In this episode we answer emails from Roman, Andrew and Iain.  We discuss the plusses and minuses of leverage, volatility drag, and how leverage interacts with diversification and withdrawals, general observation on tax optimization via account buckets, small cap value index funds and Avantis/DFA merits, and modelling annuities versus mandatory versus discretionary spending in retirement.

LInks:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Ben Felix Leverage Video:  Investing With Leverage (Borrowing to Invest, Leveraged ETFs)

Leveraged ETFs Paper:  Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs

Optimized Portfolios Article/Website:  How To Beat the Market Using Leverage and Index Investing

Jim Sandidge Chaos Theory Applied to Drawdowns:  RMJ081-ChaosAndRetirementSecurity.pdf

"Buffet's Alpha" Paper:  Full article: Buffett’s Alpha

New Tax Planning In Early Retirement Book:  Amazon.com: Tax Planning To and Through Early Retirement: 9798999841599: Garrett, Cody, Mullaney, Sean: Books

Merriman Best IN Class ETF Selections:  Best ETFs 2025 | Merriman Financial Education Foundation

Breathless Unedited AI-Bot Summary:

Ever wonder why leverage looks brilliant during bull markets but feels brutal the moment you start withdrawing cash? We break down the promise and pitfalls of adding leverage to diversified, risk parity-style portfolios, then show how the math of volatility drag and sequence risk can quietly erode safe withdrawal rates. It’s an honest tour of what works in accumulation, what breaks in retirement, and how to engineer a calmer path without surrendering all upside.

We start with the straight talk: leverage and concentration are the two proven routes to outperformance, but only one of them can be paired safely with broad diversification. From hedge fund history to the “Aggressive 50/50” experiment, you’ll hear why high-octane blends can top the charts and then stall after deep losses, especially when distributions force selling at the worst times. We contrast that with return stacking and measured leverage, which aim for equity-like returns with better risk control, and we share practical tools—rebalancing discipline, cash buffers, and dynamic spending bands—to keep a drawdown portfolio intact.

Taxes matter just as much as tickers. We walk through Roth vs traditional contributions, why present marginal rates and future flexibility drive the choice, and how to place bonds smartly across tax buckets. On the equity side, we revisit small cap value: why classic S&P 600 value exposure is solid, and how AVUV and DFA’s profitability filters can sharpen the factor without turning it into active guesswork. Then we turn to spending: build the plan around real expenses, not theoretical annuities. Set a durable floor for essentials, keep a flexible layer for the fun stuff, and consider partial annuitization later in life if longevity and peace of mind are worth the trade.

Support the show

In this episode we answer emails from Jess, Phil and Scott.  We discuss an experience of setting up a sample RPR portfolio for one's self, using asset swaps to manage cash, and fun with the low bar standards and other inadequacies of many financial advisors.

And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional Links:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

How To Do An Asset Swap Video from Risk Parity Chronicles:  How to Do an Asset Swap

Bigger Pockets Money Test Risk Parity Style Portfolio:  We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)

Excess Returns Podcast With Rick Ferri (forward to minute 49):  Most Never Escape Stage 3 | Rick Ferri on How You Can Beat the Complexity Trap

Breathless Unedited AI-Bot Summary:

Tired of being told that everything beyond a three-fund portfolio is “too hard”? We pull back the curtain on practical tools that make DIY investing simpler in practice, not smaller in ambition. Starting with a listener’s test portfolios, we show how hands-on experience beats theory, why diversification means loving today’s winners and tomorrow’s comebacks, and how to turn rebalancing into reliable cash flow.

We go deep on asset location and the overlooked power of asset swaps. By “selling here, buying there,” you can keep your overall mix unchanged while moving ordinary income into tax-deferred accounts and positioning equities in taxable for qualified dividends and capital gains. If you’ve been parking big cash balances in a HYSA and wondering why your tax bill keeps creeping up, this segment is your blueprint for tax efficiency without extra risk.

Then we tackle withdrawal rates with clear eyes. Many advisors still anchor to 3 percent for retirees in their 60s. We explain why diversified, risk parity style allocations can responsibly target closer to 5 percent over long horizons, especially when you harvest from strength. Case in point: trimming gold after a powerful run to fund November distributions across our sample portfolios. We share market snapshots, what’s leading and lagging, and how a rules-based process keeps emotion out of the driver’s seat.

If you want an investing plan that funds a life—relationships, experiences, generosity—rather than an accounting hobby, this conversation is your on-ramp. Subscribe, share with a friend who needs a nudge to start that test portfolio, and leave a review telling us your target withdrawal rate and why.

Support the show

In this episode we answer emails from Adam, Private Cowboy, and Jose.  We discuss managed futures (again with references!), Bill Bengen's latest book and how it integrates into our approach, and the pros and cons of a Vanguard Personal Advisor-created portfolio and the hypocritical quandaries it creates with the gods of Simplicity.

Links:

Demystifying Managed Futures:  Demystifying Managed Futures

Bloomberg Presentation On Investments In Inflationary Environments:  MH201-SteveHou-Bloomberg.pdf

Dunn Capital Analysis:  High-Vol-Trend-Following-Trend-Index-Edition-0825-DIGITAL.pdf

Kardinal Financial Video:  What is Alternative Investing?

Interview of Bill Bengen:  Episode 195: The 4% Rule and Beyond: Retirement Strategies with Bill Bengen

Weird Portfolio:  Weird Portfolio – Portfolio Charts

Afford Anything Episode:  #618: How to Retire at 50 While Supporting Aging Parents, with Frank Vasquez - Afford Anything

Corey Hoffstein Interview:  Show Us Your Portfolio: Corey Hoffstein

Breathless AI-Bot Summary:

The perfect asset allocation isn't a formula—it's a framework built on uncorrelated assets that dance to different drummers during market storms. This episode dives deep into managed futures, one of the most powerful yet misunderstood portfolio diversifiers available to individual investors.

Three listener questions explore how managed futures fit within retirement portfolios, particularly for those approaching their post-career years. Frank breaks down why managed futures have essentially zero correlation to stocks, bonds, and even gold, making them uniquely valuable during both inflationary crises (like 2022) and deflationary periods (like 2008). He references new research from Dunn Capital comparing various alternative strategies and explains how ETFs like DBMF have democratized access to institutional-quality diversification.

Beyond managed futures, the episode synthesizes Bill Bengen's latest safe withdrawal rate research with Ray Dalio's "Holy Grail" principle of uncorrelated assets. While Bengen's new book doesn't explicitly analyze alternatives, Frank connects these complementary approaches to formulate practical guidelines: maintain 40-70% equity exposure divided between growth and value, use 15-30% treasury bonds for recession protection, allocate 10-25% to alternatives, and limit cash to under 10%.

The discussion takes a critical look at cookie-cutter financial advice, particularly questioning whether paying 0.3% annually to a Vanguard advisor provides value when their recommendations often involve overlapping funds and questionable international bond allocations. Frank challenges the "worship of simplicity" that permeates financial discussions while exposing the irony that these same advisors often recommend complex multi-fund portfolios.

What emerges is a call for "system two" thinking—the willingness to incorporate new information rather than clinging to outdated formulas out of consistency.

Support the show

In this episode we answer emails from Phil, MyContactInfo, and Eric.  We discuss implementing factor investing and making portfolio adjustments in a risk-parity style portfolio, HECOMs and other considerations about reverse mortgages and buffered products, the fundamental problems with IUL that need to be accounted for before using it, and just how rich you probably need to be to be using insurance products as investments.  Hint:  You are not that rich.

