
may be able to do some tax lossharvesting.
Chances are you're going tohave something in the portfolio
that's performing badly at aparticular time and has
accumulated some losses.
You can sell that, buysomething similar to it to get
the loss out of it.
Either just take the loss ifit's small enough or use that to
(17:18):
offset a capital gain insomething else.
So this is way more taxefficient than holding something
like a savings account.
That's something that I don'tthink people really appreciate
that if you have lots and lotsof money in a high-yield savings
account or something similar tothat, that is a terrible tax
thing in a taxable account,because it's just shooting out
(17:39):
ordinary income and all of thegains from it are taxed
immediately at the highest rateyou're going to be paying.
That's why people with a lot ofthat kind of income are better
off using something like thatbox ETF we talked about in the
last episode, and so there iskind of a little paradox there
that having a more complicatedportfolio with a few more things
(17:59):
in it is often better for youon the tax side than holding one
thing, particularly if that onething is paying ordinary income
.
Now, as for Shannon's demon,well, we'll have to talk about
that another time.
Voices (18:11):
You can't handle the dogs and cats living together.
Mostly Uncle Frank (18:15):
It was very nice of you to write in.
It was even nicer of you todonate to the Father McKenna
Center.
Voices (18:21):
Yeah, baby, yeah.
Mostly Uncle Frank (18:23):
I wish you and Gwen well and thank you for
your email, dude it's Timmy.
Voices (18:28):
No way they're ridiculing that singer.
Come on, let's get out of here.
And the lords of the underworldDarkness fills my heart with
(18:48):
pain.
That was awesome.
Yeah, Timmy rules.
Dude, this is a no-brainer.
Mostly Uncle Frank (18:58):
This year's Battle of the Bands winner and
the band that gets to open forPhil Collins is Timmy.
Voices (19:06):
We did it dude.
Listen to that.
Mostly Uncle Frank (19:08):
Next off, we have an email from Mark.
Voices (19:19):
Next off an email from Mark.
Mostly Uncle Frank (19:21):
And Mark writes.
Mostly Mary (19:22):
Hi Frank and Mary.
I absolutely love the work thatyou guys are doing.
Your podcast and the RationalReminder podcast are the only
two podcasts I try to listen tothe same day.
They come out Sweet, unless.
Rational Reminder is havinganother episode with Scott
Cederberg.
Am I right?
Or am I right?
Or am I right?
Right, right, right.
Voices (19:42):
Right, right right.
Mostly Mary (19:45):
I've been meaning to donate to the Father McKenna
Center for the past few months,but I just haven't gotten around
to it.
Cue the.
It's not that I'm lazy, it'sjust that I don't care.
Voices (19:54):
Soundbite it's not that I'm lazy it's that I just don't
care.
Mostly Mary (19:59):
Fortunately, your constant yammering about the top
of the t-shirt contest in thelast two episodes finally
motivated me to send in a $50donation today.
Voices (20:08):
Groovy baby.
Mostly Mary (20:10):
I know that it's for a good cause and that the
donation will be put to good use, with you guys involved.
And who doesn't love a matchingcampaign?
Mostly Uncle Frank (20:18):
It's all one big crapshoot, anywho.
Mostly Mary (20:20):
Anywho, my wife and I are quickly approaching
retirement and for the past fewmonths, I've taken a deep dive
into learning all I can aboutmanaging our finances during
retirement.
That's what led me to yourpodcast, as well as the Rational
Reminder podcast, Tyler'sawesome portfolio charts website
and several other great sourceslike testfoliocom.
(20:41):
Unfortunately, there isseemingly much more information
available about the accumulationphase of investing for
retirement than there is aboutthe decumulation phase, despite
the fact that the decumulationis so much more complex.
That leads me to my questionwhat other resources would you
recommend to me and your otherlisteners to help us increase
(21:01):
our knowledge and understandingabout managing our finances
during retirement?
It can be other podcasts, books, websites or any other useful
resource that you have foundover the years.
Once you have compiled thislist, maybe you can have your
crack team of top men, add anadditional resources page to the
website and include a list ofthose resources.
Voices (21:21):
Forget about it.
Mostly Mary (21:23):
Cue the.
I don't think I'd like anotherjob.
Soundbite.
Mostly Uncle Frank (21:26):
You think anybody wants a roundhouse kick
to the face while I'm wearingthese bad boys?
Mostly Mary (21:30):
Thanks again for all that you do.
Guys, keep up the fantasticwork.
Regards Mark.
Voices (21:35):
We have top men working on it right now.
Who Top men?
Mostly Uncle Frank (21:46):
Well, I feel like I should have a matching
campaign more often then.
