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 foundational episodes for this program. Yeah, baby, yeah! And the basic foundational episodes are episodes 1, 3, 5, 7, and 9. Some of our listeners, including Karen and Chris, have identified additional episodes that you may consider foundational. And those are episodes 12, 14, 16, 19, 21, 56, 82, and 184. And you probably should check those out too because we have the finest podcast audience available.

Mostly Mary [1:28]

Top drawer, really top drawer, along with a

Mostly Uncle Frank [1:31]

host named after a hot dog.

Mostly Voices [1:35]

Lighten up, Francis.

Mostly Uncle Frank [1:39]

But now onward to episode 224. Today on Risk Parity Radio, it's time for our weekly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com on the portfolios page. And it was another typical week for 2022, which means it was bad. But before we get to that, I'm intrigued by this, how you say, emails. And, first off, we have an email from Brian. Brian's got a long email here.

Mostly Voices [2:21]

Mary, Mary, why you buggin'?

Mostly Mary [2:24]

And Brian writes, hello, Frank and Mary. At over 200 episodes now, it is amazing how your show has become a regular part of my week that I look forward to.

Mostly Voices [2:35]

Yeah, baby, yeah.

Mostly Mary [2:39]

I think the success of your show has been more than just listeners having a niche interest and finding a podcast that also shares that interest. I believe you have also had some less common educational and life experiences, and the way you have reflected on your experiences is also rare. Forget about it. So for listeners that have not had those life experiences, your show is rich with concepts and references that introduce us to topics we may not have otherwise had exposure to. A rare education opportunity. Wait a second, man.

Mostly Voices [3:12]

What do you think the teacher's gonna look like this year?

Mostly Mary [3:20]

As I submit additional questions to your show, I just wanted to take a moment to say thank you, and I hope you take some time to celebrate and appreciate your creation. Yes! All right, now that I've sufficiently buttered you up, here are some questions. When you have looked at how the correlation of asset classes have changed during moments of heightened volatility opposed to average correlations over long periods of time, have you had any notable observations for the major asset classes? For example, assets that are not normally correlated but during a crisis become correlated or vice versa. Similar question, have you noticed any trends or changes in these correlations during moments of high volatility over time? For example, equities and treasury bonds had historically been negatively correlated, and I was wondering if the manner in which quantitative tightening or easing could be executed along the yield curve could potentially impact the expectation of seeing traditional correlations. I was not able to find this reference, but supposedly one of Satoshi Nakamoto's motivations is to get away from the volatility in fiat currencies created by the economic manipulations of central banks. The irony, of course, being how volatile cryptocurrencies are because of their use of speculative assets instead of as currencies. But along these lines, have you given thought to insulating against monetary policy the way DeFi was intended? Is DeFi more a dream than a reality? I realize our normal risk parity strategies insulate us as well. The listener emails are great, but one thing I miss from the early days of the podcast are the dedicated sessions to a particular topic. If you ever do one again, I would love to hear your latest thoughts on uncorrelated high return drivers found in asset classes outside traditional public equities, sovereign debt, and gold. On the volatility front, Hugh Hendry recently talked about long volatility by placing bull call spreads on the USD/CKY and David Stein talked about being short by selling VIX call options. Thanks again for considering the topics. All the best, Brian.

Mostly Uncle Frank [5:35]

Well, first, thank you for the buttering. I always like being buttered.

Mostly Voices [5:39]

Don't be saucy with me Bernaise.

Mostly Uncle Frank [5:42]

And I suppose I do have some unusual experiences. I'll drive that tanker. But I'm glad that people such as yourself are interested in hearing what I have to say. Because a lot of other people beg to differ.

