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 [0:37]

Thank you, Mary, and welcome to Risk Parity Radio. If you are new here and wonder what we are talking about, you may wish to go back and listen to some of the first episodes where we did our introductions of the various topics. And those episodes are episode 1-3, five, seven and nine. And so if you go back and listen to those, it will get you up to speed. But now on to episode 140. Today on Risk Parity Radio, it's time for our annual holiday special.

Mostly Voices [1:13]

The Inquisition. Want to show the Inquisition? Here we go. Just kidding, folks.

Mostly Uncle Frank [1:20]

No one can stop me. What we will actually be doing today is our weekly and monthly portfolio reviews of the seven sample portfolios that you can find at the website www.riskparityradio.com on the portfolios page. And we'll add a little annual flavor into it, although I'm going to delay the annual review until next week after I get some more annual returns from some other risk parity funds out there. The professionals, so we can see how we stacked up against them.

Mostly Voices [1:54]

But before that, I'm intrigued by this, how you say, emails.

Mostly Uncle Frank [2:01]

And first off, first off, we have an email from Krista. And Krista writes, hi, Frank.

Mostly Mary [2:06]

I came across your episode 118 about the SWAN ETF. In it, you create a synthetic swan to extrapolate outside the short history of the swan ETF itself. You used the 70/90 reference from Amplify themselves and then modeled that in Portfolio Visualizer using 70% SPY, -60% CASHX, 90% VBIX. However, comparing your synthetic swan with swan itself over the duration of swan doesn't really resemble swan in any aspects. I played around in Portfolio Visualizer and a much more accurate synthetic model for swan is 33% SPY, -66% CASHX, and 133% VBIX. It matches better on all factors that Portfolio Visualizer displays and matches the swan numbers really well except for the worst year. I always wanted to have a decent synthetic model for swan, and I didn't know you could use negative CASHX in Portfolio Visualizer to model leverage. So that was the largest takeaway from your show. Hope this more accurate model for swan is relevant for you. Thanks, Kristor.

Mostly Uncle Frank [3:30]

Well, Kristor, I agree with you that the swan ETF does not perform as advertised. Forget about it. And we discussed this also in episode 123, which you may want to go back and listen to. But I took your adjustment to the portfolio as well as the one I came up with in episode 123. And yours has the 33% SPY, 133% Vanguard Intermediate Term Bond Index, and -66% cash. the one I came up with is 45% SPY, 80% Vanguard Intermediate Term Bond Index Fund, and -25% in cash. And I ran them all at Portfolio Visualizer with the Swan ETF, and you can see how they came out. I think mine is a little bit closer, but yours has some features that are more identical in terms of movement. But I'll put that in the show notes and you can have a look at it. Ultimately what this tells me is that this may not be the best ETF to design a portfolio around if it does not appear to be behaving as advertised because that's reflective of some management issues there. And this is also why I think some of these composite ETFs that are combined stocks and bonds or combined stocks and options or some other combination of are just a little bit more difficult to deal with in terms of portfolio construction. The easiest thing and most reliable thing to deal with in portfolio construction is an ETF that is exactly what it is and does not have more than one thing in it. And those are our preference for working with these things. And so when we see one of these composite ones, we want to let it run for a few years and then check it to see whether it's really performing as it's advertised to perform. I don't think we had this trouble with the other one that we've used and talked about, NTSX, which is also a stock bond mixture, but in a different way from the SWAN ETF. But my reaction to it is you probably don't want to use SWAN to build a portfolio around because it's not performing as advertised. And so you might end up with some unpleasant surprises with respect to that portfolio that used SWAN if you were thinking it was something different than it was.

Mostly Voices [5:56]

I don't think it means what you think it means.

Mostly Uncle Frank [5:59]

But thank you for that email. Second off.