This has really resulted in alot of great emails this week.
But getting to your question,yeah, this sounds like an easy
thing to do, but it's actuallyvery difficult to do and very
time-consuming, because ifyou're going to construct a list
(22:08):
of resources, it needs to bekept up to date, because a lot
of things keep changing withrespect to retirement, mostly
with respect to legalconsiderations and tax
considerations in particular,and the vast quantity of
material goes to things likethat.
It's also the case that most ofwhat is in retirement planning
(22:29):
does not apply to you, that aperson running a financial
advice practice has to know orbe able to look up a whole bunch
of different things.
That don't apply to most peopleand they only apply to one
segment of clients.
This is often why people inadvisory practices, whether
they're financial advice or taxadvice or something else, will
(22:49):
focus on one particular kind ofclient, and actually that's
probably, in most cases, thebest kind of advisor to go to.
You want to know that theyserve a whole lot of people who
are in your same circumstances,because they are more likely to
know all the ins and outs ofthat, even if they don't know
something.
That's more esoteric anddoesn't come up that often.
(23:11):
So the kinds of places I wouldordinarily look for sort of
basic financial advicepertaining to retirees would be
the websites of fee-onlyfinancial advisors.
One of them that's good is AndyPankow's website.
He's got a lot of freeresources there.
I'll link to that in the shownotes.
Cody Garrett also has a goodwebsite.
(23:33):
I think he's got a littlecourse you can take if you want
to build out a plan for yourselffor a couple hundred bucks.
Sean Mullaney is the FI tax guywho's kind of an expert in 401ks
and SEP IRAs and things likethat of an expert in 401ks and
SEP IRAs and things like that.
Cody and Sean are actuallywriting a book together on tax
strategies for early retirees inparticular, but I think it's
(23:54):
going to apply to later retireestoo.
I believe that book is comingout in August.
It might be something you wantto check out.
And then, if you're looking forsomething more of like a
reference book, wade Pfau's book, which I can link to in the
show notes, is kind of atextbook manual for financial
advisors.
That covers all kinds of topics.
It's not something you wouldsit down and read, but something
(24:15):
you would use to look things upin these days because we have
things like ChatGPT.
You can have a lot ofconversations about it there,
but you need to be carefulbecause a lot of the information
on there is inaccurate orobsolete.
Voices (24:39):
Okay, turn it on.
It's a piece of crap.
It doesn't work.
I could have told you that.
Mostly Uncle Frank (24:50):
But those are the kinds of places I would
look.
I would definitely be lookingat people who are in the
financial advisory business orrelated businesses, because they
have a lot of incentives tokeep their information up to
date and to make sure there'snothing inaccurate about it,
whereas somebody like me orother do-it-yourselfer does not
have that kind of incentive andfrom what I've seen of people
(25:12):
like myself who try to puttogether such lists, it's too
much work to keep them updated,forget about it, and so they
become obsolete after a time.
I must be feeling charitabletoday with all this giving going
on, since I'm saying nicethings about financial advisors.
Voices (25:28):
Surely you can't be serious.
Mostly Uncle Frank (25:29):
I am serious and don't call me Shirley Bet.
You thought you'd never hearsomething like that from me, but
there actually are a lot ofgood people out there in the
world.
Voices (25:38):
A lot of them just have bad incentives as we're adding a
little something to thismonth's sales contest.
As you all know, first prize isa Cadillac Eldorado.
Anybody want this month's salescontest?
As you all know, first prize isa cadillac eldorado.
Anybody want to see second?
prize.
Second prize a set of steakknives.
Mostly Uncle Frank (25:56):
Third prize is you're fired now if you're
looking for material more aboutportfolio construction, then I
would not look to thosefinancial advisor type sites.
That's better on the planningside.
If you want something that's atthe level of this podcast or
higher, you really need to lookat books that are written by
(26:17):
professionals in the businessand are not directed at popular
personal finance audiences.
So you'd look at books andwhite papers by people like
Antti Ilmanen and they're calledthings like Expected Returns
and he's at AQR with CliffAsness.
They also write a lot of whitepapers there.
So if you're looking for alibrary of stuff, you would go
there and do some research.
(26:38):
I'm also remiss in failing tomention Michael Kitsis, which I
should have mentioned in thefirst place, because he covers
both of these things.
He's one of the few peoplethat's in financial advice that
I would actually trust to givehigher level academic kind of
work, and if you go to his site,he's been writing articles for
almost a couple of decades now,and so there's a whole lot of
(27:00):
information there, and when youguys send me a question, I will
frequently go there and see whathe's written, because that is
an extremely high signal tonoise ratio.
