Mostly Voices [0:00]

A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. A different drummer.

Mostly Mary [0:19]

And now, coming to you from dead center on your dial, welcome to Risk Parity Radio, where we explore alternatives and asset allocations for the do-it-yourself investor. Broadcasting to you now from the comfort of his easy chair, here is your host, Frank Vasquez.

Mostly Uncle Frank [0:36]

Thank you, Mary, and welcome to episode 121 of Risk Parity Radio. We are back in the saddle again here at Risk Parity Radio. I know it's been a while, but we're here and ready to rumble.

Mostly Voices [0:52]

I don't think I miss what you think I miss.

Mostly Uncle Frank [0:55]

Thank you for all the inquiries while we've been gone. It's nice to hear we were missed. Mary and I have been on a month-long road trip vacation. We went to four national parks, assorted other state parks and national monuments, and saw lots of family and friends all the way from Cincinnati to Montana. We even met up with listener Chuck H. Yes. Who took us to lunch, which was delightful. Yeah, baby, yeah. But we are ready to get going here again at a regular pace. Ain't nothing wrong with that. And it is time for our weekly portfolio reviews of the seven sample portfolios that you can find at www.riskparadioradio.com on the portfolios page. But before we get to that, I'm intrigued by this how you say E-mails. And we have a lot of emails piled up here. We'll just get through a few of them today. The first one comes from Julie T. And Julie T. Goes to the front of the line for the emails because she is a patron on Patreon for the show. We few, we happy few. And so if you want to go to the front of the line, you can do that too. Go to the support page at www.riskparadioradio.com and become a patron. All the money raised there is going to a charity which is also described there, the Father McKenna Center.

Mostly Mary [2:43]

But now getting to her email, Julie T writes：hi Frank, Portfolio Charts is an excellent analysis and planning tool that I discovered thanks to your podcast. As I'm on the cusp of retirement, I'm doing budgeting and distribution planning. I know that the retirement spending chart is useful, but I can't get my head around how the floor and ceiling adjustments work and which strategy I would pick and why. Could you walk us through this chart perhaps with some real-world example or rules of thumb for those of us who are finding Tyler's explanations too abstract? Thanks. All right, what Julie T.

Mostly Uncle Frank [3:14]