Links:

Swedroe Factor Investing Book:  Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today by Andrew L. Berkin | Goodreads

Long View Podcast About HECOMs:  Don Graves and Wade Pfau: How - The Long View - Apple Podcasts

Andy Panko Cautionary Video About IUL:  Beware of misleading Indexed Universal Life insurance ("IUL") illustrations (youtube.com)

Andy Panko IUL Critique On Big Picture Retirement Podcast:  Unmasking the IUL Sales Pitch with Andy Panko (bigpictureretirement.com)

Private Placement Life Insurance:  How Does Private Placement Life Insurance Work? - ValuePenguin

Amusing Unedited AI-Bot Summary:

Is your portfolio prepared for the next economic downturn? Join us on this episode of Risk Parity Radio as we tackle an intriguing email from Phil, a listener from Portugal contemplating a major portfolio overhaul. We dig deep into the nuances of factor investing, particularly momentum and profitability factors, and offer critical advice on the potential risks of reducing bond allocations in favor of equities. We emphasize the importance of leveraging financial analysis tools like Portfolio Charts and Portfolio Visualizer to make informed decisions, and stress the need for a balanced approach throughout both the accumulation and decumulation phases of investing.

We also navigate the labyrinth of investment strategies and financial products, evaluating the pros and cons of dollar-cost averaging amidst market volatility, and scrutinize costly options like Home Equity Conversion Mortgages (HECMs) and Indexed Universal Life (IUL) insurance products. Highlighting the potential pitfalls of these profit-driven offerings, we advocate for well-diversified portfolios as the cornerstone of robust financial planning. Tune in to discover practical tips on managing taxable accounts, avoiding misleading insurance products, and achieving optimal portfolio performance, all while staying grounded in sound financial principles.

Support the show

In this episode we answer emails from Robert, Jamie and Richard.  We discuss transitioning away from a Boglehead Three Fund portfolio due to its obsolete nature, a query about the DBMF prospectus and an early retirement with a 70/30/10 risk-parity style portfolio in the face of some spurious Sonia-like objections.

Links:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Merriman Best-In-Class ETF List:  Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)

Morningstar Portfolio Analysis Of VTI:  VTI – Portfolio – Vanguard Total Stock Market ETF | Morningstar

VXUS:  VXUS – Portfolio – Vanguard Total International Stock ETF | Morningstar

AVDV:  AVDV – Portfolio – Avantis International Small Cap Val ETF | Morningstar

AVES:  AVES – Portfolio – Avantis Emerging Markets Value ETF | Morningstar

Early Retirement Now Spreadsheet Toolbox:  An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement Now

Amusing Unedited AI-bot Summary:

What if your international and bond funds aren't providing the diversification you think they are? On this episode of Risk Parity Radio, we address Robert's inquiry about optimizing his family's portfolio during the accumulation phase. We'll dissect the limitations of total international funds when paired with a U.S. S&P 500 or total market fund, and why they may fail to deliver the diversification you seek. We'll also explore Robert's proactive strategy of reallocating bond investments into stock funds during market downturns and discuss the merits of increasing U.S. stock exposure while rethinking the necessity of international holdings.

We'll further challenge the conventional wisdom of international versus domestic funds and introduce modern alternatives that can bring true diversification to your portfolio. Recommendations from the Merriman Foundation, such as AVDV and AVES, are highlighted for their potential to balance your investments by tilting towards small-cap and value stocks in international markets. Lastly, we dive deep into the complexities of fund disclosures and benchmarks, offering alternative methods to evaluate funds more effectively. Gain insights that will guide you toward a more strategic and diversified investment approach for long-term growth.

Support the show

In this episode we answer emails from Chris, Andrew and Jenzo.  We discuss portfolio, forms of leverage in leveraged portfolios, transitioning to a Golden Butterfly portfolio, and working with your spouse productively on your finances.

And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Father McKenna Center:  Home - Father McKenna Center

Article re Margin vs. Leveraged ETFs:  Margin Trading vs. Leveraged ETFs | Cumberland Advisors

Optimized Portfolios:  Optimized Portfolio - Investing and Personal Finance

Leveraged ETFs Article:  Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs (ddnum.com)

Warren Buffett's Alpha Article:  Full article: Buffett’s Alpha (tandfonline.com)

Gottman -- "Eight Dates" Book:  Eight Dates: Essential Conversations for a Lifetime of Love (gottman.com)

Amusing Unedited AI-bot Summary:

Ever wondered if using margin or leveraged ETFs is the smarter choice for your investment strategy? This week on Risk Parity Radio, we promise to shed light on this ongoing debate. As we kick off the episode, we liken our podcast to a dive bar of personal finance where humor enthusiasts and seasoned investors alike can find common ground. With a lively introduction, we announce the grand unveiling of our weekly portfolio reviews for eight sample portfolios available on our website. An email from Chris sets the stage for a deep dive into the nuances of leveraging investments using margin or box spreads, responsible leverage, and current rates, all while thanking our generous listeners for their support of the Father McKenna Center.

Are high margin rates making you reconsider your investment strategy? We dissect this dilemma by exploring the current landscape and why leveraged ETFs might just be your best bet. With a focus on ETFs like NTSX and UPRO, we suggest additional resources such as Optimized Portfolios to help you navigate your options. Inspired by listener feedback, we also touch on the concept of optimal leverage, referencing studies like "Warren Buffett's Alpha," and discuss the importance of consistent investing strategies over market timing when building a risk-parity portfolio over the next five years.

Ready for some good news? This has been an exciting week in the market, with gains across the board. From the S&P 500 to managed futures, everything is up, and our eight sample portfolios are reaping the benefits. We highlight the standout performances of newer and experimental portfolios like the Levered Golden Ratio and the Optra Portfolio. To wrap things up, Frank Vasquez delivers a spirited and humorous sign-off, reminding us to consult with personal advisors before making any financial decisions. Tune in for a rollercoaster of insights and laughs that you won't want to miss!

Support the show

In this episode we answer emails from Ned, Kyle and Willy.  We discuss tools for the sight-impaired, building out from an accumulation portfolio, the new bitcoin ETFs, and what to do in a complex Coast FI situation involving both an invested portfolio and some raw land.

Link:

Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna Center

Amusing Unedited AI-bot Summary:

Can a legally blind investor successfully navigate the complex world of DIY investing? Tune in as we uncover the inspiring story of Ned, who shares his personal journey and the accessibility tools that empower him to make informed investment decisions. Learn how he balances his focus on large and mid-cap growth stocks while exploring the potential benefits of adding small-cap value, long-term treasuries, and alternative assets like gold and managed futures to his portfolio.

In another fascinating segment, we break down the power of ETFs for investing in digital assets such as Bitcoin and Ether, and how platforms like Fidelity and Schwab make it seamless. We then tackle a challenging financial scenario with Willy, who is on the brink of transitioning to Coast FI. Delve into strategies for evaluating his portfolio mix, the implications of selling rural recreational land, and the potential benefits of reallocating to more liquid investments. Discover practical tips and thoughtful analysis to help you make smarter investment choices and achieve financial independence.

Support the show

In this episode we answer emails from Frank, Michael and Aaron.  We discuss four good portfolio analyzer tools, the hidden meanings in the Risk Parity Radio logo, the deficiencies of the website and where to find good international funds to use for portfolio construction.