There's a book.
It's about 10 years old nowit's called the Aspirational
Investor.
That I would also look at.
I really thought it was spot onwhen I was developing our own
(27:20):
strategies.
That one is written by AshfinChhabra, who was a former chief
investment officer at MerrillLynch Wealth Management.
That was one of the books thatconvinced me that I was on the
right track with respect to thisportfolio construction stuff
when I read it about 10 yearsago.
Now, someone who also alreadyhas some great resources is
(27:41):
Tyler at Portfolio Charts, andif you go over and even just
read through the sampleportfolios, there's all kinds of
information embedded in therewith all kinds of links to
articles and other things.
And if you just read throughall of the portfolios in there,
you would have a betterunderstanding than most
financial advisors of what thesethings are, how they work and
(28:03):
what the history of them hasbeen.
And then, finally, I'd beremiss of not mentioning that if
you just go to the RSS feedpage for this podcast, I tried
to put links to all of theresources in the show notes, so
you'll find all 428 episodes onone page with all the show notes
and you can word search thatfor any topic.
(28:24):
I can't guarantee that all thelinks still work, but the
material is there and usuallythat podcast will say something
about whatever that material was.
That is the closest thing Ihave to an additional resources
page and that's all you're goingto get out of me for that.
Voices (28:40):
That and a nickel.
Get your hot cup a jack squat.
Mostly Uncle Frank (28:46):
Hopefully all that that helps and thank
you for your email last off lastoff, I have an email from luke
excellent, everything is goingas planned and luke writes hi
frank and the newly crownedqueen mary.
Mostly Mary (29:24):
I just want to say thank you for answering my
questions during episode 421.
As usual, you didn't disappoint.
I also found the Cabocloissoundbites very amusing, even
though I'm probably the onlylistener who understood any of
it.
Voices (29:38):
Parce que vive le Québec .
Puis je me souviens.
Mostly Mary (29:41):
As a token of appreciation and to further
support a good cause, I havedoubled my contribution to the
Father McKenna Center.
Voices (29:48):
Double your pleasure double your fun.
Mostly Mary (29:52):
I added a note, so it counts toward the
contribution match campaign yourecently launched.
On a somewhat related note, Iwanted to say that your story
about Sister Francine was veryinspiring.
I know your podcast is meant tobe about personal finance, but
I'd be grateful for more of thattype of content.
Maybe you should write yourmemoirs, but I know you're not
looking for another job.
Mostly Uncle Frank (30:12):
Looks like you've been missing a lot of
work lately.
I wouldn't say I've beenmissing it, Bob.
Mostly Mary (30:17):
No questions today, but I do have one more offer to
express my gratitude.
You mentioned in a recentepisode that the person who
offered to help you with yourwebsite got busy and couldn't
help.
I'm not a professional webdeveloper but, as mentioned
previously, I'm in softwareengineering and I think I know
enough to improve on yourmethods.
Oh sure, I think I've improvedon your methods a bit too.
(30:39):
I employed some Chiara Scuroshading.
Would you be interested in mehelping out?
No pressure, of course.
It's your podcast and yourwebsite.
Keep up the good work.
I'll be listening.
All the best, Luke.
Voices (30:54):
Use the force, Luke, Let go Luke.
Mostly Uncle Frank (31:02):
Nice emails today.
Huh yeah, the best, mary, thebest.
Well, thank you so much foryour wonderful email, luke, and
thank you for your offer.
You are correct that I do wantto keep this podcast focused on
personal finance and portfolioconstruction in particular, but
I don't mind talking about thewhys of things every once in a
(31:26):
while, about life, the universeand everything.
Voices (31:30):
Now, when men get to fighting, it happens here and it
finishes here Two men enter,one man leaves.
Two men enter, one man leaves.
Mostly Uncle Frank (32:05):
But I'd rather that just come out in the
due course of whatever elsewe're talking about here.
I don't want to end up soundinglike Stuart Smalley.
Voices (32:14):
Stuart Smalley is a caring nurturer, a member of
several 12-step programs, butnot a licensed therapist.
I'm going to do a terrific showtoday and I'm going to help
people because I'm good enough,I'm smart enough and doggone it.
People like me.
Mostly Uncle Frank (32:37):
Or maybe Jack Handy.
Voices (32:39):
And now, Deep Thoughts by Jack Handy.
Sometimes, when I feel likekilling someone, I do a little
trick to calm myself down.
I'll go over to the person'shouse and ring the doorbell.
When the person comes to thedoor, I'm gone.
But you know what I've left onthe porch?
(33:00):
A jack-o'-lantern with a knifestuck in the side of its head
with a note that says you.