is referring to is a retirement spending calculator that you can find at Portfolio Charts. And I think what I'd like to do for this is create a YouTube video, which I have not tried yet, but that is my idea, at least in the next month, to walk through some of these calculators on screen and and give people an idea of what they do and what they can do with them. This is an important calculator for retirees because it deals with a problem that is not addressed by ordinary retirement calculators. Ordinary retirement calculators assume that you are going to be taking out of your retirement funds at what is called a constant dollar rate. And that is how the original 4% rule was calculated and other studies that have looked at that have all been calculated based on this constant dollar rate. And what that says is that you look at your portfolio at retirement, you're going to take 4% or 5% or however many percent you're gonna take for the year, and then you are going to increase that by the amount of inflation every year until eternity. That was weird, wild stuff. Now, the problem with that is nobody actually lives that way in retirement. Your withdrawals tend to be variable and most people are in a situation where they don't necessarily have to spend as much money one year as they spent the previous year. Inflation to them may be something different to the inflation of the world at large, especially if you've got a paid off house, you're not paying for education expenses anymore, et cetera, and so forth. So what this calculator does is it allows you to put in a portfolio, say a golden butterfly portfolio or a golden ratio portfolio or anything that you can break down into asset classes because it's using the portfolio charts calculators. And then it will do a simulation using your chosen method of withdrawal to see how often that failed over the past 50 years. And so you can get a really good idea, a much better idea of what it's going to be like living in your situation as opposed to the generic situation that nobody lives in. Now that calculator does go through several popular withdrawal strategies and it shows you how to set it up for the constant dollar strategy we already described. It shows you how to set it up to model a constant percentage strategy, which is simply looking at your portfolio and taking out a percentage, say 4% or 5% or whatever you've chosen every year based on the current valuation of that portfolio. So in that situation, your withdrawals can fluctuate. that is actually a more realistic scenario for somebody to follow. It's what we actually follow with our sample portfolios and you can see the withdrawals there are done on a constant percentage method that is then broken down monthly. The calculator also gives you a few other options that have been written about. One's called the Bengan floor and ceiling, one's called the Clyde 95% rule and one that's called the Kitsis ratchet from Michael Kitsis and shows you how to model those in addition to making other kinds of models where you might take a set percentage, but then if your portfolio falls by a set percentage, you reduce it by something. And so it's very flexible as to what sorts of withdrawal strategies you might apply. I should say it also has something called the Geithner Klinger model, which is another method, and these are all described there in the text with this calculator, so you can take a look at them. But I do agree this is somewhat unfamiliar to people because most people actually don't understand how the 4% rule works in terms of modeling and what the assumptions are with respect to that. I think it was Bill Bengen who said in the original paper that he just used it as a base assumption, but he would assume that in reality people would simply vary their withdrawals year to year based on the size of their portfolio, which makes a whole lot more sense. In reality, I'm not sure it makes a lot of sense to think of just one withdrawal strategy for your entire retirement simply because your conditions may change throughout that period, both in terms of expenses, other income, and other things that may happen in your life. But I do think the constant percentage withdrawal is probably where most people should start because it's easy to understand and it's easy to implement. And you can look at your expenses essentially in two different categories, one being the things you are required to pay, your taxes, any mortgage you still have, your base living expenses, and then other things that you might want to do, travel or improving your house or buying other vehicles are doing other things. And if you do it that way, you'll find that if, say, half of your expenses are the required ones, that's probably only going to be two and a half percent of your portfolio in those circumstances, allowing yourself to take up to, say, four or 5% and then adjust with the expenses if your portfolio declines in value makes the most sense. This pairs well also with these risk parity style portfolios where you are talking about a portfolio that is designed to have no more than, say, a 20% drawdown. And if you think about that, a 20% drawdown on a 5% withdrawal rate gets you to a 4% withdrawal rate. But I do realize this can all be very confusing listening to it on a podcast like this without actually looking at the calculator and seeing how it works and seeing the outputs from it. So I will endeavor to create that YouTube video and perhaps there'll be other ones talking about using these calculators. And it's been something that I've toyed with in the back of my mind as a useful adjunct to this podcast. So hopefully I'll be able to get that done in the next month here or so. That would be great. Okay. If anybody knows what's the easiest way to capture a screen for a YouTube video, I'm sure I can check other programs out, but if you have a preferred one that you'd like to share, let me know what it is. And thank you for that email. Second off.

Mostly Voices [10:27]

And our next email comes from Pat.

Mostly Uncle Frank [10:31]

And Pat writes：hi Frank,

Mostly Mary [10:35]

thank you for answering my question about individual stocks. I will definitely follow your recommendations. I have another question in relation to holding leverage ETFs like the aggressive 50/50 in a taxable account. Do you hold this portfolio in a taxable account or a tax sheltered account? What are the risks of holding this type of ETF in a taxable account and how does it affect your taxation? For a young person who has a long horizon before retirement, which of the leveraged model portfolios would you recommend in the accumulation stage? Thanks for all that you do, Pat.