Mostly Mary [6:07]

Second off, we have an email from Craig, and Craig writes, Dear Frank, thank you for the mighty fine and mightily needed work you are doing. Like so many others, I follow your excellent work on Risk Parity Radio, and like the 1849 gold miners, I pan for golden nuggets. I love gold in each broadcast. It's gold, Jerry. Gold. I'm trying to evaluate and compare the relationship between portfolio returns by using CAGR and maximum drawdowns. The question is, what drawdown risk is encountered while in pursuit of higher returns? I came across an article from Enlightened Stock Trading, which offers the calculation MAR ratio equals annual growth CAGR percentage divided by maximum drawdown percentage. The article suggests that generally, a higher comparative MAR ratio target is preferable. Granted, this article has to do with stock trading, but would this calculation also be helpful in comparing more diversified portfolios? For example, a portfolio consisting of 100% VWENX has an MAR ratio of 0.27, compared with the GOLDEN ratio, which has a 1. 01 MAR ratio. In this case, the Golden Ratio would be the clear winner. I'd love to hear your thoughts on using the MAR ratio as another tool when comparing the performance of various risk parity style portfolios. Craig. Addendum. In today's previous message to you, I forgot to restrict the comparisons of Golden Ratio and VWENX to the same period of time for an accurate comparison. In this case, I am comparing January 2015 to November 2021. For this period, Golden Ratio posts an MAR ratio of 1.01, while VWENX has an MAR ratio of 0.70 over the same period, making Golden Ratio still the clear winner. What are your thoughts, Frank? Craig.

Mostly Voices [8:06]

You are correct, sir, yes. Well, I did read the article.

Mostly Uncle Frank [8:10]

I will link to it in the show notes. And I am familiar with this metric MAR. which is the compounded annual growth rate divided by the maximum drawdown. And yes, this is a useful metric. It is most similar to the Sortino ratio. The Sortino ratio is like the Sharpe ratio, which is measuring risk or reward based on standard deviation, but the Sortino ratio only looks at the downside. So in that respect, it's similar to the MAR ratio. Interestingly enough, on Portfolio Visualizer, if you run your back tests through there and then go to the metrics page. You'll see something called Kalmar, C-A-L-M-A-R, and Kalmar is the MAR ratio for the last three years. And I think the reason Kalmar is popular is because it's got a defined time frame and it's useful for people who are actually trading short term or relatively short term. But if you look at those Kalmar ratios when you stick in your risk parity style portfolios, you'll see that They tend to have higher Kalmar ratios. There's also something in there called the trainer percentage, which is another one of these kind of metrics, measuring risk reward and focusing on the drawdown aspect of it. And you'll also see that risk parity portfolios tend to have a higher trainer percentage. But all of those are in that metrics tab in Portfolio Visualizer right under the Sharpened Sortino ratios. And so you'll want to have a look at those. Yes! I did go ahead and run a golden ratio portfolio that looks like our sample portfolio against the Vanguard Wellesley Fund, which used to be like a 60/40 fund, but is now more like a 70/30 fund if you look at it inside of it. But just to see how these ratios played out from Portfolio Visualizer, and you see that the Sharpe ratios are almost the same, the Vanguard Wellington. If I said Wellesley that was inaccurate. The Vanguard Wellington Fund has a sharp ratio of 1.01 versus the sample golden ratio portfolio of 1.02. But then when you look at the Sortino ratio you see a bigger difference. The Vanguard Wellington at 1.62, the sample golden ratio at 1.79. It becomes even bigger when you look at the trainer ratio, the percentage. That's 15.57 for The Vanguard Wellington, it's 20.11 for the sample golden ratio. And then that Calmar ratio, the three-year MAR, is 1.23 for the Vanguard Wellington and 1.86 for the sample golden ratio. So no matter how you slice it or whichever one you use, you see that you're getting a better risk reward, particularly on the downside from one of these risk parity style portfolios than you are from a traditional portfolio. Yeah, baby, yeah! But thank you for calling our attention to this metric because it is just another way of measuring what we want here, which is a portfolio that withstands drawdowns. Whether you're taking them out as distributions or it's just losing money for some period of time.