Mostly Uncle Frank (33:07):
And I would be interested in having you help
me out or at least take a lookat it.
So I will send you an email andmaybe we can do a Zoom and chat
about that, Because one of theother purposes of this podcast
that has evolved over time, atleast for me is to simply make
new acquaintances and make newfriends, and in my experience
that is actually the best waythat friendships are formed as
(33:30):
adults.
When two people are in the sameenvironment, one of them sees
another one who struggles withsomething as I struggle with
websites and things like thatand simply says, hey, I know
something about that, Maybe Icould help.
That old saying is quite true Afriend in need is a friend in
deed, and I will happily put upwith your Canadian-ness.
Voices (33:52):
Oh, good day.
Oh, good day.
Good day, good day,coo-loo-coo-coo-coo-coo-coo,
coo-loo-coo-coo-coo-coo-coo-coo,good day, how's it going?
I'm Bob McKenzie.
This is my brother, doug.
How's it going, eh?
Mostly Uncle Frank (34:04):
And your Frenchness Now go away, or I
shall taunt you a second time.
So thank you again for yourcontributions.
Voices (34:19):
And thank you for your email.
Mostly Uncle Frank (34:21):
And now for something completely different.
And the something completelydifferent is our weekly
portfolio reviews of the eightsample portfolios you can find
at wwwriskprioritycom on theportfolios page Boring.
We also have our monthlydistributions to go through.
But just looking at the markets, the S&P 500, represented by
the fund VOO, is up 0.9% for theyear now.
(34:45):
The NASDAQ 100, represented byQQQ, is up 1.69% for the year
now.
Small cap value continues tolag.
Representative fund VIOV isdown 11.5% for the year now.
But gold continues to shine.
Voices (35:01):
I love gold.
Mostly Uncle Fra (35:05):
Representative fund GLDM is up 25.49% for the
year.
Long-term treasury bonds,represented by the fund VGLT,
are up 0.73% for the year.
Reits, represented by the fundREET, are up 4.21% for the year.
Commodities, represented by thefund PDBC, are now down for the
year.
They're down 3.46% for the year, probably due to lower oil
(35:29):
prices, I would suspect.
Preferred shares, representedby the fund PFFV, are down 0.05%
for the year and managedfutures are still managing to
drag along.
Representative fund DBMF isdown 2.92% for the year.
Moving to these portfolios,first one is our reference
portfolio, the all seasons.
(35:50):
It's only 30% in stocks and itswhole stock market fund, 55% in
intermediate and long-termtreasury bonds and the remaining
15% in gold and commodities.
It is up 0.66% for the month ofMay.
It's up 2.78% year to date andup 11.5% since inception, july
2020.
(36:10):
We are distributing out of itat a 4% annualized rate.
So for the month of Junethat'll be $31.
We'll take it out of the goldfund, gldm, which has been the
best performer recently.
That'll be $187 year to dateand $1,877 since inception in
July 2020.
And all these portfolios didstart with about $10,000 in them
(36:33):
for reference.
Moving to these kind of breadand butter portfolios, first
one's Golden Butterfly.
It's 40% in stocks divided intoa total stock market fund and a
small cap value fund, 40% intreasury bonds divided into long
and short and the remaining 20%in gold.
It's up 1.57% for the month ofMay.
It's up 3.85% Year-to-date.
(36:53):
It's up 39.09% since inception,july 2020.
We are distributing out of thisat a 5% annualized rate.
That will be $45 for the monthof June and it will come out of
gold as well.
Gldm that'll be $272distributed year-to-date and
$2,573 since inception in July2020.
(37:16):
Next one's golden ratio it is42% in stocks divided into a
large-cap growth fund and asmall-cap value fund, 26% in
long-term treasury bonds, 16% ingold, 10% in managed futures
and 6% in cash in a money market.
It's up 2.21% month to date.
It's up 2.33% year to date andup 32.98% since inception in
(37:39):
July 2020.
Now this one we alwaysdistribute from the cash portion
of it and just refill that uponce a year.
So it'll be $43 for the monthof June.
It'll come from the cash.
That'll be $259 year-to-dateand $2,521 since inception in
July 2020.
Next, one's the risk parityultimate.
(38:00):
I'm not going to go through all14 of these funds in this
portfolio, but it is up 1.78%for the month of May, up 1.92%
year-to-date and up 21.85% sinceinception in July 2020.
We are distributing out of thisone at a 5% annualized rate
currently, which will involvedistributing $39 for the month
(38:20):
of June, and that will come outof the Bitcoin.
This portfolio has a 1%allocation to Bitcoin, although
it looks more like 2% at themoment.