Mostly Uncle Frank [11:17]

Well, I think if you're going to use one of those leveraged portfolios, the preferred place to put it would be in a Roth IRA, because generally those portfolios do better with more rebalancing using them on rebalancing bands. And if you're rebalancing a portfolio in a taxable account, you could have taxable events. If you're doing it in a Roth IRA, you're not going to have those things. The reason I say Roth and not traditional is that typically your Roth IRA has your most risky portfolio or most risky assets in it. with the idea that it is probably going to be the last thing that you access. The reason you want it to be the last thing you access and be the most risky is hopefully it will grow the most over time. And since it's not taxable anymore, you already paid the tax on it when you made the contribution to it, the more growth you can get in there, the better off it is. And so that's where you would want to take the leverage if you can do that. There are some exceptions and additions to these general notions that I just described, particularly with respect to that levered bond fund, TMF. That can also be useful in a taxable account for a couple of reasons. First of all, it pays hardly any income off of it, so it's not generating a lot of taxable income, if any at all. And the situation many people find themselves in as they get close to retirement is they need to make some adjustments in their portfolio but they don't want to be selling a whole lot of taxable stocks that have appreciated a lot in their taxable account, and they're trying to add some bonds to that. So as a stop gap, often what you can do is buy the TMF instead of the TLT in there, because it's three times as potent, if you will. And so that gives you a way of shifting to a risk parity style portfolio without having to sell a whole pile of stocks and buy a whole pile of TLT or another bond fund like VGIT. But that is more dealing with a specific transition or tax issue that many people have if they have large taxable accounts that they are trying to transition. The other useful thing that can happen with respect to the leveraged funds in a taxable account is actually tax loss harvesting. That in bad years they will show very bad performance will have lots of losses and then you can sell them and tax loss harvest those. Of course, that also depends on what your overall income is and your long-term capital gains tax rate in particular. So those are a couple other uses that you can make of these leveraged funds in small quantities in taxable accounts for transition purposes. As to what I would recommend. I'm not sure I would recommend any of these leveraged portfolios. And the reason I say that is because the leveraged funds have just not been around that long, only since about 2009 for UPRO and TMF and an even shorter time for NTSX. Also, UPRO and TMF are designed for short-term holdings. So when I say those are experimental portfolios, they are indeed experimental portfolios. And you wouldn't want to bet the farm on them. But people have had success with them. You have a gambling problem. So that is why we are running this experiment. Because in theory it should work out quite well. Well, you have a gambling problem. In practice, we don't know what the ultimate outcomes of those things are going to be under various circumstances. I think you are probably safer and better off using something like the leveraged golden ratio portfolio, which has more of its leverage in the fund NTSX. The reason I say that is NTSX is actually designed as a leveraged long-term holding. So it is designed to be held for long periods of time, unlike the TMF or TNA or UPRO. If you're looking for another variation of a leveraged portfolio that is similar to the Accelerated Permanent Portfolio or aggressive 5050 portfolios. I also put together an experimental portfolio for the Choose FI website and I'll link to this in the show notes. That one is sort of a combination of the two sample portfolios. So it ends up having 26% UPRO and a 26% TMF. Those are the leveraged stock and bond funds. And then on the other side is the ballast. We have 12% in VIoV or a small cap value fund, 12% in VGIT, an intermediate treasury bond fund, 12% in gold, GLDM or similar, and then 12% in preferred shares PFF. And that one is all set up at M1 Finance because that's what they're doing with their M1 Choose FI experiment over there. There are many other portfolios that you can look at. If you are an M1 user, that might be of some interest to you as well.

Mostly Voices [16:40]

I think I've improved on your methods a bit too.

Mostly Uncle Frank [16:45]

Again, I think these are very useful exercises and this manner of using leverage in a risk parity style portfolio is the original idea that the hedge funds had. They typically employed it simply by borrowing money to do it. as opposed to using a leveraged fund or options or futures. I think that's going to get more sophisticated and more well defined as we go forward over the next decade or so. Well, thank you for that email. And our next email comes from Craig D. And Craig D. Writes. Hi Frank, first off. First off.

Mostly Mary [17:23]

If there is a more enjoyable way to learn about investment strategy than listening to your podcast, I haven't found it.

Mostly Voices [17:32]

You are talking about the nonsensical ravings of a lunatic mind.