Mostly Voices [11:24]

You need somebody watching your back at all times. Last off.

Mostly Uncle Frank [11:29]

Last off, we have an email from Scott, and Scott writes：hi Frank, thanks for all you've done so far, Ooga Ooga.

Mostly Mary [11:37]

Sorry, I don't know how to embed awesome sound effects here. What am I a doctor or a moon shuttle conductor?

Mostly Voices [11:45]

My wife and I are both 42 in the accumulation phase

Mostly Mary [11:49]

and in theory, roughly five years from comfortably financially independent, though we will probably continue working until at least early 50s when we hope and pray that our daughter will spend a gap year before college traveling the world with us. We recently came into extra money, a little over a year's worth of living expenses, or a very nice down payment on a property. We decided to put the recent windfall into a golden butterfly portfolio for one to three years while looking for the perfect vacation property. In episode 14, you mentioned that a 1% increase in interest rates could result in a 20 or so percent decrease in the value of TLT. The Fed is planning to increase the prime rate to 2.25% or so over the next three years. Here's the $64,000 question. Doesn't it seem like a terrible idea to put 20% into TLT right now when the Fed, not a crystal ball, has forecast a schedule of rate increases? Thanks again. For entirely selfish reasons, I very much hope you keep up the part-time gig until I'm well into retirement. Scott.

Mostly Uncle Frank [12:59]

All right, your $64,000 question. Doesn't it seem like a terrible idea to put 20% into TLT, quote, right now, unquote, when the Fed, not a crystal ball, has forecast a schedule of rate increases?

Mostly Voices [13:12]

Mr. Scott, 20 seconds to detonation. Well, the short answer is no.

Mostly Uncle Frank [13:19]

You can't handle the crystal ball. And for primarily two reasons. First off, what the Fed is doing or said it's gonna do is known by you, me, and the entire gym state. And everybody else in the entire whole world. And that means it's already priced into the market. The market already knows this information and has priced it in. Am I right or am I right or am I right? the market does not wait. until an event actually occurs before reacting to it, it prices all these things in as they become known. Second off. The second reason is more fundamental as to the substance of this idea. And the idea or narrative that you are incorporating here is that the Fed has control over long-term interest rates by raising its rates up and down. You could ask yourself a question. Is that true or not? Has that exhibited itself in the past? And if you look at the data, you'll find the answer is no. That's not how it works.

Mostly Voices [14:30]

That's not how any of this works.

Mostly Uncle Frank [14:34]

What the Fed does impacts the short end of the curve, the two-year treasuries, the shorter treasuries, the T-bills and things like that. But the Fed does not control what goes on on the long end of the yield curve. Surely you can't be serious. I am serious. And don't call me Shirley. Now, people like to talk about that and repeat this narrative over and over again. Bueller.

Mostly Voices [14:59]

Bueller. Bueller.

Mostly Uncle Frank [15:04]

Bueller. But because you hear a narrative repeated over and over again doesn't make it anymore true. You still have to actually look at the data of how things have worked to assess whether something's true or not. And that theory, that model, that narrative has proven to be false over and over again. Wrong! Wrong!

Mostly Voices [15:24]

Wrong! Wrong!

Mostly Uncle Frank [15:28]

So knowing that it's been false over and over again, it would be insane to think you're going to get a different result doing the exact same thing or thinking the exact same thing.