That will be $236 year-to-dateand $2,686 since inception in
July 2020.
Now moving to theseexperimental portfolios that all
involve leveraged funds.
(38:42):
Do not try this at home.
Voices (38:45):
You have a gambling problem.
Mostly Uncle Frank (38:47):
First one's the accelerated permanent
portfolio.
This one's 27.5% in a leveredbond fund TMF, 25% in a levered
stock fund UPRO, 25% in PFFV, apreferred shares fund, and 22.5%
in gold GLDM.
Well, it looks more like 27% ingold right now.
It is up 0.3% for the month ofMay.
(39:09):
It's up 1.93% year-to-date andup 2.98% since inception in July
2020.
We're distributing $37 out ofit from cash that has
accumulated.
We're doing that at a 6%annualized rate for this
portfolio.
It'll be $230 year-to-date and$2,860 since inception in July
2020.
(39:30):
Next one's the aggressive 50-50.
This is the most levered andleast diversified of these
portfolios and also the worstperformer.
If you wonder why we keep itaround, it is as a good learning
experience to see what happenswhen you have a lot of leverage
and not that muchdiversification.
Voices (39:48):
I'm gonna end up eating a steady diet of government
cheese and living in a van downby the river.
Mostly Uncle Frank (39:57):
So this one is one-third in a leveraged
stock fund, upro, one-third in aleveraged bond fund, tmf, the
remaining third in preferredshares and an intermediate
treasury bond fund.
It's up 1.1% for the month ofMay.
It's down 4.87% year-to-dateand down 16.21% since inception
in July 2020.
We are distributing out of thisone at a 6% annualized rate.
(40:20):
That'll be $30.
It's going to come out of theIntermediate Treasury Bond Fund,
vgit.
So it'll be $192 year-to-dateand $2,861 since inception in
July 2020.
Moving to our next experimentalportfolio, the levered golden
ratio.
This one is 35% in a compositelevered fund called NTSX, that
(40:41):
is, the S&P 500 and treasurybonds levered, up 1.5 to 1.
20% in gold, gldm, 15% in aninternational small cap value
fund, avdv.
10% in KMLM, which is a managedfutures fund, 10% in a levered
bond fund, tmf, and theremaining 10% divided into two
(41:03):
levered funds, udao and UTSL.
Let follow the DAO and autilities index respectively.
This one is our big winner forthe year so far, which is good
for it because it has struggledin the past.
It's up 2.57% month to date.
It's up 5.1% year to date andup 0.45% since inception in July
(41:23):
2021.
It's a good example of whathappens when you start at a
really bad time to startwithdrawing.
We will be distributing $34 outof it from GLDM that's the gold
fund.
That's at a 5% annualized rate.
It'll be $201 year-to-date and$1,757 since inception.
And moving to our lastportfolio, the Optra portfolio,
(41:46):
it's an example of areturn-stacked configuration and
it's less than a year old.
So this one is 16% in a leveredstock fund, upro, 24% in an
all-world value fund, avgv, 24%in a treasury strips fund, govz,
and the remaining 36% dividedinto gold and managed futures.
(42:08):
It's up 3.04% month to date.
It's up 2.83% year-to-date andup 5.83% since inception in July
2024.
We'll be distributing $50 outof cash that is accumulated.
It's at a 6% annualized rate.
That's for the month of June.
That'll be $256 distributedyear-to-date and $562 since
(42:30):
inception in July 2024.
And that concludes our weeklyand monthly portfolio reviews.
But now I see our signal isbeginning to fade.
If you have comments orquestions for me, please send
them to frank atriskparityradarcom.
That email is frank atriskparityradarcom.
Or you can go to the website,wwwriskparityradarcom, put your
(42:51):
message into the contact formand I'll get it that way.
If you haven't had a chance todo it, please go to your
favorite podcast provider andlike, subscribe.
Give me some stars, a follow, areview.
That would be great, okay,thank you once again for tuning
in.
This is Frank Vasquez with RiskParity Radio signing off.
Voices (43:14):
You've got to watch them .
Big red coffee dead.
Snake eyes in heaven, thebeef's in your head.
You've got to watch them.
Big red coffee dead.
Snake eyes in heaven, thebeef's in your head.
Big red red beef dead.
(43:35):
Big red.
Mostly Mary (43:38):
The Risk Parody Radio Show is hosted by Frank
Vasquez.
The content provided is forentertainment and informational
purposes only and does notconstitute financial, investment
tax or legal advice.
Please consult with your ownadvisors before taking any
actions based on any informationyou have heard here, making
sure to take into account yourown personal circumstances.
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