Mostly Mary [17:36]

Thanks for providing us with real entertainment value along with excellent information. Forget about it. Second off. Second off. I'm very interested in the leveraged golden ratio portfolio. Groovy, baby. As a client of M1 Finance, I have researched the availability of those funds through that platform. I have found that the funds BITQ and BITW are not available through M1. Can you suggest similar alternate investments that could be purchased through M1? What about BLOK or others, for example? Thanks for all your great help.

Mostly Uncle Frank [18:17]

Well, first off, I am glad you find this entertaining.

Mostly Voices [18:21]

Bow to your sensei. Bow to your sensei.

Mostly Uncle Frank [18:25]

One of my Personal goals in life is to laugh at least once per day, and I get bonus points if I make other people laugh. So I think I've been getting lots of bonus points through the mechanism of this podcast. You are correct, sir! Yes!

Mostly Voices [18:41]

As to your second question.

Mostly Uncle Frank [18:44]

Second off. Could you use B-L-O-K or others? Yeah, I think you probably could use B-L-O-K. if you compare BLOK to BITQ and BITW, what you'll find is that BLOK looks mostly like BITQ. They have most of the same kinds of cryptocurrency related companies in them. But BLOK also holds GBTC, which is purely Bitcoin itself. And BITQ does not do that. So that is the part that would be BITW. BITW holds about 10 different cryptocurrencies. Which is huge. It is interesting, you know, as we speak there is another crypto ETF that's going to go out, I think next week, that's going to be based on cryptocurrency futures. I have no idea how that's going to work out. I did find a Kiplinger article that I'll link to in the show notes that lists 11 current crypto funds. Most of them are very new. They're just started this year or last year. There are more to come, I expect. But I think what you really want to do with all of these things is go look inside and see what's in there, whether it's going to be companies or cryptocurrencies themselves, because that is essentially what you are investing in. Am I right or am I right or am I right? Right, right, right.

Mostly Voices [20:15]

you need to know what's the guts of something and if the guts of one

Mostly Uncle Frank [20:19]

thing is similar to the guts of another thing, they're probably going to perform pretty similarly and then it's just a question of looking at management and fees, etc. I would think within another couple of years here we're going to have even better options than the 11 ones that are currently out there or the one that's coming out next week. You need somebody watching your back at all times.

Mostly Voices [20:41]

And thank you for that email. Forget about it.

Mostly Mary [20:45]

Our next email comes from Christopher and Christopher writes. Hi Frank, I am really enjoying the podcast, both in the way you present it with all the drops and sound effects and the topics discussed. Yeah, baby, yeah. The majority of personal finance podcast and resources discuss the accumulation phase but not many focus on decumulation. As one of the few that discuss decumulation, it seems that the only two options ever given are using the 4% rule and/or the bucket strategy. I am personally starting to look into decumulation, so I appreciate your presentation of another option. Before making any big decisions in my life, especially when it comes to finances, I like to research as much as possible on the topic in question. While I appreciate the way you have been presenting the topic of risk parity on the podcast, I would also like to look into other resources to enhance my knowledge. Can you recommend any good resources for learning about risk parity, whether these are podcasts, books, websites, etc.? Also, can you explain specifically how you learned about risk parity and what resources you used? Thanks, Chris.

Mostly Uncle Frank [22:03]