Mostly Voices [5:56]

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

Mostly Uncle Frank [6:01]

and that's okay too. All right, getting to your questions. Yeah, this first one's very interesting. When would we think that correlations between asset classes would change based on macroeconomic environments? And I'm not aware of any comprehensive analysis about this. Anecdotally, it does appear, for example, that stocks and bonds tend to go positively correlated when a central bank like the Federal Reserve is raising rates steeply and quickly. And this happens about every 20 years or so. Last time you saw something like this was around the year 2000. And then you're talking going back to the 1970s, in particular the late 70s with Paul Volcker. And then you can also point to Episodes like 1937, and I don't think it's any accident that people are saying this is the worst year for stock and bond portfolio combination since 1937, because the Fed raised rates substantially then and put the economy back into a recession. So there may be something to that, although I'm not sure there's been enough occurrences to conduct any kind of statistical analysis. It is also true that anything that would tend to strengthen the dollar, the US dollar, is generally bad for most other asset classes. That's why you often hear to the strengthening dollar as the dollar wrecking ball. But then again, I suppose there's many different reasons why the dollar might strengthen in a particular environment. I would think there is a correlation between the Fed raising interest rates and the dollar strengthening because obviously if you can get more dollars for your dollar, more people want dollars and more people want treasury bonds. There is an interesting analysis I found recently from Bloomberg and I refer to this in the last episode in passing. I still have not gone through it in detail, but I will link to it again in the video about it in the show notes. But what it is, is a analysis of how various asset classes do during various kinds of inflationary environments from low inflation or deflation up through moderate inflation up through high inflation. And if you think about it and compare each of them, you can see correlations or anti-correlations between asset classes in various inflationary environments. but again, that's more qualitative than quantitative because I'm just talking about looking at these graphs and comparing them. But you can do that too, and I'd be interested to see what people think of that and how it might be used. From my perspective, the main use of it in a risk parity style portfolio would be to make sure you have assets that perform decently in all kinds of inflationary environments from outright deflation to high inflation. I thought one of the most interesting findings there was that the asset class managed futures or trend following tends to perform best at the extremes, either when they're in a deflationary environment or in a high inflation environment like we have today. But you can check that out because I'll probably be talking about it more in the future.

Mostly Voices [9:33]

That is the straight stuff, O Funkmaster.

Mostly Uncle Frank [9:36]

I hadn't seen anything quite like that, at least made publicly available before. All right, moving along to your question about volatility and cryptocurrencies. I think a lot of these speculations about what effect or non-effect a cryptocurrency might have on money and uses of money. To me, a lot of it is we've seen these kind of movies before, and those who do not Recollect history are doomed to repeat it. Because when you strip away the technology involved in it, you're just talking about something being used as a currency, and whether it's privately issued or issued by a sovereign or designated by a sovereign. And we had those kind of experiments with money back in the 19th century in the United States. After 1837, there was no central bank, And so all of the currency floating around in the US was privately created by private banks, sometimes referred to as the Wildcat Banking Era. And it was messy and cumbersome, and that's often why people just used foreign currencies instead, because they knew what they were getting. I saw a really interesting Civil War related exhibit at a museum in Richmond last year. and one of the things they had there, because it was about the history of money at that time or the use of money at that time, was this guidebook for identifying currencies. Because there were so many different things floating around, it was difficult to know looking at a bill where it came from, what it was, or even if it was genuine. So you had to go look in this book to identify Even the kind of money you were dealing with. And there were a lot of reasons why people wanted to get rid of that system and eventually did. So the US did start issuing greenback fiat money during the Civil War, but that was mainly just to fund the war. Once the war ended, the powers that be, the sovereign government, decided to put the country on the gold standard and start issuing more sovereign US money again. And that happened in 1873. One of the things that was interesting was that there was both a depression at the outset of the Wildcat banking era, which was in 1837, and also one in 1873 when the country went on the gold standard. Of course, the main purpose of going on the gold standard at that time was because United States was a developing nation. And so what they were actually doing is pegging the US currency to the British pound, which was the reserve currency of the world at the time, and hopefully making it easier to use US money outside of the United States and to engage in commerce and get loans from places like London. Because if you were traveling and you took US currency abroad at that time, you'd be lucky to get 60 to 70 cents on the dollar, even though it was backed by gold. because it basically was a currency from a developing nation. And so it's kind of funny when I hear people talking cryptocurrencies talking about how it's just like gold and gold was the currency chosen by the free market to be the currency. It's like that actually never happened. Gold was chosen to be the currency by various sovereign governments who enforced it with laws. And historically, there has never been a currency or money system that was widely adopted that was not backed, in fact, by some country and the country's laws. It just hasn't happened. The other thing you saw back in the private currency era in the 19th century was a lot of fraud because you had banks that you weren't sure actually had the gold in the vault. And so this is also replaying history when we're talking about these cryptocurrency exchanges going bankrupt. In fact, what's going on with FTX looks a whole lot like what happened in 1720 in France with John Law, actually his name is pronounced John Less, and the whole Mississippi bubble and bank he created. And so people who are not aware of these histories are indeed repeating them, much to their chagrin. As to your specific question, am I aware or have I given thought to insulating against monetary policy the way DeFi was intended? And I don't think there's any mystery to how you do that, which is simply to not consider money as a store of value or a very good store of value. especially in the modern era. And that is why we invest in other kinds of things, including businesses through stock issuances, bonds, gold, real estate. That's where you would want to hold your long term assets and not in any currency, whether it's stuffed in a mattress or on a hard drive somewhere. So I don't view DeFi as something that's going to save us in some existential way from all of the issues surrounding various forms of money that have occurred historically. I view it simply as a new technology, and in order to displace the current technology, it has to be better and more efficient and then adopted, and probably with some sovereign backing, because that is the way the process has worked historically, and there's no basis to Assume or believe that the process for adoption of monetary systems or financial technologies is going to be different this time. Not gonna do it. Wouldn't be prudent at this juncture. Moving along to your request that I do another show devoted to a particular topic. Yeah, I have some of those in the back of my mind.