And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna Center

Portfolio Visualizer Monte Carlo Simulator:  Monte Carlo Simulation (portfoliovisualizer.com)

Portfolio Charts Portfolio Matrix Tool:  Portfolio Matrix – Portfolio Charts

Early Retirement Now Toolbox:  An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement Now

Testfolio Calculator:  testfol.io

Geometric Golden Ratio Pentagon:  Golden Ratio in Regular Pentagon (cut-the-knot.org)

Misbehavior of Markets Book:  The (Mis)Behavior of Markets by Benoît B. Mandelbrot | Goodreads

More Than You Know Book:  More Than You Know: Finding Financial Wisdom in Unconventional Places by Michael J. Mauboussin | Goodreads

Merriman Best In Class ETF List:  Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)

Video Re Best In Class ETFs:  Bootcamp #9 Best in Class ETF Update 2024 (youtube.com)

DFA Mutual Fund List:  Funds | Dimensional

Truncated AI-bot Summary:

Can you imagine transforming your financial journey in the same way you might find camaraderie in your favorite dive bar? Welcome to Risk Parity Radio! Listener Frank reaches out with gratitude and a request for the best tools to backtest portfolios and determine safe withdrawal rates. We also tip our hats to Frank's generous donation to the Father McKenna Center, underscoring our ongoing charity drive in collaboration with the Financial Quarterback podcast.

Ever wondered which platforms provide the most reliable data for crafting your financial future? We break down some of the top tools in the industry, like Portfolio Visualizer, Portfolio Charts, and the Early Retirement Now toolbox, along with the new player, Testfolio.  Along the way, we debunk myths around CAPE ratios and share a heartfelt story about our Risk Parity Radio logo, born out of the creativity sparked during the 2020 lockdown.

From a cheerful Scottish greeting to a deep dive into international investing, this episode promises both humor and expertise. We tackle Aaron’s email about international ETFs, emphasizing the importance of non-overlapping funds for true diversification. Drawing from resources like the Merriman Foundation and Chris Pedersen's analyses, we guide you in selecting top-tier funds from DFA and Avantis. 

Support the show

In this episode we answer emails from Jared, Jon and Jimmy.  We got the three Js!  We discuss Jared's work to create AI Uncle Frank, his accumulation variation of the O.P.T.R.A. sample portfolio, carry strategies, whether to reinvest distributions and using multiple managed futures funds.

Links:

Father McKenna Center Donation Page (don't forget to include "The Financial Quarterback Match" in the comment/dedication box):  Donate - Father McKenna Center

Jared's Accumulation O.P.T.R.A. Portfolio:  testfol.io

Resolve Asset Management Video on Carry Strategies:  Navigating Market Volatility Mastering Managed Futures and Carry Strategies (youtube.com)

CCRV Fund:  CCRV – iShares® Commodity Curve Carry Strat ETF – ETF Stock Quote | Morningstar

ICITF Fund:  ICITF – iPath® Optimized Currency Carry ETN – ETF Stock Quote | Morningstar

Video on QIS Fund:  Simplify QIS Fund Deep Dive (youtube.com)

Amusing AI-Bot Generated Summary:

Ever wondered if leveraging your investment portfolio could lead to better returns? Discover Jared's transformative journey from a mechanical engineer to a machine learning enthusiast and the creator of a Risk Parity Radio chatbot! Jared shares his intricate process of optimizing a traditional 50-50 stock allocation into a more diversified and leveraged strategy. We’ll dissect the potential benefits and pitfalls of his approach, with a spotlight on managing leverage, mitigating drawdowns, and enhancing overall risk management.

We also extend our heartfelt thanks for your generous contributions to the Father McKenna Center. Dive into the exciting realm of AI as we discuss how it's revolutionizing podcast transcriptions and even mimicking the host's voice. Plus, we explore translating podcast episodes into a book with the help of AI. Don't miss our deep dive into listener questions about leveraging portfolios for accumulation, the intricacies of handling dividends and distributions, and an examination of managed futures funds like DBMF and KMLM. Whether you’re in the accumulation or decumulation phase, we’ve got actionable strategies to help you stay on track for long-term success.

Support the show

In this episode we answer emails from Justin, Joe and Jenzo.  We discuss the legacy of Risk Parity Chronicles, basic accumulation principles, and what we can learn from a debate on gold between Ben Felix and Tyler of Portfolio Charts.  And
 talk about our charitable promotion for the Father McKenna Center.

And then we go through our weekly portfolio reviews of all eight of the sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna Center

Financial Quarterback Podcast With Yours Truly:  Breaking Down the Holy Grail of Diversified Portfolios w/ Frank Vasquez Jr. (Risk Parity Radio) (youtube.com)

Justin's Station Wagon Portfolio:  The Station Wagon Portfolio - Google Docs

Jenzo's Link to the Great Gold Debate:  Ben & Tyler showdown - Google Docs

AI-generated summary (use at your own risk):

Can diversification safeguard your portfolio against turbulent market conditions? Join us at Risk Parity Radio, the podcast with a dive bar vibe where humor meets investment wisdom. This episode begins with a performance review of our eight sample portfolios, demonstrating how diversification has been a protective shield amid market volatility. Plus, we're excited to feature our charitable promotion for the Father McKenna Center, urging listeners to donate and take advantage of our matching offer.

We welcome back Justin, the insightful mind behind the now-dormant "Risk Parody Chronicles," for a thought-provoking discussion on the value of freely sharing financial knowledge. We revisit the Station Wagon Portfolio and emphasize the significance of adhering to a well-devised investment strategy. We also respond to Joe's questions about the accumulation phase, advocating for a combination of low-cost index funds, such as S&P 500 and small-cap value funds, and stressing the importance of consistency over the allure of recent top performers.

Curious about the timeless debate on gold's role in modern portfolios? We dissect a lively debate between Tyler and Ben Felix, scrutinizing the historical and contemporary merits of holding gold. Alongside, we provide a detailed market analysis, highlighting the recent rise in gold and long-term treasury bonds, and review how different portfolios like the All Seasons and Golden Butterfly have weathered the storm. This episode is a reminder to employ critical thinking and adopt a comprehensive approach when evaluating investment strategies and market trends.

Support the show

In this episode we answer emails from Ed, Cy, Visitor 5002, and Lucas.  We discuss preferred shares funds, rebalancing and ranting, how the podcast sausage is made and Risk Parity Chronicles.  And the charitable matching opportunity with the Financial Quarterback for the benefit of the Father McKenna Center.

Links: 

Father McKenna Center Donation Page (don't forget to include "The Financial Quarterback Match" in the comment/dedication box):  Donate - Father McKenna Center

Financial Quarterback Podcast With Yours Truly:  Breaking Down the Holy Grail of Diversified Portfolios w/ Frank Vasquez Jr. (Risk Parity Radio) (youtube.com)

PFFV On Morningstar:  PFFV – Global X Variable Rate Preferred ETF – ETF Stock Quote | Morningstar

Risk Parity Chronicles On YouTube:  Risk Parity Chronicles - YouTube

Golden Butterfly Portfolio In Depth:  Golden Butterfly Portfolio – Portfolio Charts

Unedited Artificial Intelligence Description:

Ever wondered how to double the impact of your charitable donations while navigating the world of preferred shares funds? On this episode of Risk Parity Radio, we kick things off with something special—a segment dedicated to answering listener emails and revealing our latest charitable promotion for the Father McKenna Center. Learn about an incredible matching donation opportunity connected to my appearance on the Financial Quarterback podcast, and hear about a clever donation strategy using donor-advised funds suggested by our listener, David.

Thinking about adding preferred shares to your portfolio but not sure where to start? Listener Ed's email prompts a deep dive into the mechanics and benefits of preferred shares funds. Discover why these funds are appealing, particularly for those in high tax brackets, as we compare ETFs such as PFF, PGX, PFXF, and FPE. I'll share my current top picks, PFFV and PFFD, which boast lower expense ratios and higher dividend payouts, and discuss the tax advantages of qualified dividends. Whether you're looking to enhance your yield or add stability to your investments, this segment is packed with actionable insights.