So as to the first part of your email, yes, there are many different strategies for withdrawing in a decumulation phase. And I think it can be tailored to particular individuals because the thing you control, remember, is your expenses. You're not going to control your returns in any one year, but if you can vary expenses that is often the way to go and combine that with a reasonable withdrawal strategy that allows you to take up to a certain amount in the years you need more and take less when you need less. This does go back to that calculator that we were discussing with Julie T at the beginning and we have linked to in the show notes for this episode that I think is kind of the place to start if you're thinking about, well, I'm going to hold this portfolio and now I'm going to withdraw on it at either a certain rate and implement some other rules. If it goes up a lot or it goes down a lot, which you can see all that there. As to the second part of your question, the way I learned about risk parity was after the great financial crisis of 2008 and I was Not pleased with the recommendations I had been following, which told me to hold TIPS in a crisis like that, which were clearly the wrong kinds of bonds to be holding, and that I should have been holding Treasury bonds, because those actually went up during the crisis as opposed to going down like the TIPS. So I began my research in looking for a forever kind of portfolio, a portfolio that would last forever. I've described a lot of this in earlier episodes, particularly if you go back to episodes three and five. But the path I took was first looking at what people had already done. I ran across Harry Brown's permanent portfolio from the 70s and 80s. And then I ran across the theory from Ray Dalio in Bridgewater and actually found some of their papers on what was an extremely primitive website they had in 2010 that no longer exists, although the papers are still there. And I read those papers and then read some other papers by other hedge fund and fund operators like AQR and then began to try to figure out what best combination would be from that because Harry Brown's attempt at this was very primitive. It was just like, take 25% gold, 25% stocks, 25% long bonds and 25% short bonds. With no sort of theory or back testing or rhyme or reason to it, Bridgewater added a whole theory behind that as to the kinds of environments you might find yourself in and what kinds of investments do well in those environments. But where things actually began to take off, for me at least, was when we started getting these sophisticated calculators online, like Portfolio Charts and Portfolio Visualizer, we're talking about around 2015, and then it became actually possible to model different kinds of these portfolios. And then as we saw more ETFs come online with more asset choices that made it even easier and more efficient and possible to construct the kinds of portfolios that you now see as sample portfolios on the Risk Parity Radio website. I tend to approach these sorts of things as an engineer would, wanting to know how something works, and then not only that, but why it works, and then where are the margins of safety. But now for some recommended reading. Well, if you go back to episode five, you look in the show notes there, you'll find some links. In particular, ones to a chapter from the CFA Institute manual on investing essentially. And the chapter is called Risk Parity, Silver Bullet or a Bridge Too Far. And you can read that chapter and it gives you kind of the whole history and theory behind risk parity style portfolios. There is also a link to the original Bridgewater paper, another good place to look, well I should say, look at the links in episode 7 as well. Look at the links in episode 53 regarding what's called the Dragon Portfolio, which is also built on risk parity style principles. And then I will also link to a website AQR, which is another one of these investment hedge fund shops that has done a lot of work in the risk parity area. I'll link to a particular article called Understanding Risk Parity from 2010, but there are many other articles on that website. And so that's definitely something you'll want to check out. You'll find that with the exception of things like that CFA Institute manual, most of the papers are written by actual investors, their white papers written about their funds for their particular customers. I should say you should also look on the Bridgewater site itself, although the new version of it for me It feels very difficult to navigate, but you definitely want to take a look at what they've got there. Finally, and I should warn you that a lot of what you see written about risk parity style investing is kind of superficial and does not actually get at the theory behind it. That's not how it works.

Mostly Voices [27:53]

That's not how any of this works.

Mostly Uncle Frank [27:56]

So if you look at something like the Tony Robbins book, Mastering the Game where he interviewed Ray Dalio and came up with the all-weather portfolio. That's the first sample portfolio. Many people think that that is the risk parity style portfolio because of the publicity surrounding it. That is actually not even a very good representation of what you would want to do with this style of investing. So be wary of any article or source you read which claims or assumes that a risk parity style portfolio is one portfolio. It's not one portfolio. It's a methodology for investing. Following what is called the Holy Grail principle, you'll find a nice YouTube video about that, I believe, in episodes five or seven shownotes where Ray Dalio explains it on a whiteboard in just a few minutes. Thank you for that email because I'm sure there are many others who are interested in the same sorts of things. And our final email today comes from Matt H. Last off.

