Risk Parity Radio

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 CenterAfford Anything Podcast Episode:  #618: How to Retire at 50 While Supporting Aging Parents, with Frank Vasquez - Afford AnythingPaula Pant's Risk Parity Radio Blueprint:  Frank Vasquez Risk Parity Portfolio Giveaway.docxClaudia Moise Paper:  Flights to Safety, Volatility Risk, and Monetary Policy by Claudia E. Moise :: SSRNProfessor Aswath Damodaran on ESG Funds:  The Difficult Truth about ESG Investing with Aswath DamodaranFRDM Fund:  FRDM – Freedom 100 Emerging Markets ETF – ETF Stock Quote | MorningstarBreathless 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 recommendatSupport the show

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 CenterStacking Benjamins YouTube Live Stream Roundtable:  Decumulational Strategies: The Special Retirement Spend Down Strategy RoundtableListen Notes Link:  Risk Parity Radio (podcast) - Frank Vasquez | Listen NotesInterview of Bob Elliot on the Compound Podcast:  The Blue Chips of Junk | TCAF 175Morningstar AVUQ:  AVUQ – Avantis U.S. Quality ETF – ETF Stock Quote | MorningstarBreathless 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.Support the show

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 CenterFMC Instagram Page:  The Father McKenna Center (@thefathermckennacenter) • Instagram photos and videosFMC Facebook Page:  The Father McKenna Center | Washington D.C. DC | FacebookBreathless 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.Support the show

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 CenterStacking Benjamins YouTube Live Stream Roundtable:  Decumulational Strategies: The Special Retirement Spend Down Strategy RoundtableHendrik Bessembinder on Rational Reminder Podcast:  Episode 346 - Hendrik Bessembinder: Why It's So Hard to Beat the Market — Rational ReminderBreathless 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.Support the show

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 CenterFIRE Takes Podcast Page:  FIRE Takes PodcastMichael Kitces Page and Resources:  Kitces.com - Advancing Knowledge in Financial PlanningAndy Panko Resources:  FREE Retirement Planning EducationCody Garrett Page and Resources:  Meet Cody - Measure Twice FinancialSean Mullaney Page and Resources:  The FI Tax Guy – The Tax Efficient Path to Financial IndependenceWade Pfau Book:  Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success (The Retirement Researcher Guide Series): Pfau, Wade: 9781945640155: Amazon.com: BooksAshvin Chhabra Book:  Amazon.com: The Aspirational Investor: Taming the Markets to Achieve Your Life's Goals eBook : Chhabra, Ashvin B.: Kindle StoreAQR and Antti Ilmanen:  AQR Principal Antti Ilmanen Authors New Book on Investing in a Low-Return EnvironmentBreathless 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 anothSupport the show

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 CenterInterview 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 PodcastKBWP at Morningstar:  KBWP – Invesco KBW Property & Casualty Ins ETF – ETF Stock Quote | MorningstarRisk Parity Chronicles on YouTube:  Risk Parity Chronicles - YouTubeThe Life of Catherine McAuley:  Catherine McAuleyBreathless 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."Support the show

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 CenterPete's Test Portfolios Analysis:  https://testfol.io/?s=cTkuwqvwzMSShannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio ChartsMeb Faber Interview of Professor Ken French:  Famed Finance Expert Kenneth French Reveals: Most Dangerous Investor FallaciesBreathless 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.Support the show

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 CenterSCHD Analysis on Morningstar:  SCHD Stock - Schwab US Dividend Equity ETF | MorningstarBreathless 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.Support the show

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 CenterTyler On The Security Analysis Podcast:  Tyler (@PortfolioCharts): The Amazing Power of Uncorrelated AssetsAnalysis Of BTAL vs. SPY vs. TLT With Correlations:  testfol.io/analysis?s=jAQO2TjzAPaper Re Stock Market Volatility And Treasury Bonds (C. Moise):  Flights to Safety, Volatility Risk, and Monetary Policy by Claudia E. Moise :: SSRNBreathless 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.Support the show

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 CenterALLW Fund Main Page:   ALLW: SPDR® Bridgewater® All Weather® ETFOpen Social Security:  Open Social Security: Free, Open-Source Social Security CalculatorHartford Funds Dividend Fund Page:  The Power of Dividends: Past, Present, and FutureBen Felix Dividend Video:  The Irrelevance of DividendsBen Felix Dividend Video #2:  The Relevance of Dividend IrrelevanceBreathless Unedited AI-Bot summaryFinancial 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.Support the show