Finally, we turn our focus to the critical practice of portfolio rebalancing, illustrating how this strategy can help you buy low and sell high. We'll share recent examples to highlight its effectiveness, all while adding a bit of entertainment with a playful nod to "Willy Wonka & the Chocolate Factory." Don't forget to engage with us by subscribing, giving ratings, and leaving reviews on your favorite podcast platforms. Tune in for a perfect blend of insightful financial advice, engaging listener interactions, and tips on making a difference through thoughtful charitable contributions.

Support the show

In this episode we answer questions from Nonamed, Ronald, and Jose.  We discuss how sensational financial media works and why you should ignore it, being thankful for our listeners and how correlations work and relate to macro-economic environments in the context of the Holy Grail principle.  And we discuss our charitable match outreach for the Father McKenna Center.

And then we go through our weekly portfolio reviews of all eight of the sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna Center

Risk Parity Radio RSS Feed Page For Word Searching The Podcast:  Risk Parity Radio RSS Feed (buzzsprout.com)

UNC Paper (not Duke!) Re Treasury Bond Correlations In Recessions (see Page 53 for Chart):  ssrn_id4768684_code533828.pdf (elsevier-ssrn-document-store-prod.s3.amazonaws.com)

Ray Dalio Explains The Holy Grail Principle: Ray Dalio breaks down his "Holy Grail" (youtube.com)

Bridgewater Paper With Basic Quadrant Model Example (see Page 8):   Bridgewater Paper 2009.12 AW Info Pack.doc (granicus.com)

Support the show

In this episode we answer emails from Steve, Grant, and Alexi (a/k/a "the Dude").  We discuss investing in managed futures and property and casualty insurance companies, rebalancing mechanisms and fitting those into a portfolio, Grant's various gambling problems with leveraged funds and assorted Metaverse doom-scrolling, and the recent annoying changes with Portfolio Visualizer.  And our charitable push for our charity, the Father McKenna Center --get the match!

Links:

Father McKenna Center Donation Page (don't forget to include "The Financial Quarterback Match" in the comment/dedication box):  Donate - Father McKenna Center

SocGen Managed Futures CTA And Trend Indices:  Prime Services (Newedge) Indices (societegenerale.com)

Kitces Rebalancing Methods Article:  Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)

New Testfol Backtester With OPTRA Example:  testfol.io

Support the show

in this episode we answer emails from Chris, Trudie, and Earl.  Highlights:  The Father McKenna Center "Top of the T-shirt" campaign raised over $66,624 thanks to generous listener contributions; financial advisors are conflicted and also relatively uninformed marketing machines who are not very curious about finances and are too reliant on calculators; AI tools like Copilot can help implement risk parity strategies when fed quality information.

And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

If you have comments or questions, please email frank@riskparityradio.com or visit www.riskparityradio.com.

Breathless AI-Bot Summary:

What happens when financial wisdom meets unconventional thinking? This episode of Risk Parity Radio opens with Emerson's timeless quote about foolish consistency being "the hobgoblin of little minds" – perfectly setting the stage for a fresh look at portfolio management that marches to a different beat.

The Risk Parity Radio community shines as Frank announces the remarkable success of the Father McKenna Center fundraising campaign, which raised over $66,624. This achievement showcases the extraordinary engagement of listeners who value both financial knowledge and giving back. As Frank puts it, "I never really cared about having the largest audience. I just wanted to have the most engaged audience" – and with 2,500 regular listeners who actively participate in such initiatives, that goal has clearly been achieved.

Diving into listener correspondence, Frank explores how one community member has leveraged AI tools like Copilot to implement risk parity strategies. This sparks a broader examination of technology's role in personal finance, with Frank cautioning that AI is only as good as the information it's fed. In an age where many advisors have become what Frank calls "calculator jockeys" – professionals who rely on planning software without understanding its limitations – this distinction between tools and expertise becomes crucial.

The episode delivers a masterclass in practical financial knowledge, including an elegant explanation of the 240/200 rule for calculating monthly distributions. This mathematical shortcut exemplifies the podcast's approach: making complex concepts accessible without talking down to the audience. Frank demonstrates how dividing a portfolio value by 240 yields a monthly distribution equivalent to a 5% annual withdrawal rate – the kind of straightforward, useful information that listeners can immediately apply.

The weekly portfolio review reveals impressive performance across all eight sample portfolios, with gold continuing its remarkable run at 36.91% year-to-date. From conservative allocations to more experimental leveraged strategies, these real-world examples provide valuable insights for listeners navigating their own investment journeys.

Ready to break free from financial convention and build a portfolio that truly reflects your goals? Subscribe now and join a community of independent thinkers who know that sometimes the most rewarding path is the one less traveled.

Support the show

In this final episode of Season Four we discuss the concepts of rebalancing and reallocating in all their glory and go through the planned annual rebalancings for four of the sample portfolios in excruciating detail.  We also discuss all of the assets and allocations in the Risk Parity Ultimate portfolio and which ones we actually own in real life.

And we go through our weekly portfolio reviews of all eight of the sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional link:

Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna Center

Support the show

In this episode we answer emails from Judy, Steve and MyContactInfo.   We discuss a recent offer by The Financial Quarterback podcast to match donations the the Father McKenna Center (yay!), why you should buy gold ETFs and NOT physical gold, Cartman and Kyle, and the varying value of education depending on the individual.

Links:

Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna Center

ETF Database -- Gold ETFs:  Gold ETF List (etfdb.com)

Listener John's Gold ETF link:  9 low cost physical Gold ETFs for portfolio parity - SmartMoneyToolbox

GLD FAQs:  FAQs > USA > SPDR Gold Shares (GLD). Bringing the gold market to investors

Support the show

In this episode we answer emails from Brian, Wendy, and Midas.  We discuss the bond fund GOVT and how it fits or doesn't fit in portfolio construction, some basics about IRA conversions and retirement resources (podcasts and groups), and follow up on Episode 340 with a discussion on our pedagogical approach, the pluses and minuses of the Socratic Method and tilting at logical fallacies.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Morningstar Analysis of GOVT:  GOVT – Portfolio – iShares US Treasury Bond ETF | Morningstar

Big Picture Retirement Podcast About IRA Conversions:  When Roth IRA Conversions Go Too Far (bigpictureretirement.com)

Andy Panko YouTube Topical Playists:  Retirement Planning Education - YouTube

Link to Retirement Planning Education Facebook Group (and other materials):  Retirement Planning Education Facebook group

Retirement Answer Man Podcast:  A Top Retirement Podcast, with over 8 Million Downloads — The Retirement Answer Man® (rogerwhitney.com)

Retirement & IRA Show:  Podcasts Archives - The Retirement and IRA Show

Trogdor (Just Because):  Trogdor Song (youtube.com)

Support the show

In this episode we answer emails from Jeffrey, Justin and Matt.  We discuss the concept of "skew" generally and in the context of investing in managed futures, a "station wagon" portfolio similar in macro-allocations to the new OPTRA sample portfolio, and the age old question of whether to pay down debt or invest.  (Uncle Frank says "Do Both.")

Links:

Basic Article About Skew:  Right Skewed vs. Left Skewed Distribution (investopedia.com)

MFUT Fund Fact Page:  Cambria Chesapeake Pure Trend ETF (MFUT) | Cambria Funds

Justin's Station Wagon Portfolio:  The Station Wagon Portfolio - Google Docs

Risk Parity Chronicles Video on Asset Swaps:  How to Do an Asset Swap (youtube.com)

Arch Portfolio Backtester:  Portfolio Backtest — Arch Indices Portfolio Analyzer

Support the show

In this episode we introduce a new sample experimental portfolio, the O.P.T.R.A., which is now also featured on the Portfolios Page at the website.  It is a mixture of the latest and greatest ideas in portfolio construction.