Mostly Voices [15:39]

The thing is, Bob, it's not that I'm lazy. It's that I just don't care.

Mostly Uncle Frank [15:47]

And one of them is this Bloomberg presentation that just came out, I think would be an interesting thing to talk about, what assets do well in various inflationary environments. But on the other hand, I do like responding to all of your emails, even with a delay. Surely you can't be serious. I am serious. And don't call me Shirley. Because I think the listeners of this show raise a lot of interesting and pertinent topics anyway. The best, Jerry, the best. And it allows me to just lay around in this easy chair in my dive bar and pontificate on various topics. Well, you haven't got the knack of being idly rich, you see.

Mostly Voices [16:22]

You should do like me, just snooze and dream, dream and snooze, the pleasures are unlimited.

Mostly Uncle Frank [16:31]

While gesticulating wildly. This is probably a good thing there's no video of this.

Mostly Voices [16:36]

Do you think anybody wants a roundhouse kick to the face while I'm wearing these bad boys? Forget about it.

Mostly Uncle Frank [16:43]

And finally, getting to your last observation about Hugh Hendry being long volatility with bull call spreads on the US dollar, CKY, I believe that you mean the Chinese currency there, and David Stein being short by selling VIX call options. While I'm sure there are many option strategies for trading volatility, that are good, at least for the purpose of this program, I do want to keep it focused on things that would be relatively easy for most people to implement. Man's got to know his limitations. And whenever I get to some kind of options trading strategy, it violates the simplicity principle for the purpose of this program.

Mostly Voices [17:28]

Forget about it.