Mostly Mary [29:13]

And Matt H writes, Thanks for such a wonderful podcast. I am learning a lot and being entertained because you amuse me. Funny, like I'm a clown, I amuse you. My email is about asset location, which is not something I think you have discussed much, but is hopefully close enough to the main focus of your podcast. Many emails have been about shifting to a withdrawal portfolio with large taxable accounts. I hear it's good to have three buckets, tax deferred, Roth, and taxable. Often I get that bad feeling like I'm about to be sold something expensive to mitigate taxes, which is the exact thing which could have often easily been avoided for free. I question why not have all your money in tax advantaged accounts? Specifically, I can potentially put $58,000 in a mega Roth 401k and $12,000 in two Roth IRAs, which is more than I can save. Roth contributions can be withdrawn immediately and Roth conversions after four to five years. So I think in practice that provides plenty of liquidity. With everything in tax-advantaged accounts, I save on taxes, have great asset protection, and can shift my allocation without fear of capital gains. Should taxable investments be made if there is still tax-advantaged space left? Thanks.

Mostly Uncle Frank [30:34]

Well, I'm glad I amuse you. One would think that I'm a clown.

Mostly Voices [30:39]

You can't handle the truth.

Mostly Uncle Frank [30:42]

Or perhaps a little bit deranged.

Mostly Voices [30:46]

I told you, Charlie, I got an angle.

Mostly Uncle Frank [30:50]

As to your question, yes, generally, if you can get money into a Roth IRA, that is the best thing to be holding your assets in long term, particularly if you can make sure that you have control over what you're allowed to invest in. You are correct, sir, yes.

Mostly Voices [31:09]

Some of the Roth 401ks are still limited in their investments,

Mostly Uncle Frank [31:13]

and so you are going to want to roll that out into a Roth IRA if you don't have those investment choices right there in your Roth 401k. You're also going to want to do it for another reason because Roth 401ks are subject to required minimum distributions unlike Roth IRAs, which I know makes no sense, but that's the way it's set up these days. Most people cannot put enough money into a Roth IRA or they are limited by that because Roth 401 s have not been around that long. The traditional IRA is great up front for the tax savings, particularly if you're in a high income tax bracket or you're not allowed to invest in Roth IRAs because you make too much money. But when you get to retirement, it's the least favored form of holding something because while you don't have to deal with taxes on the transactions in it every time you take something out, it is taxed as ordinary income. Ideally then you wait until your income is a lot lower and then roll that money over into a Roth vehicle, which then you won't have any problems with when it comes time for required minimum distributions. All that being said, you don't need any of those Roth IRAs, 401ks to actually invest and do well and be able to manage your money. Those are just extra added bonuses. Yes, you fill them up before you go to a taxable account. A taxable account, if it's managed properly, is generally barely taxed. because you were not taxed on the growth in there. You were only taxed on the withdrawals and any income you draw off of that. Now mistakes that somebody could make would be to invest in things that are throwing off lots of income and then you may have a tax problem. And I'm thinking particularly of dividend stocks, REITs, and some of these buy right option sorts of things, which you probably don't want to hold anyway. But if you are not making a lot of transactions in those accounts, your taxes are going to be low. Also recall that your long-term capital gains tax in a taxable account could be 0% if you're in a lower income bracket. It's likely to be 15% for almost everybody and could be 20% if you're making over half a million dollars of income that year. So that is not a very high tax rate, particularly since it's not coming out every year. It's only coming out when you sell something and only on the gains for what you sell. If you have a risk parity style portfolio and a taxable account, chances are you'll also be able to do some tax loss harvesting in any given year because some of your assets will go down while the other ones are going up. That's the way these portfolios typically work. and I should say if you have a very large taxable account, then there is the possibility of simply borrowing money against it as opposed to doing any transactions with it at all. And the way you would do that is you go to a place like Interactive Brokers, which is currently charging a 1% or less margin rate on larger accounts. Put all your stuff there, leave it alone when you actually want money from it. You just borrow against it. That is actually how people like Jeff Bezos borrow against their Amazon stock and things like that. But mere mortals can also do things like that with a taxable account. And finally, the other obvious advantage you have with a taxable account is you're not subject to any of these rules about being 59 and a half or what part of the assets you can remove. I know you can remove contributions in a Roth, but not in a traditional or set up something like 72t to get your money out of there earlier if you want to. All of those are considerations that you need to deal with. They're not insurmountable problems, but you don't have any of those issues with a straight taxable account. But thank you for that email. And that does conclude the emails for today.