Mostly Voices [15:39]

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

Mostly Uncle Frank [15:43]

The truth is that the market for long-term US Treasury bonds is a global market with so many factors that affect it, especially the demand for Treasuries from outside the United States, from people who need to get dollars to buy things. or have lots of problems like Turkey and their currency right now, that pretty much nobody has a good model for determining what long-term treasury bond rates are going to be in the future. Forget about it. And so what happens is people glom onto things like what the Fed is doing because they can identify it. The problem here is what we call the unknown unknowns. Real wrath of God type stuff. If you don't know what is affecting the long-term treasury bond rate and you don't have a way of measuring it, you don't have a way of measuring the true demand for long-term treasury bonds worldwide, then it is a fundamental cognitive error to only focus on the things you can measure and ignore the things that you can't measure. And that's why we see people making this thought or prediction and being wrong all the time. Right? Wrong. We'd be better off just admitting we don't know and can't know. You can't handle the crystal ball. Because in fact, that rate, the long-term treasury bond rate, is actually more predictive of what's going to happen in other markets in the future than any one factor that you can point to is going to be predictive of what long-term treasury rates are going to be in the future. Now, if you ask somebody, What have interest rates been doing in the past year? Most people would erroneously say they've been going up. Wrong! That's because they're not looking at the data. They're thinking of some narrative in their head. They're saying, oh, inflation's going up, therefore interest rates must be going up. Isn't that true?

Mostly Voices [17:34]

Wrong!

Mostly Uncle Frank [17:37]

And if we all say that together, won't it be more true? No, it won't, and that's not what happened. Forget about it. What happened was this. If you recall last winter and spring, the economy was reflating or inflating both at the same time, and Treasury bond rates were going up. And everybody and their mother was saying, okay, they're going to the moon now. The 10-year's going to at least 2.5% or three or four or some big number. What happened? What actually happened was they topped out in March. The long-term Treasury bond hit its peak in in March of 2021 and has basically been falling ever since. It's been falling despite all of these reports about inflation. It's been falling despite all of these reports about what the Fed's doing. It's been falling. Why has it been falling? We don't know.

Mostly Voices [18:31]

What do we know? You don't know. I don't know. Nobody knows.

Mostly Uncle Frank [18:36]

But more importantly, it tells you that the people who were saying this, making these predictions last winter based on inflation or Fed action or whatever is going to cause higher long-term interest rates, they were all wrong. Their models don't work. And if their models don't work, didn't work then, why would we continue to use the same model and think we're going to get a more reliable result in the future? That's not how any of this works. The best you could say if they're correct in the future is that they were randomly right. Do I feel lucky? Not that they have any predictive power.

Mostly Voices [19:14]

Do I feel lucky?

Mostly Uncle Frank [19:18]

But foolish consistencies are indeed the hobgoblins of little minds.

Mostly Voices [19:21]

We got a scary one for you this week.

Mostly Uncle Frank [19:26]

Now, as a practical matter, this is how you need to think about these things in a portfolio context. And we're using the golden butterfly here. you are saying, what if the long-term interest rate goes up 1%? What if the long-term interest rate goes up 1%? Okay, why is that happening in your model world? Interest rates don't just go up magically. Long-term interest rates typically go up when there is a consensus in the world, the real market out there, that Inflation is increasing and growth may be increasing as well. And so that is the economic weather we're talking about. Remember in risk parity world, the theory of it is that we basically have four kinds of economic weather. We can have increasing growth and inflation. We can have decreasing growth and inflation. And then we can have two other quadrants where one is going up and the other one's going down. So, if long-term Treasury bond rates are rising, that implies that the weather outside is increasing future inflation and increasing growth as predicted by the market, the real market, not the one on TV.

Mostly Voices [20:47]

Don't be saucy with me, Bernays.

Mostly Uncle Frank [20:50]

All right, now looking at that golden butterfly portfolio. if that is the weather outside, what part of that portfolio is designed to do well in that weather? And the answer is the small cap value part of it. The small cap value part of it does well in increasing inflation environments. So I want you to go back and look at how the small cap value fund in there, VIoV, performed, say, from December of 2020 through March of 2021 and compare that to how TLT performed. And you'll see that the small cap value fund went up much more than the long-term treasury bonds went down. And that is what is likely to occur in your worrisome scenario about long-term treasury bonds. That's what happened in the 1970s. That's what happened last year. That's what usually happens. The pleasures are unlimited.