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 CenterBCI vs. PDBC vs. COM vs. DBMFX:  testfol.io/analysis?s=3NIFkA7mNB9Small Cap Value vs. S&P 500 In 21st Century:  testfol.io/analysis?s=gkqbgk7mzkaBreathless 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?Support the show

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 PodcastsRPR 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 BandsBreathless 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.Support the show

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.Support the show

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 FeedMerriman ETF Recommendations:  Best-in-Class ETF Recommendations | Merriman Financial Education FoundationjBreathless 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!Support the show

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=0SLNjC7As4bSam's Most Excellent Risk Parity Explication Blog Post:  15 Uncorrelated Assets | SSiSSam's Most Excellent Bill Of Rights Blog Post:  Boxed In | SSiSBreathless 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.Support the show

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 ChartsIDMO vs EFG (and other international growth funds) Analysis:  testfol.io/analysis?s=4PEQ1YvTbAMBreathless 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.Support the show

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 RetirementKitces/Pfau Paper re Rising Glidepaths:  Reducing Retirement Risk with a Rising Equity Glide-Path by Wade D. Pfau, Michael Kitces :: SSRNMeb 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.Support the show

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 | MorningstarBreathless 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!Support the show

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=LDhLHuhVF5zOKfTZckLT7Weird Portfolio:  Weird Portfolio – Portfolio ChartsTestfolio Portfolio Comparison (90/10 vs. 50/50):  https://testfol.io/?s=2TDnqWEw5FEBogle Interview (re Social Security):  Jack Bogle on Index Funds, Vanguard, and Investing AdviceKitces 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!Support the show

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 CenterMindset by Carol Dweck:  Mindset: The New Psychology of Success by Carol S. Dweck | GoodreadsBloomberg Presentation On Investments In Inflationary Environments:  MH201-SteveHou-Bloomberg.pdfShannon's Demon Article from Portfolio Charts:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio ChartsTestfolio Analysis of MGK and other funds:  testfol.io/analysis?s=lbssElueG9DAmusing 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.Support the show

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 CenterPortfolio Charts Retirement Spending:  Retirement Spending – Portfolio ChartsMonevator Quilt Chart:  Asset allocation quilt – the winners and losers of the last 10 years - Monevator Just ETF (UK) Page:  ETF portfolios made simpleShannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio ChartsAmusing 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.Support the show

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 CenterTestfolio Comparison between Total Market and Large Cap Growth:  testfol.io/analysis?s=0GbmPE8D9GKMerriman Best In Class ETFs:  Best-in-Class ETF Recommendations | Merriman Financial Education FoundationShannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio ChartsRational Reminder Podcast #350:  Episode 350 - Scott Cederburg: A Critical Assessment of Lifecycle Investment Advice — Rational ReminderAn Actually Useful Analysis of Global Portfolios:  What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio ChartsBrian's Golden Butterfly Monte Carlo:  Monte Carlo SimulationBrian's All Equity 50/50 Monte Carlo:  Monte Carlo SimulationBrian's All Equity 34/66 Monte Carlo:  Monte Carlo SimulationAmusing 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 youSupport the show

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=1lK9VB9xqaMRPR Main Feed Link (all the podcasts -- open in browser):  Risk Parity Radio RSS FeedAVGE Composition And Other Info:  AVGE – Portfolio – Avantis All Equity Markets ETF | MorningstarPortfolio Matrix:  Portfolio Matrix – Portfolio ChartsCAOS Fund:  CAOS – Alpha Architect Tail Risk ETF – ETF Stock Quote | MorningstarAmusing 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!Support the show

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 | MorningstarReturn Stacked Funds Page:  Home - Return Stacked® ETFsAmusing 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.Support the show

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 CenterGolden Ratio Portfolio at Portfolio Charts:  Golden Ratio Portfolio – Portfolio ChartsGolden Ratio Portfolio Write-Up:  Beautiful Constants and the Golden Ratio Portfolio – Portfolio ChartsKitces Article re Rebalancing:  Optimal Rebalancing – Time Horizons Vs Tolerance BandsDiscussion of Changes to Morningstar's Style Boxes:  Morningstar redefines growth/value style box criteria - Bogleheads.orgRisk Parity Radio All Episodes Feed Page:  Risk Parity Radio RSS FeedAmusing 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.Support the show

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.comOptimized Portfolios Site:  Optimized Portfolio - Investing and Personal FinanceRational Reminder Podcast Re Lifecycle Model:  Ben Mathew: The Lifecycle Model vs. Safe Withdrawal Rates (SWR) | Rational Reminder 340Debunking Economics:  Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned?: Keen, Steve: 8601406370678: Amazon.com: BooksAmusing 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.Support the show