Links:

O.P.T.R.A. backtest:  testfol.io

O.P.T.R.A. correlation analysis:  testfol.io

Morningstar UPRO:  UPRO – Portfolio – ProShares UltraPro S&P500 | Morningstar

Morningstar AVGV:  AVGV – Portfolio – Avantis All Equity Markets Value ETF | Morningstar

Morningstar GOVZ:  GOVZ – Portfolio – iShares 25+ Year Treasury STRIPS Bd ETF | Morningstar

Morningstar GLDM:  GLDM – Portfolio – SPDR® Gold MiniShares | Morningstar

Morningstar DBMF:  DBMF – iMGP DBi Managed Futures Strategy ETF – ETF Stock Quote | Morningstar

Support the show

Support the show

In this episode we answer emails from Steven, Kaleb and Reynolds.  We discuss a levered small cap fund (SAA), short-term cash management and related ETFs, and how to compare and use bond funds of differing durations.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

ETF Database -- Ultra Short Term Bond Funds:  The Web's Best ETF Screener | ETF Database (etfdb.com)

Morningstar Article on BOXX:  BOXX ETF Promises T-Bill Returns Without Taxable Income | Morningstar

Morningstar Analysis of IEF:  IEF – Portfolio – iShares 7-10 Year Treasury Bond ETF | Morningstar

Kitces Re-balancing Article:  Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)

Support the show

In this episode we answer emails from Mark, Casey, and Kyle.   We discuss transitioning from a drecky complicated Personal Capital/Empower portfolio to a simple risk-parity style portfolio, the song "Anchorage", and Sam Kinison's take on an IUL policy.

Links:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Mark's Portfolio Analysis:  Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)

Testfol.io Analysis of Mark's Portfolio:  testfol.io

Larry Kennedy Album on Spotify:  Everybody Knows - Album by Larry Kennedy | Spotify

Andy Panko's Insurance Playlist:  Insurance - YouTube

Support the show

In this episode we answer emails from David, Eric from Cincy, and Pete.   We discuss Mike Green's recent commentary about index fund trends and whether its a problem, ROAD HOUSE, children, and Larry Swedroe's esoteric personal portfolio.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Mike Green Interview:  Michael Green: Market Efficiency Is Not The Question | Rational Reminder 302 (youtube.com)

Larry Swedroe Article #1:  Addressing Issues With High U.S. Equity Valuations (kitces.com)

Larry Swedroe Article #2:  In The Long Run, Stocks Outperform Bonds, Or Do They? (kitces.com)

Larry Swedroe's Personal Portfolio:  Show Us of Your Portfolio II: Larry Swedroe on Alternatives and Interval Funds (youtube.com)

Support the show

In this episode we answer emails from Dr. Anonymous, Lance, John and Eli.  We discuss how to find a lawyer, extended term bond funds, gold ETFs and how ETFs are constructed.

Links:  

Father McKenna Center Donation Page:  Donate - Father McKenna Center

John's Gold ETF link:  9 low cost physical Gold ETFs for portfolio parity - SmartMoneyToolbox

ETF Article:  Exchange-Traded Fund (ETF): What it is and How to Invest (investopedia.com)

"Authorized Participant" Article:  What Is an Authorized Participant? Definition, Examples, Benefits (investopedia.com)

Support the show

In this episode we answer emails from Andy, Phil and Brady.  We entertain Andy's musings on small cap value and the economy with crystal balls and complex adaptive systems theory, discuss the foibles of radio personalities attempting to try to be able to comment on what we do -- and their hypocrisies and conflicts of interest --, and touch base with the parent of a special needs child.

Links:

Phil's link to Radio Personality Podcast:  Query Day - Talking Real Money - Investing Talk - Apple Podcasts

Mary Tyler Moore Episode:  The Mary Tyler Moore Show S5E23 Ted Baxter's Famous Broadcasters' School (February 22, 1975)

Comparison of 60/40 and Golden Ratio Portfolios:  https://testfol.io/?s=eUbVJ2frelJ

Apella Wealth Form ADV:  APELLA WEALTH - Investment Adviser Firm

Morningstar Article Re GLDM and DBMF:  How ETF Diversifiers Performed During Market Turmoil | Morningstar

Breathless Unedited AI-Bot Summary:

Ever wonder why financial advisors insist DIY investing is "too complicated" while charging fees that can consume a third of your retirement income? In this eye-opening episode, Frank Vasquez exposes the hypocrisy behind mainstream financial advice and offers practical alternatives for truly resilient portfolios.

When a listener asks whether structural market changes warrant portfolio adjustments, Frank dives into the nature of financial markets as complex adaptive systems. Like a sandpile where it's impossible to predict which grain will cause an avalanche, markets respond to events in unpredictable ways that even the most sophisticated models can't forecast. This reality doesn't mean we should abandon strategy—rather, it underscores why diversification across truly different asset classes matters more than ever.

Frank takes aim at financial media personalities who promote oversimplified solutions while dismissing alternatives they don't fully understand. Through careful analysis of SEC disclosures, he reveals how some advisors criticize strategies on air that their own firms use with paying clients. The fixation on "simplicity" often serves as marketing to convince DIY investors they need professional help, while masking fee structures that can extract 1-1.5% of assets annually—an enormous drain on retirement resources.

The episode highlights recent Morningstar research confirming what Risk Parity Radio has long advocated: portfolios incorporating alternative assets like gold and managed futures demonstrably outperform traditional 60/40 allocations while reducing volatility. As Frank notes, echoing Einstein, we should make investing "as simple as possible, but no simpler." This wisdom proves especially crucial during withdrawal phases when sequence risk poses the greatest threat to retirement security.

Whether you're planning for your own retirement or, like one listener, strategizing for a dependent with special needs who may require lifelong support, this episode offers both practical insights and a framework for evaluating financial advice with clear eyes. In a world where conflicts of interest often distort financial guidance, Frank's independent perspective provides a refreshing and valuable counterpoint.

Support the show

In this episode we answer emails from Stuart, George and MyContactInfo.  We discuss a follow-up on another listener's accumulation portfolio, the foibles of trying to predict future interest rates and common fallacious reasoning, levered inverse treasury bond funds and other funds that do well in rising interest rate environments, and a follow up on our target date fund rant episode (#333).

Links:

Portfolio Visualizer Analysis of UPRO and synthetic alternatives:  Backtest Portfolio Asset Allocation (portfoliovisualizer.com)

TestFol Analysis with an inverse treasury bond exposure:  testfol.io

Support the show

In this episode we answer emails from Jeff, James and Graham.   We discuss standard deviations and other metrics and tools at Portfolio Charts, revisit Episode 194 regarding the "Cockroach" portfolio, timing the transfer of a 401k to and IRA for better management options and some reasons for holding on to traditional IRAs and not converting them.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Portfolio Matrix Tool With Bookmark To Jeff's Portfolio:  Portfolio Matrix – Portfolio Charts

Portfolio Annual Returns Tool With Bookmark To Jeff's Portfolio:  Annual Returns – Portfolio Charts

Portfolio Drawdowns Tool With Bookmark To Jeff's Portfolio:   Drawdowns – Portfolio Charts

Cockroach Portfolio Link:  The Cockroach Approach Whitepaper - Mutiny Fund

Big Picture Retirement Podcast Re Roth Conversions:  When Roth IRA Conversions Go Too Far (bigpictureretirement.com)

Support the show

In this episode we talk about some recent unfavorable changes to Portfolio Visualizer, have a look at a new backtesting tool, and then get back at it with emails from James, Andrew, Phil and Frodo.  We discuss how flexible withdrawal strategies improve safe withdrawal rates and how we use them as a fail-safe or backstop to our 3-1-1 plan, options for financing buying a house, a funny Avengers video and transitioning grandma's 19-fund portfolio to something simpler and better.