Mostly Uncle Frank [17:31]

So I am really looking for ETF related kinds of solutions to that problem. I can't see it to be of much use to be short volatility in an overall portfolio simply because all of your assets in your portfolio are essentially short volatility of that asset. Because typically when volatility rises in relation to any particular asset, that asset is going down or is crashing. What's been interesting about this particular year is that you've seen more volatility in the bond markets than in the stock markets, which is very unusual and is related to the Fed tightening. But what is called the MOVE index, which measures bond volatility, has seen some of its highest readings this year. And I think a lot of people who are betting on very high volatility in the stock market have been disappointed by their trades because it really has not gotten above 40, I think, all year, which you would ordinarily see in a real stock market crash. If you don't mind fiddling with options and you just want to try something basic, one easy strategy to implement is to buy a call on the VIX index that expires the next month and then sell the same type of call for the following month. And that is a basic long short strategy for trading volatility. But you do have to monitor those sorts of things and roll them over every month. So it's work. I don't think I'd like another job. I am wondering whether these trend following ETFs like DBMF are going to be good enough for these kinds of portfolios in actually getting at some of this volatility, because they do trade things like currencies. And so if you are long the dollar, you are often also long volatility, at least with respect to other assets. And that fund has also been short bonds or long interest rates. this year because as they've trended upwards, the fund has been able to take advantage of that. So I'm wondering if maybe that's good enough, but I don't have a definitive answer and probably won't for some years, I would imagine. I am always interested in the experiments you all are running, like we heard about from Alexei a couple episodes ago. The dude abides. But we probably should move on from these musings. Thank you for sending in that very thoughtful and lengthy email. Class is dismissed. Second off. Second off, we do have an email from Alexei.

Mostly Voices [20:31]

So that's what you call me, you know, that or his dudeness or, Duder or, you know, Bruce Dickinson, if you're not into the whole brevity thing.

Mostly Uncle Frank [20:42]

And the dude writes, I'm sure you didn't miss this, but it's

Mostly Mary [20:46]

an excellent interview. Even covers KMLM.

Mostly Uncle Frank [20:51]

And I will link to this in the show notes. This is an episode of the Top Traders Unplugged podcast from October 16th that I had linked to previously. It's an interview of Andrew Beer, who is the person who founded and runs the DBMF Trend Following Fund. And so if you are interested in that, how it works and how it is bringing that strategy to the masses at a reasonable cost, you should check that out. And I will link to it in the show notes. And thank you for that email. Take it easy, dude. Oh yeah. I know that you will. Yeah, well, the do the binds. Last off, we have an email from Geordie. And Geordie writes：hi, Frank. With the U.S.

Mostly Mary [21:48]

national debt reaching an unthinkable $31 trillion, Europe seems to be preparing to move itself back to the gold standard again, as evidenced in this article. I know you are a fan of gold. But also don't seem to care much about our ballooning debt. Any thoughts on this?

Mostly Uncle Frank [22:04]

Well, your email raises a few interesting topics and probably not the ones you thought you were raising.

Mostly Voices [22:12]

Never go in against a Sicilian when death is on the line.

Mostly Uncle Frank [22:15]

So let's just talk about this. First, I can't see any evidence that the powers that be in Europe are planning on moving back to a gold standard. In fact, the creation of the euro was a move away from that idea. And if they were to do that, history tells us it would probably look like the US in 1873, and they would have a depression. That's not an improvement. And the fact that all of these sovereigns have lots of debt on their books makes it even less likely that they would move to some hard money standard. You would only do that if you were a creditor nation, not a debtor nation. 'Cause if you're a debtor nation, you want the money to be weaker so you can inflate away your debt by tying it to something like gold, you just make it very strong, and then you owe your debts in gold. Gosh! Idiot! And that's generally where the wheels start to fall off, as happened in post-World War I Germany, Austria, and Hungary. Now, as for the ballooning debt, well, the debt has been ballooning my entire life, and I've been hearing stories about it my entire life, and I've been walking around this earth almost 60 years. The real question you should be asking yourself is not these questions, but what is the motivation of the people that tout these predictions, stories, so on and so forth? A, B, C.

Mostly Voices [23:46]

A always B, B, C closing. Always be closing.