Mostly Voices [35:40]

Shut up, Charlie. I got an angle.

Mostly Uncle Frank [35:44]

And now for something completely different. And that's something completely different is our weekly portfolio reviews of the seven sample portfolios that you can find at the website www.riskparityradio.com on the portfolios page. Now it's interesting we haven't done this actually for a month, although I have been updating on the website every week so you could see the price action, if you will, over the past month. Where we came out, if I compared the totals in the accounts or the portfolios now, they are almost the same place they were a month ago in most circumstances, even though there's been a lot of volatility in the markets over that time. It's always funny we have this annual dust-up in Congress over raising the debt ceiling. That always reminds me of that scene in Blazing Saddles where Cleavon Little is the sheriff and he holds himself hostage to get out of a situation and all of the townspeople believe him that he's going to shoot himself in the head. Unfortunately, that's not something I can take sound clips from, at least not on a family show. But you get the picture. And so what you often see during that week of wrangling is both stocks and bonds go down like they did this time and everybody runs off and buys some gold for a little while. I love gold! And gold did go up during that. And then the problem goes away and everybody forgets about it for another six months or a year or however long they need for that.

Mostly Voices [37:28]

But, you see, this is why. This is why we can't have nice things.

Mostly Uncle Frank [37:35]

Now, last week we did have some nice things. All the markets were going back up since everything went down a few weeks ago. This was one of those unusual weeks where just about everything that you could buy went up in value. That doesn't happen very often, but it does happen. So just looking at the markets, we saw the S&P 500 up 1.82%, NASDAQ was up 2.18%, gold was up 0.62%, TLT, the long-term treasury bonds were up 2.26% last week. REITs represented by REET were up 3.79% for the week. That's the best performer out of the commonly held asset classes in our portfolio. Commodities were up again. They seem to go up just about every week these days, and they were up 3.15% for the week. PFF, the preferred shares fund, was up 1.3% for the week. And now going through the sample portfolios, we'll start with the All Seasons, our most conservative sample portfolio. This one is only 30% in stocks of ETI. It's got 55% in long and intermediate treasury bonds, and it's got 7.5% in gold, GLDM, and 7.5% in that commodities fund, PBDC. And it's loving that commodities fund these days because it's up over 60% in the past year. But that is an example of the kind of thing that you want to hold in case we have an inflationary environment like we've been having. and it performs as you would expect. So this portfolio was up 1.72% for the week. It is up 10.57% since inception in July 2020. The next portfolio or these next three are kind of our bread and butter portfolios. This is the golden butterfly. This one is 20% in Vti, the total stock market fund, 20% in VIOV, small cap value fund, then it's got 20% in long-term treasuries, TLT, 20% in short-term treasuries, SHY, and 20% in gold, GLDM. It was up 0.96% for the week, and it is up 20.73% since inception in July 2020. Moving to the next portfolio, our Golden Ratio Portfolio. This one is 42% in stocks. It's got 20%, I'm sorry, 26% in the long-term Treasuries, TLT, 16% in gold, GLDM, and 10% in REITs, R-E-E-T. So it was the big winner this past week. And this one was up 1.68% for the week. It is up 20.99% since inception in July 2020. And now we go to the Risk Parity Ultimate. This is our most complex portfolio. It has 40% in stocks, including 5% in a Chinese A shares fund, KBA, and 5% in a leveraged stock fund, UPRO. It's got 20% in long-term treasury bonds, 15% of that is TLT and 5% is TMF. Then it's also got 15% in gold, GLDM, 10% in preferred shares, PFF, 5% in REITs, R-E-E-T, 5% in commodities. We're using C-O-M for that fund here. And then with the remaining 5%, we've got 3% of that in a volatility fund, VIXY, and 2% in cryptocurrency related funds, BITQ and BITW. This one was up 1.74% for the week. It is up 21.22% since inception last July, July 2020. It's interesting that all three of these kind of bread and butter portfolios are performing very similarly. and you can see the golden butterfly is the most conservative of those, and so it's up slightly less than the other two, and the Risk Parity Ultimate is the most aggressive and it's up slightly more than the other two. Now, moving to those experimental portfolios that we've all come to know and love.