Links:

Rob Berger Video re Portfolio Visualizer:  Navigating Portfolio Visualizer's New Design and a Free Alternative (youtube.com)

Testfol Backtester with A Sample Analysis:  testfol.io

Morningstar Report re Variable Withdrawal Strategies:  Six Retirement Withdrawal Strategies that Stretch Savings | Morningstar

Portfolio Charts Variable Withdrawal Calculator:  Retirement Spending – Portfolio Charts

Phil's Video:  Introducing NOW internet (youtube.com)

Big ERN Article Re Cederburg Paper:  100% Stocks for the Long Run? - Early Retirement Now

Support the show

In this episode we answer emails from Scott, Midas, and Neil.  We discuss national debt apocalypse theories, the misuse and cherry-picking involved in bad data analyses and umbrella insurance.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Reinhardt & Rogoff Book:  This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart | Goodreads

Money For The Rest of Us National Debt Masterclass:  National Debt Master Class Part 1/3 | Money for The Rest of Us

Security Analysis Podcast with Yours Truly:  Frank Vasquez: Risk Parity Investing Part 2 (securityanalysis.org)

Portfolio Charts "Ingredients" Article:  Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts

Long Term Treasuries vs. Stock Market 1981-2010:  Backtest Portfolio Asset Class Allocation (portfoliovisualizer.com)

Umbrella Insurance:  What Is Umbrella Insurance Policy? Definition and If You Need It (investopedia.com)

Support the show

In this episode we answer emails from Average Joe, Matt, Kimbrough and Jon.  We discuss goooooold, Matt's proposed portfolio, preferred shares fund PFF and how often to look at your portfolio without going insane.

But first we discuss a recent article from David Blanchett recognizing that a 5% withdrawal rate ought to be the standard for financial planners and a New York Times article about financial independence and the EconoMe conference.

Links:

David Blanchett 5% Rule Article:  Is the 4% Rule Too Safe? | ThinkAdvisor

2013 Article Saying the Opposite:  The 4 Percent Rule is Not Safe in a Low-Yield World by Michael S. Finke, Wade D. Pfau, David Blanchett :: SSRN

New York Times FIRE Article (paywall):  Meet the FIRE Savers Who Retired Early - The New York Times (nytimes.com)

Matt's Proposed Portfolio:  Portfolio Matrix – Portfolio Charts

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Support the show

In this episode we answer emails from Kimbrough from Anchorage and anonymous Visitors from British Columbia and Denver.  We discuss fish hatching and slaughterhouses, long term treasury bond funds, the inherent problems and inefficiencies with many popular but inflexible withdrawal plans, and how we use our flexible 3-1-1 guidelines to match and maximize spending, fixing a cash hoarding problem and why you want a growth/value split in your stock allocations.

Links:

Security Analysis Podcast with Yours Truly:  Frank Vasquez: Risk Parity Investing Part 2 (securityanalysis.org)

VSG's Weird Portfolio:  Weird Portfolio – Portfolio Charts

Merriman Best-In-Class ETFs:  Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)

Merriman Podcast re Best-In-Class ETFs:  Best in Class ETF 2024 Updates (paulmerriman.com)

Support the show

In this episode we answer emails from Steve, Mark, and Judy.   We take a frolic and detour into talking about going to law schools, talk about some Rob Berger videos and bucketeering, robo-advisor things and why they are not very helpful, and better choices.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Father McKenna Center Spring 2024 Newsletter:  Newsletter Spring 2024 - Father McKenna Center

Rob Berger Video on "Know Nothing" Portfolios:  Fed Chair Powell Just Taught A Masterclass On Investing (youtube.com)

Rob Berger Interview of Harold Evensky:  Conversation with the Father of the Bucket Strategy--Harold Evensky - YouTube

Rob Berger On "Bucket Strategies" Generally:  The Bucket Strategy is Flawed--Do this Instead - YouTube

Rob Berger On The "Never Retire" Retirement Strategy:  7 Reasons to Never, Ever Retire (even if you can) (youtube.com)

Support the show

In this episode we answer emails from Zane, Slim Jim, and Jim Kirk.   We discuss recent moves in world gold markets, good and bad mental models of collective action and critical events, including Mimetic Theory and fractal sand pile models, avoiding the physical metals racket, the data and evidence showing that retirees experience inflation at a much lower rate than the CPI (and most financial planners and DIYers get this completely wrong, resulting in bad planning), and the new global portfolio analysis article at Portfolio Charts (again).

Links:  

Retirement Spending Smile models:  What Is The 'Retirement Spending Smile'? | Retirement Researcher

Spending Trajectories After Age 65 Research Paper and  Summary:  Spending Trajectories After Age 65: Variation by Initial Wealth | RAND

Portfolio Charts Article Re Global Portfolios:  What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts

Support the show

In this episode we answer emails from Anderson, Brian and Drew.   We entertain ourselves on 4/20 with Anderson's "Uncle Frank" Portfolio and learn something from it, discuss asset swapping for management of retirement accounts with a hat tip to Justin (Risk Parity Chronicles), and discuss the new Global Portfolio analysis and tools from Tyler at Portfolio Charts.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Anderson's "Uncle Frank" Portfolio:  Backtest Portfolio Asset Allocation (portfoliovisualizer.com)

"How To Do An Asset Swap" Video From Justin:  How to Do an Asset Swap (youtube.com)

New Portfolio Charts Global Portfolio Analysis And Tools:  What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Support the show

In this episode we answer emails from Kyle, Andrew, Sameer and James.  We discuss some portfolio comparisons of levered 60/40 portfolios, interpreting and comparing safe withdrawal rates from various calculators and their practical application in consideration of variable expenses and needs (our 3-1-1 flexible withdrawal plan),  the foolish consistencies of DIYer and financial planners who seem to enjoy discouraging retirement spending,  and recent articles about Fidelity's spat with some ETF providers.

Links:

Kyle's Portfolio #1:  Backtest Portfolio Asset Allocation (portfoliovisualizer.com)

Kyle's Portfolios #1 and #2:  Backtest Portfolio Asset Allocation (portfoliovisualizer.com)

Kyle's Portfolios #1, #2 and #3:  Backtest Portfolio Asset Allocation (portfoliovisualizer.com)

Golden Butterfly Portfolio -- SWR And Other Characteristics:  Golden Butterfly Portfolio – Portfolio Charts

Larry Swedroe Interview About New Book and Factor Investing:  ‘Buffett really was not a great stock picker’: Financial researcher Larry Swedroe on how investors can emulate the billionaire investor – NBC Connecticut

Article #1 re Fidelity and Fees:  Fidelity Puts Nine ETF Firms on Notice That New Fees Are Looming - Bloomberg (archive.fo)

Article #2 re Fidelity and Fees:  Fidelity Adds Surcharge to ETF Platform | etf.com

Support the show

In this episode we answer emails from a Mysterious Visitor, Pal and Byron.  We review our approach to international stock funds and how to improve their diversification, try to help out a Canadian nomad and discuss some new Vanguard funds.