Mostly Voices [21:48]

So the real purpose of having a risk parity style portfolio is so

Mostly Uncle Frank [21:51]

that we do not have to predict the weather. If you are taking pieces out of it saying, I think this is going to happen, you are in fact making a particular weather forecast.

Mostly Voices [22:03]

My name is Sonia. I'm going to be showing you the crystal ball and how to use it or how I use it.

Mostly Uncle Frank [22:10]

And if you are right, The portfolio will do better than the base portfolio. If you are wrong, you could lose a lot of money. Fire and brimstone coming down from the skies. But you know what the best prediction of what long-term interest rates will be next year at this time? It's exactly what they are right now. And somebody who is not trying to predict the future would always just say, well, here's where we are right now. I have no basis or multiple basis to say that it could go up, it could go down. If you had in fact taken the interest rate from last January and said it's going to be about that next January, you would have been closer than just about anybody because it's not that much different than it was last January. But like I've said in the past, and you may want to go back and listen to episode 67 and 69, which were from March of last year, about this very topic. And what I said there is that the dominant behavior of interest rates in Treasury bond markets is not to go in one direction, not to go up or down. The usual behavior is to go up and down based on economic cycles. So you only really see up and down movements for long periods of time if you look at very long charts. at least 10 years, 20, 30, 40 years, then you can see a trend in markets. But that's not what we're dealing with here when we're dealing with rebalancing portfolios once a year or so. We want to know what it's been doing in the past year or so. But anyway, I hope this answers your question because it gets at some big misconceptions about treasury bonds and the way the world works. based on narratives that you just hear off the TV, off YouTube, or off somebody who is obsessed with some political or economic theory. You generally know when you're dealing with somebody like that. If you listen to them, they'll say a couple of things. One of them is, well, it hasn't happened yet, but in the future, it's gonna happen. It's gonna happen. I just know. Or, well, I would have been right if this central bank or this person or this thing or whatever hadn't done such and such. What you should be thinking when you hear that is, okay, you actually admit you're wrong. You don't want to say it out loud, but you were wrong. Wrong! And you were wrong because whatever you were looking at, your model, did not account for factors that could influence the thing you're trying to predict. 'Cause if you weren't predicting that such and such would do such a thing, that's part of what you need to do if you're gonna be master forecaster.

Mostly Voices [25:01]

You can't handle the crystal ball.

Mostly Uncle Frank [25:05]