Mostly Voices [42:10]

Tony Stark was able to build this in a cave with a box of scraps.

Mostly Uncle Frank [42:14]

These have been highly volatile these past several weeks. Going up or down sometimes three or 4% at a time, like they are doing this week again. The accelerated permanent portfolio is 27.5% in long-term Treasuries, a leveraged fund, TMF, 25% in UPRO, a leveraged S&P 500 fund, 25% in PFF, a preferred shares fund, and 22.5% in gold, GLDM. It was up 3.58% for the week. It is up 21.65% since inception in July 2020. And then our most volatile fund portfolio, I should say, the aggressive 5050. This one is 33% in the Leverage Stock Fund, UPRO, 33% in the Leverage Bond Fund, TMF, 17% in PFF, the Preferred Shares Fund, and 17% in VGIT, an intermediate treasury bond fund. It was up 4.35% for the week, the big winner. It is up 28% since inception in July 2020. And our remaining fund is the leveraged golden ratio portfolio. This is our newest one. We just started this in July of this year. It has 35% in NTSX, that is a leveraged stock and bond mixed fund, S&P 500 in Treasuries, it has 25% in gold GLDM, 15% in the REIT O that we are using for this, then it's got 10% in each of TMF, that's the leveraged Treasury Bond Fund and TNA, a leveraged small cap fund, and then with the remaining 5% we put three of that in a volatility fund, VIxM, and 2% in cryptocurrency related funds, BITQ and BITW. This one was up 2.65% for the week. It is up 1.8% since inception on July 2021. And that concludes our review for the week. If you also want to take a look at the monthly reviews, those are also at the website www.riskparityradio.com on the portfolios page. At the top you'll see the monthly returns for each of the portfolios going back to their inceptions. Just one other investing note. We had discussed an investment in I bonds back in Episode 93 as a nice place to put some of your cash equivalents. And they are benefiting now from the new inflation figures that are out. So they will be returning over 7% for the next six months. If you want to get in on that, you have to buy those directly from the government at treasury.gov. And you are limited to $10,000 per person. But that might be something you want to put some of your emergency or other cash equivalent type money into if you have not done so already. But now I see our signal is beginning to fade. We are a bit backed up on emails now and so I will be hacking away at them again this week. So you can look forward to that. Bow to your sensei! I also will try to work on that YouTube instruction video I have now promised, which may means it gets done as opposed to not being promised and not getting done. I also will have an interesting sidelight, another charitable venture going on here where I'm creating some NFTs of the Risk Parity trademarked logo and throwing them out there for consumption with the proceeds going again to charity. That will probably be rolled out next month, I think. If you have comments or questions for me, please send them to frank@riskparityradio.com that email is frank@riskparityradio. com or you can go to the portfolios, I'm sorry, go to the Go to the website www.riskparityradio.com and fill out the contact form there and I'll get your message that way. If you haven't had a chance to do it, please go to where you subscribe to this podcast and like it, give it some stars, rate a review, and that would be greatly appreciated. That would be great. Thank you once again for tuning in. This is Frank Vasquez with Risk Parity Radio. Signing off.

Mostly Mary [47:21]

The Risk Parity Radio Show is hosted by Frank Vasquez. The content provided is for entertainment and informational purposes only and does not constitute financial, investment, tax, or legal advice. Please consult with your own advisors before taking any actions based on any information you have heard here making sure to take into account your own personal circumstances.