And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional Links:

US vs International Stocks In Strong And Weak Dollar Markets (link from Episode 393:  us-dollar-strength-has-correlated-with-performance-03312023.pdf

Testfolio Analysis of VXUS vs. AVDV and IDMO:  testfol.io/analysis?s=eDLfJ4jcFLK

Constructing a Golden Ratio Portfolio with International Components:  We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)

Byron's Link:  Vanguard Launches a New Actively Managed Bond ETF | Vanguard

New Wellington ETFs:  Vanguard to Launch First Stock-Picking ETFs With Wellington — at Its Highest Fees Yet

Breathless Unedited AI-Bot Summary:

Conventional wisdom about international diversification gets turned on its head as we explore what truly drives the performance difference between domestic and international stocks. Far from being about different economies or company headquarters, approximately 40-50% of this performance gap stems directly from currency fluctuations between the US dollar and foreign currencies. When the dollar weakens, international stocks surge; when it strengthens, US stocks lead.

For investors focused on building resilient portfolios with sustainable withdrawal rates, this revelation reshapes diversification priorities. Value versus growth diversification emerges as significantly more important than geographic diversification, followed by size factor (small versus large caps). This hierarchy challenges the simplistic notion that pairing a total US market fund with a total international fund provides meaningful protection.

Large US companies already operate globally, selling into worldwide markets regardless of headquarters location. This makes traditional total international funds less diversified from US large caps than many investors realize. Instead of blanket international exposure, we explore more effective approaches using specific international value, small-cap, and emerging market funds that provide genuine diversification benefits.

The episode also tackles practical implementation questions, including how expatriates and nomadic investors might construct globally resilient portfolios using Irish-domiciled ETFs for potential tax advantages. We briefly examine Vanguard's new ETF offerings and explain why their corporate bond funds hold limited appeal for investors seeking recession insurance rather than income.

Our monthly portfolio review highlights gold's stellar performance (up 31.56% year-to-date) amid dollar weakness, demonstrating the principles discussed throughout the episode. These eight real-world portfolios showcase different approaches to implementing risk parity principles, with performance and distribution data available at riskparityreview.com.

Support the show

In this episode we answer an email from Ingrid.  We discuss target date funds in depth and why they are not good choices for investors.  We review their history and recent academic research that reveals the truth.  You may not like it, but we hope you can handle it.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional link:

Referenced Academic Paper Revealing The Awful Truth About Target Date Funds:  The Unintended Consequences of Investing for the Long Run: Evidence from Target Date Funds by Massimo Massa, Rabih Moussawi, Andrei Simonov :: SSRN

Support the show

In this episode we answer emails from Ed, Anderson and Joe.   We discuss assisting aging parents running out of money, Anderson's levered accumulation portfolio and locating the assets, and using the G Fund in a TSP as a short-term bond fund.

Links:

Portfolio Matrix Used to Analyze Anderson's Portfolio (insert allocations per podcast):  Portfolio Matrix – Portfolio Charts

Morningstar Article re G Fund:  How Good Is the Federal Government’s G Fund? | Morningstar

Support the show

In this episode we answer questions from Dale, Brad and Corey.  We discuss a new paper about US dollar dominance and the common narrative fallacies associated with that issue, using the Rule of 55 for 401(k) withdrawals, the Nicest Guy of FI, and the basics of constructing portfolios with high historical safe withdrawal rates.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Marketwatch Article:  Dethrone the dollar? 5 charts show how U.S. currency still rules world economy. - MarketWatch

Paper re Status of US Dollar:  delivery.php (ssrn.com)

Schwab Article re The Rule of 55:  Retiring Early? 5 Key Points about the Rule of 55 | Charles Schwab

DBMF Quarterly Review:  iMGP DBi Managed Futures Strategy ETF Update with Andrew Beer | April 2024 (youtube.com)

Andrew Beer Interview On The Development And Use Of Managed Futures In Diversified Portfolios:  SI290: Honey, I Shrunk the Trend-Following ft. Andrew Beer | Top Traders Unplugged

Portfolio Charts Portfolio Matrix Tool:  Portfolio Matrix – Portfolio Charts

Support the show

In this episode we answer emails from Jon, Eli, and George.  We discuss using the tools at Portfolio Charts, methods of charitable giving to our favorite charity, extreme podcast listening, what to invest in if you are speculating on inflation next year and other gambling problems, and applying the math of Shannon's Demon to show us why we should not let the Simplicity Principle tail wag the Holy Grail principle diversification dog when constructing diversified portfolios.

Links:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

New Portfolio Charts Article re Gold and Global Safe Withdrawal Rates:  What Global Withdrawal Rates Teach Us About Ideal Retirement Portfolios – Portfolio Charts

Shannon's Demon Article from Market Sentiment:  Shannon's Demon - Market Sentiment

Shannon's Demon Article from Portfolio Charts:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts

Shannon's Demon Article from World Scientific:  SWITCHING BETWEEN TWO LOSING STOCKS MAY ENABLE PARADOXICAL WIN: AN EMPIRICAL ANALYSIS (worldscientific.com)

Shannon's Demon Article from Breaking The Market:  The Great Age of Rebalancing Begins - (breakingthemarket.com)

Support the show

In this episode we answer emails from Jetson and Jon (x2).   We discuss good times to trade, transitioning to a risk parity style portfolio with sub-optimal components and related considerations, experimenting with and learnings from the tools at Portfolio Charts, including the Portfolio Matrix and Drawdown Analyzer, and Gooooold!

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Father McKenna Center:  Home - Father McKenna Center

Portfolio Matrix Calculator:  Portfolio Matrix – Portfolio Charts

Portfolio Drawdowns Calculator:  Drawdowns – Portfolio Charts

Portfolio Charts "Ingredients" Article:  Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts

Safe Withdrawal Rate Series Article about Gold:  Using Gold as a Hedge against Sequence Risk - SWR Series Part 34 - Early Retirement Now

Support the show

In this episode we answer emails from Mark,  Justin, and Cy, and also update our answer to last episode's email from Sean.  We talk about a different approach to Sean's situation, Mark's experiments with leveraged funds, rebalancing and assorted gambling problems, reporting on the sample portfolios at the website, the difficulties of trying to plan "how much" goes in retirement, Roth and ordinary accounts, and a full-on nostalgic Blazing Saddles experience.

Links:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Mark's Experimental Portfolio Backtest:  https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=3rBetjbWFjRbRZSN6uMuIa

Shannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts

Recent Interview of Value Stock Geek:  Inside the Mind of a Value Investor w/ Value Stock Geek (theinvestorspodcast.com)

Portfolio Charts Portfolio Matrix:  Portfolio Matrix – Portfolio Charts

Support the show

In this episode we answer emails from Andrew, Sean, and MyContactInfo.  We discuss QDSIX and other AQR funds and their approaches, good and bad uses of bond ladders, and macro-issues pertaining to projected global population declines in the future.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

QDSIX fact page:  AQR Diversifying Strategies Fund - QDSIX

Ben Carlson Article on Bond Funds vs. Bond Ladders:  Owning Individual Bonds vs. Owning a Bond Fund - A Wealth of Common Sense

Niall Ferguson Article:  Global Population Collapse Isn't Sci-Fi Anymore: Niall Ferguson - Bloomberg

Shock of Gray Book:  Shock of Gray: The Aging of the World's Population and How it Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival, and Nation Against Nation by Ted C. Fishman | Goodreads

Hans Rosling's Factfulness:  Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think by Hans Rosling | Goodreads

Hans Rosling Video on Population: Why the world population won’t exceed 11 billion | Hans Rosling | TGS.ORG (youtube.com)

Hans Rosling Factfulness Video:  The mindset of factfulness | Hans Rosling | TGS.ORG (youtube.com)

Happy Pod:  BBC World Service - Global News Podcast, The Happy Pod: The gift of sight

Portfolio Charts Withdrawal Rates Article:  How to Harness the Flowing Nature of Withdrawal Rate Math – Portfolio Charts

Portfolio Charts Portfolio Matrix Comparison Tool:  Portfolio Matrix – Portfolio Charts

Portfolio Charts Portfolio Risk-Return Comparison Tool:  Risk And Return – Portfolio Charts

Support the show

In this episode we review why we are here and then answer emails from Paulo, Paul G, and Carlos.  We discuss our recent trip to the EconoMe Conference, Paulo's portfolio ideas, the plague of being unable to spend money that afflicts most popular personal finance personalities, Mark's Money Mind (a new podcast), why the Simplicity Principle should not override the Holy Grail and other investing principles, and investing from emerging market countries.