We don't live in somebody's little fake world where two or three factors make all the difference and nothing else matters. And if this person is not willing to go back and say, I was wrong, let me go investigate why I was wrong and see if I can do better next time. I never hear them saying things like that. If they're not willing to do that, they're not worth listening to. Just put them in the category of the definition of insanity and let it be. You're a legend in your own mind. And thank you for that email. Now we're going to do something extremely fun. And the extremely fun thing we are about to do is to go over our weekly portfolio reviews of the seven sample portfolios. that you can find at www.riskparityradio.com on the portfolio's page. And since it's the end of the month and the end of the year, we have some embellishments to make and other things to add in and talk about here. But let's just get started here. Looking at the markets last week, we saw the S&P 500 go up 0.85%. The NASDAQ was actually down 0.05%. Gold was up 1.13%. I love gold. Long-term treasury bonds represented by the fund TLT were down 0.15%. REITs represented by the fund REET were the big winner last week. They're up 3.34%. Commodities represented by the fund PBDC were up 0.57% and preferred shares represented by the fund PFF were up 0.9%. Now just stepping back and looking at the bigger picture, this past year, if we look at the whole year, was one of the best years for the stock market in the top 10% in the last 100 years. And there really hasn't been a year like this since the late 1990s. I was listening to or looking at a comparison they said that it's been since 1995 that you had as many new daily all-time highs in the stock market as you had the past year. And so in years like this, risk parity style portfolios tend to underperform standard portfolios. They just do. It is the price of the insurance. The reason risk parity style portfolios outperform traditional portfolios over long periods of time is they do better On the downside, when things are going bad. And this was a year where you saw gold go down a little bit, I think like 3%. Treasury bonds were down 5 to 7%, the long-term ones, but they were more than made up for that by the stock market commodities funds and other things. So just a few annual metrics here. VTSAX was up 25.71%. The S&P was up even a little bit more than that. VTSAX is total stock market fund. If you look at 60/40 portfolios, there were a variety of performances. The Fidelity ones were up about 12%. VBIAAX, which is the Vanguard Balanced Fund, which is a generic 60/40 portfolio, is up 14.22% for the year. And the Vanguard Wellington Fund, which is designed to be more like a 60/40 portfolio, was actually leaning more towards a 70/30, was actually up 19. 12% 2% for the year. The most conservative portfolios, if we look at Vanguard Wellesley VWIA, that was up 8.57% for the year. So let's go into our portfolios. The first one is this All Seasons portfolio that is similar in risk reward character to that Vanguard Wellesley. This one is 30% in stocks, total stock market fund VTI, 55% in treasury bonds, mostly long term and some intermediate term. and it's got 7.5% in gold GLDM and 7.5% in a commodities fund, PBDC. So it was up 0.32% for the week. It is up 12.94% since inception in July 2020. If you just want to talk about 2021, it was up 8.68% for 2021, which is just a little bit more than the Vanguard Wellesley fund. What I thought was interesting about this and getting back to that discussion of the weather, the economic weather out there, I mean, this was a relatively bad year for Treasury bond funds. They were down, but it was a very good year for something like PDPC, that commodities fund that's in there. So even though there's only 7.5% of that fund in this portfolio, that thing was up over 40%. and then had some mammoth distributions at the end of the year. But that essentially saved this portfolio this year and made it into a very good performing portfolio for its risk reward characteristics. And it's a good example of how having very uncorrelated funds in a portfolio yields a steady result. So as far as distributions for January are concerned, we'll be taking $37 out of the All Seasons portfolio. We've taken out $595 total since inception in July 2020. I won't go over all the different funds it's come out of, but you can see that on the website. And now moving to our bread and butter portfolios, and these are more comparable to a 60/40 portfolio. And for reference, that Vanguard Balanced Fund was at 14. 22% for the year last year, and some other 60/40s were less than that, some were more. So looking at the Golden Butterfly, this one is 40% in stocks, divided into a total stock market fund and a small cap value fund. It's got 40% in treasuries, divided into short term and long term, and 20% in gold. It was up 0.57% for the week. It is up 23.41% since inception in July. 2020, it was up 10.63% for the year 2021. So it was a bit of a laggard last year, but it's interesting to compare that to the partial year before from July until December of 2020. It was actually up the most of our baseline risk parity style portfolios. It was up 13% in that period. So over the entire stretch, it's doing just fine. The other thing you'll realize from these portfolios is that because the stock market had such an outsized performance last year, basically, if you know what the percentage of stocks is in a particular portfolio, you can kind of guess pretty quickly as to what its returns were like that year. They dominate everything else