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 CenterNAREIT -- Types of REITs:  Learn about Investing and Market REIT Sectors TodayWeird Portfolio:  Weird Portfolio – Portfolio ChartsKo's Michael Saylor Video:  Michael Saylor's Big Bitcoin Prediction | Relai Bitcoin Podcast #90Amusing 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.Support the show

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 CenterPortfolio 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.Support the show

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 SwapSean Mullaney On 72(t):  475 | How to Access Your Retirement Accounts Before 59.5 | Sean MullaneyMad Fientist on Accessing Retirement Funds Early:  How to Access Retirement Funds EarlyMerriman ETF Recommendations:  Best-in-Class ETF Recommendations | Merriman Financial Education FoundationJustETF website and Sample Small Cap Value Fund:  SPDR MSCI USA Small Cap Value Weighted UCITS ETF | A12HU5 | IE00BSPLC413Amusing 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!Support the show

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 CenterNew Catching Up to FI Podcast with Yours Truly:  “The Risk Parity Paradox” an Exercise in Simple Complexity? | Frank Vasquez | 124US vs International Stocks In Strong And Weak Dollar Markets (link from Episode 393:  us-dollar-strength-has-correlated-with-performance-03312023.pdfSpending Trajectories After Age 65 Research Paper and  Summary (link from Episode 336):  Spending Trajectories After Age 65: Variation by Initial Wealth | RANDAmusing 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.Support the show

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 CenterPortfolio Matrix Tool at Portfolio Charts:  Portfolio Matrix – Portfolio ChartsThe Weird Portfolio:  Weird Portfolio – Portfolio ChartsMorningstar Page for QREARX:  QREARX – TIAA Real Estate Account Fund Stock Price | MorningstarAmusing 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.Support the show

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 CenterERN Small Cap Value Article of 2 December 2024:  Small-Cap Value Stocks: Diversification or Di-WORSE-fication? - Early Retirement NowFirst Merriman Response to SCV Article:  The True Story About Small Cap ValueSupplemental 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=gkqbgk7mzkaShannon's Demon Article Re Math Of Diversification:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio ChartsERN Safe Withdrawal Rate Post of 15 April 2016:  Pros and cons of different withdrawal rate rules - Early Retirement NowMichael Batnick Article re Shifting In CAPE Ratio:  Stocks Are More Expensive Than They Used to BeRick Ferri Interview:  Show Us Your Portfolio: Rick Ferri | Why a Simple Approach Beats 90% of the ProsCore 4 Portfolios:  Process – Core-4Rob Berger Interview (with transcript):  Bogleheads on Investing with Rob Berger – Episode 48 - The John C. Bogle Center for Financial LiteracyInterview of Michael Kitces Re Problems With TIPS Ladders:  Michael Kitces: How Higher Yields Affect Asset Allocation and Retirement Planning | MorningstarSupport the show

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: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?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-2020Episode 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.pdfRisk 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=Nu4lHaSh7D4Episode 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-etfThe 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?Support the show

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 CenterDennis And The McKenna Center Team:  Our Team - Father McKenna CenterAndy Panko Interview of Eric Niergarth:  Retirement planner chat, with Eric Niergarth from Retirement Roadmap Financial PlanningPete's Fund and Correlation Analysis:  https://testfol.io/analysis?s=4Qh1xI3JKMlAmusing 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.Support the show

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 | VanguardAmusing 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.Support the show

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 + CitatorCAOS Main Page:  CAOS ETF - Alpha Architect ETFsCAOS Fact Sheet:  Factsheet_CAOS.pdfAmusing 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.Support the show

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 CenterMartijn's Link:  testfol.io/?s=aoTgPMqhGQAPortfolio Matrix (Start Date Sensitivity):  Portfolio Matrix – Portfolio ChartsThe Dude's First Link:  Asset CorrelationsThe Dude's Second Link:  testfol.io/?s=aKrdp1uCnEuThe Dude's Third Link:  testfol.io/?s=kUK5djVum0AAmusing 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.Support the show

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 ChartsAsset Correlations (VTI and VOO and large cap growth):  https://testfol.io/analysis?s=63nAL9efMMgGolden Butterfly With Total Market vs. Large Cap Growth:  https://testfol.io/?s=h0ZxYu0txcPAlpha Exchange Podcast on Leveraged Funds:  Michael Green, CFA, Portfolio Manager, Chief Strategist, Simplify Asset Management | Alpha ExchangeAmusing 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.Support the show