Links:

Mark's Money Mind podcast (YouTube version):  The Financial Speedometer: Tracking Your Income & Expenses | Episode 004 (youtube.com)

Paul G's Golden Butterfly analyses:  https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&sl=2lyVPkZFRfTEgVF8cZIAe5

Shannon's Demon and Rebalancing Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts

Carlos' Article re Emerging Markets:  Safe withdrawal rates from retirement savings for residents of emerging market countries (repec.org)

Support the show

In this episode we answer emails from Ed, Jesse and Kyle.  We discuss TMF and leverage in bond funds (and gambling problems), my recent ranting in Episode 321 and Ray Dalio's limitations and foibles, and my musings on guinea pigs and our recent trip to Peru.  It's action packed!

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

And add a note about the upcoming EconoMe Conference.

Additional links:

TMF web-page with holdings:  20+ Year Treasury Bull and Bear 3X ETFs | TMF TMV | Direxion

Portfolio Visualizer TMF vs. TLT vs. ZROZ Analysis:  https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=7aqdp6fzBF4NWiP8rUdH9m

Claude Shannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts

Father McKenna Center:  Home - Father McKenna Center

EconoMe Conference Speakers:  Our Speakers - EconoMe (economeconference.com)

Support the show

In this episode we answer questions from Mark, Broken Jack and Gus.  We discuss a specific withdrawal plan and why it does not need to be too complicate, the considerations and differences between complicated or risk-based problems and complex or uncertainty-based problems, ideas for people who have not saved enough by the time they get to their sixties and why to avoid "magic button" investment strategies like buy-write funds and deal with a correction about the ETF RSBT.

Links:

Immediate Annuities Website for Pricing Simple Annuities:  Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com

The Misbehavior of Markets by Benoit Mandelbrot:  The Misbehavior of Markets: A Fractal View of Financial Turbulence: Mandelbrot, Benoit, Hudson, Richard L.: 9780465043576: Amazon.com: Books

Catching Up To FI for Late Starters:  Financial Independence - Catching up to FI

RSBT Website and Information:  Bonds Managed Futures - Return Stacked ETF (returnstackedetfs.com)

Father McKenna Center:  Home - Father McKenna Center 

Support the show

In this episode we answer emails from Nick, No Name, and Nathan.  We discuss transitioning at 70% to FI, the inherent problems with a lot of psychology-based and convenience-based finance media and personal finance that fails to do the finance part first, Mary's amusement with Frank's ego (don't encourage him), and financial coaching.

And we get to hear from Abby at the Father McKenna Center.

Links:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Shannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts

Video Interview of Abby:  The Church's View on Homelessness Amid Trump’s Removal Plan in D.C. | EWTN News Nightly

If you have comments or questions, please send them to frank@riskparityradio.com or visit www.riskparityradio.com.

Breathless Unedited AI-Bot Summary:

When should you transition from a high-equity portfolio to a risk parity approach? This question, posed by a listener at 70% of their FIRE number, launches us into an exploration of timing one of the most critical shifts in an investor's journey.

The ideal transition point typically comes at 80% of your target number and about five years from your goal. The logic is straightforward: you want to secure your gains while your portfolio sits near all-time highs, shifting from aggressive growth to stability as you approach financial independence. Your decision should weigh how much you'll continue contributing and your personal risk tolerance.

This episode also pulls back the curtain on the troubling state of financial media. Too many "experts" repeat outdated concepts like the "100 minus your age" rule—a relic from the 1990s with no empirical backing. We explore how financial advice has become psychologically driven rather than financially optimized, with advisors choosing strategies that are easy to explain rather than those that deliver optimal results.

As Upton Sinclair observed, "It's difficult to get a person to understand something when their salary depends on them not understanding it." This explains why many advisors promote bucket strategies and time segmentation plans despite their inefficiency—they're selling what clients can understand, not what best serves their financial futures.

The DIY investor's advantage is clear: we can focus on data first and psychology second. Your financial behaviors should align with your goals—if you want to spend more in retirement, you need a portfolio designed for that purpose, not just psychological tricks to feel comfortable underspending.

Want to make better financial decisions? Stop trying to predict the future. Adopt a decade-long perspective instead of obsessing over current conditions. Remember that rebalancing works over time due to Shannon's Demon—the mathematical reality that regularly rebalanced diverse assets outperform in the long run.

Support the show

In this episode we answer emails from Richard, Andrew and Drew.  We discuss the now much-maligned Cederburg paper (again) and listen to Cliff Asness flog it, Jerry Parker's new managed futures ETF, TFPN and guidelines for making portfolio shifts.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

And add a note about the upcoming EconoMe Conference.

Additional links:

Cliff Asness Commentary About the Cederburg Paper:  Why Not 100% Equities (aqr.com)

BankerOnWheels Article About the Cederburg Paper:  Should You Invest 100% In Equities? (bankeronwheels.com)

Tommy Boy Clip:  Tommy Boy (8/10) Movie CLIP - Housekeeping (1995) HD (youtube.com)

Jerry Parker on podcast about TFPN:  TTU145: Jerry Parker, Founder of Chesapeake Capital (toptradersunplugged.com)

TFPN Webpage:  Trend Following ETF | Blueprint Fund Management (tfpnetf.com)

EconoMe Conference:  EconoMe Conference - March 15th-17th, 2024

Support the show

In this episode we answer emails from Damon, Pete and Jeff.  We discuss the benefits of aggregating assets and portfolios as a couple, basic tax location ideas, children with gambling problems and fun games to play with them, and resources for researching leveraged, diversified portfolios (e.g., "Return Stacking").

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Leveraged ETFs Article:  Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs (ddnum.com)

Ben Felix Video On Leverage:  Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)

Return Stacked Article:  Capital Market Assumptions when Return Stacking - Return Stacked® Portfolio Solutions

Return Stacked ETFs:  Home - Return Stacked ETF (returnstackedetfs.com)

Ray Dalio Video on Holy Grail Principle:  Ray Dalio breaks down his "Holy Grail" (youtube.com)

Optimized Portfolio Website:  Optimized Portfolio - Investing and Personal Finance

Portfolio Visualizer Backtester:  Backtest Portfolio Asset Allocation  (portfoliovisualizer.com)

ReSolve Riffs Podcast:  ReSolve Riffs Investment Podcast - ReSolve Asset Management (investresolve.com)

Simplify Assets Podcast:  Keeping it Simple Series with Mike Green & Harley Bassman | Simplify

Flirting With Models Podcast (Corey Hoffstein):  Flirting with Models – The podcast all about quantitative investing

Support the show

In this episode, we reflect on a recent podcast from the Value Stock Geek and embark on a nice little rant about recent mailings I have received from the financial services industry.

Link:

Security Analysis Podcast from the Value Stock Geek:  The Security Analysis Podcast | Value Stock Geek | Substack

Support the show