for the most part. But anyway, we'll be taking $48 in cash as a distribution for January of 2022, and we've taken out $829 total from this portfolio since inception in July 2020. Going to the golden ratio, our next portfolio, this was up 0.88% last week. It is up 25.68% since inception in July 2020. It was actually up 13.84% for the year of 2021. So it's very comparable to the 60/40. portfolios. We'll be taking $49 as a distribution from cash for it for January of 2020. What's also interesting to note is at the end of 2020, this portfolio was behind the Golden Butterfly, but they've switched positions this year. I'm pretty sure that's because the Golden Butterfly has a larger chunk of small cap value funds in it. This portfolio has some REITs in it that did really well last year. and so that's the baseline difference between the two of them. This one also has a much smaller portion in cash or short-term bonds. This one's only 6% compared to 20% for the Golden Butterfly, which is more conservative. So that's another reason this one did a little better this year. Now moving to our next one, the Risk Parity Ultimate. I won't go through all 14 funds here, but It's essentially around 45% in stock funds, 25 to 30% in long-term treasuries, and it's got some gold, preferred shares, commodities, a little crypto, and a volatility fund in there as well. It was up 0.92% for the week. It was up 24.62% since inception in July 2020, and for the year of 2021, it was up 13.5%. so also right there. And we will be distributing $58 from this from the cash bucket where it's accumulated for January 2022. And we'll have distributed $978 total since inception in July 2020. And now we move to our experimental portfolios. It's a trap. These ones have leveraged funds in them. The first one is the Accelerated Permitted Portfolio. This is 27.5% in TMF, the Long-Term Treasury Bond Fund, 25% in UPRO, a leveraged stock fund, 25% in PFF, Preferred Shares Fund, and 22.5% in GLDM, a gold fund. It was up 0.96% for the week. it is up 30.48% since inception in July 2020 and was up 16.75% for the year of 2021. So did just fine as well. We'll be distributing $79 out of it for the month of January 2022 from UPRO, the leveraged stock fund, and we will have distributed $1,296 total since inception in July 2020. It's coming out at a rate of 8%. I should mention that we are taking out at annualized rates at different rates for these portfolios. The most conservative one, the All Seasons, comes out at a 4% rate. The next two, Golden Butterfly and Golden Ratio, we're distributing at a 5% annualized rate. Risk Parity Ultimate at a 6% annualized rate. And then our two most leveraged portfolios, Accelerated Permanent Portfolio and Aggressive 5050, had an 8% annualized rate and 7% for the levered golden ratio. But moving to the Aggressive 5050, this one is essentially 50% stocks and 50% bonds, but it's leveraged, which makes it an aggressive 5050. So on the stock side, we have 33% in UPRO Leveraged Stock Fund and 17% in PFF. which is a preferred shares fund. And then on the bond side, we have TMF, the leveraged bond fund, long-term treasuries, and VGIT, a intermediate treasury bond fund. So this one was up 0.89% for the week. It is up 38.89% since inception in July 2020, and it was up 24.38% for the year of 2021. so it continues to grow steadily. We will distribute $84 from cash which is accumulated in this portfolio for January 2022, and we'll have distributed $1,330 out of this portfolio since July 2020. It started at 10,000, we've had income of 1,330, and there's still $12,641 in it. And I should also say if you want to look at another variation of these two portfolios, almost a little combination between the aggressive 50/50 and that Accelerated Permanent Portfolio, there is another levered portfolio over at M1 that I did for the Choose FI podcast and web page. That one is up 25.74% for the year of 2021. and you can take a look at that too, which I can link to in the show notes. And now we get to our last portfolio. This one's only been around since July of this year, so we don't have very long metrics for it. It is up 0.68% for the week. It is up 4.89% since inception this past July. And obviously we don't have a year long performance percentage to give you, It hasn't been around that long. So we'll be taking $60 from cash from it for January of 2022. We've distributed $357 total from this portfolio since July of 2021. And you can look at all of these things over at the portfolios page with all of the details I've just given you and more. But now I see our signal is beginning to fade. We'll be picking up this week with a special email extravaganza involving one of my most avid listeners and emailers. Hopefully covered a lot of ground there. And then I think next week we will focus some more on the annual returns for these portfolios and compare them to risk parity mutual funds and ETFs that you can find out there. and some of them did not do so well last year. But I wanted to get all that information together and so we'll put that in for next weekend. 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 website www.riskparityradio.com and put in your contact information there and I'll get your message that way. If you haven't had a chance to do it, please make it a New Year's resolution to go where you get this podcast and like, subscribe to it, give it some stars and a review. That would be great. Okay? Thank you once again for tuning in. This is Frank Vasquez with Risk Parity Radio signing off.

Mostly Mary [39:49]

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