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 CenterPete's Correlation Analysis Link:  Asset CorrelationsIDMO Fund:  IDMO – Invesco S&P International Dev Momt ETF – ETF Stock Quote | MorningstarInternational Large Cap Growth Fund Comparison:  testfol.io/analysis?s=4PEQ1YvTbAMPortfolio Matrix Comparison Tool:  Portfolio Matrix – Portfolio ChartsThe Dude's Sixty-Sixty Portfolio And Comparisons:  testfol.io/?s=1bInsY2fEmIAmusing 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.Support the show

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 ChartsGlobal Withdrawal Rates Article:  Global Withdrawal Rates – Portfolio ChartsDILRX International Large Cap Growth Fund:  DILRX – DFA International Large Cap Growth Fund Stock Price | MorningstarUS vs International Stocks In Strong And Weak Dollar Markets:  us-dollar-strength-has-correlated-with-performance-03312023.pdfZPRX European Small Cap Value Fund:  ZPRX : SPDR® MSCI Europe Small Cap Value Weighted UCITS ETFAmusing 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.Support the show

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 CenterSteve's Modified Golden Butterfly:  testfol.io/?s=hJZl3QbaXsjKitces Article About Bucket Strategies:  Managing Sequence Risk: Bucket Strategies Vs Total ReturnAmusing 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.Support the show

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 ChartsTestfolio Backtesting and Analysis Site:  testfol.ioAmusing 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.Support the show

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 CenterShannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio ChartsPortfolio Charts Retirement Spending Calculator:  Retirement Spending – Portfolio Charts2024 Morningstar Report Analyzing Variable Withdrawal Strategies:  State_of_Retirement_Income_2024.pdfSwedroe Factor Investing Book:  Book Review: Your Complete Guide to Factor-Based Investing | CFA Institute Enterprising InvestorMerriman Best In Class ETFs:  Best-in-Class ETF Recommendations | Merriman Financial Education FoundationAmusing 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.Support the show

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 FundQSPNX Main Page:  AQR Style Premia Alternative Fund - QSPNXAmusing 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.Support the show

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.Link: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 :: SSRNAmusing 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!Support the show

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 CenterTest Folio Analysis of Large Cap Growth And Momentum Funds:  testfol.io/analysis?s=aBroPEsxfLpTest Folio Analysis of Small Cap Value With Momentum:  testfol.io/analysis?s=fjwv647o2PUAmusing 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.Support the show

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 282PensionCraft 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 ReturnsAmusing 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.Support the show

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 CenterChooseFI Podcast With Yours Truly:  194 | The Role of Bonds in a Portfolio | With FrankPortfolio Visualizer Monte Carlo Simulator:  Monte Carlo SimulationPortfolio Charts Portfolio Matrix Calculator:  Portfolio Matrix – Portfolio ChartsTestfolio Site:  testfol.ioAmusing 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.Support the show

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 CenterFather McKenna Center Donation Page:  Donate - Father McKenna CenterComparison of QQQ, VUG and IWY:  testfol.io/analysis?s=6uPSB8ZpIIREpisode 238:  Podcast | Risk Parity Radio Episode 238Pinwheel Portfolio:  Pinwheel Portfolio – Portfolio ChartsAmusing AI-Bot SummaryWhat 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.Support the show

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 CenterFather McKenna Center Donation Page:  Donate - Father McKenna CenterArticle About New TSP International Fund:  What to Know About the New TSP I Fund | MorningstarMerriman Best In Class ETFs:  Best-in-Class ETF Recommendations | Merriman Financial Education FoundationPinwheel Portfolio:  Pinwheel Portfolio – Portfolio ChartsPortfolio Matrix Tool:  Portfolio Matrix – Portfolio ChartsAmusing 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.Support the show

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 CenterNew Article About Managed Futures:  2024Q3_QuanticaQuarterlyInsights.pdfBloomberg Presentation On Investments In Inflationary Environments:  MH201-SteveHou-Bloomberg.pdfDBMF "Managed Futures 101" Microsite:  iMGP DBi Managed Futures Strategy ETF | iM Global PartnerThe Dude's VUG vs. QQQ Link #1:  Asset CorrelationsThe Dude's VUG vs. QQQ Link #2:  testfol.io/?s=kMopG7yQ6SOThe Dude's  VUG vs. QQQ Link #3:  testfol.io/?s=2dpHLA3ndmVThe Dude's  VUG vs. QQQ Link #4:  Factor Regression AnalysisAmusing 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.Support the show