Mostly Uncle Frank [23:54]

And you linked to an article from some precious metals dealer, which I will not link to in the show notes, as I do not wish to publicize that outfit. But who are these people and why do they make these assertions? What are they getting out of it? What you really need to recognize here is that the whole precious metals complex, physical precious metals, is just another financial services racket. That's all it is. It's no different than people touting insurance policies and other things to get large commissions from and saying this is the solution to all of our problems. Watch out for that first step. It's a doozy.

Mostly Voices [24:36]

Now, who is in on this particular racket?

Mostly Uncle Frank [24:40]

There's a lot of people in on this particular racket. Am I right or am I right or am I right?

Mostly Voices [24:43]

Right, right, right.

Mostly Uncle Frank [24:48]

First, there's the people that are actually buying and selling the physical precious metals because they get large commissions or spreads on those things. Bing! Second, you have the people who are creating ways of storing or securing The physical precious metals, whether that's in vaults somewhere or in safe deposit boxes or safes in your house and other things like that. Bing again! And then we have the people creating the special IRAs where you can hold things like physical real estate and physical precious metals. They're also making a buck off this. Because only one thing counts in this life. Get them to sign on the line which is dotted. And then there are a whole slew of people that write newsletters, people that have podcasts or other media shows. If you look through how they get paid, a lot of them get paid by the same people that are profiting from the precious metals trade. It's no different than the financial media touting particular fund managers and things like that. They're all making money off the enterprise of spreading this kind of information and selling this particular asset class, which carries high costs. And then this leads you to the people who publish the newsletters and books on these kinds of topics. such as gold standards and ballooning debts and other things like that. My name's Sonia.

Mostly Voices [26:32]

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

Mostly Uncle Frank [26:44]

These are the Jim Rickards and the Peter Schiff's and people that have been around for a long period of time. I could stand up here and talk on and on like some bow weevil sitting on a stump bragging to a dog in heat. And they make money off of selling newsletters and books, which often carry ads for precious metal dealers and people that help you deal with precious metals in their physical form. Now, what should you know about people that write these kinds of newsletters and books? If you are going to be a discerning person in this kind of media environment, you need to recognize the difference between hedgehogs and foxes. I've talked about this before. Now, hedgehogs and foxes are two of the labels the researcher Philip Tetlock came up with to describe experts who make forecasts. And hedgehogs have one or two big ideas that they are always touting and that drive most of their thinking and most of their forecasting. Hedgehogs know one big thing. Foxes, on the other hand, know lots of things that are people that try to absorb as much different sources of data as possible to help with their forecasting. And as it turns out, hedgehogs are terrible forecasters. They're terrible. You can't handle the crystal ball. Foxes are generally much better at forecasting and so can give you more actionable things as far as your portfolio is concerned. Now, as it also turns out, most of the people who write these newsletters and these kinds of books and things are hedgehogs. And why is that? That is actually more attractive from a marketing point of view if you want to sell newsletters and books. A few months ago, I listened to this great interview. I wish I could find it again. And it was of somebody who was in the newsletter business back in the 1990s. And at first, he tried to create a newsletter that actually had actionable forecasting in it. But what he realized is that that was really hard to do. And unless you were right a lot of the time, the chances of your newsletter catching on were not very good. And what he learned is that the people that were successful in the newsletter business were the ones who just identified some big problem in the world. And we're always talking about that and then doing some kind of forecasting based on this one big problem.

Mostly Voices [29:21]

As you can see, I've got several here, a really big one here, which is huge.

Mostly Uncle Frank [29:29]

And so if you want to be successful at selling newsletters and these kinds of books, It's in your best interest to behave as a hedgehog, whether you're a hedgehog or not. If you behave as a hedgehog, come up with these big problems, then you have something to write about all the time. And then you can always say when you are wrong is that, well, I'm not wrong, I'm just early. And so that's frequently what these people will say when you confront them and say, well, that forecast was useless and it was wrong, because most of them are wrong. most of the time. Wrong, right? Wrong! But it's much easier to attract a loyal following when you have a kind of mantra that is boiled down to talking about some specific boogeyman or problem or something in the world. And then the people that find that kind of thinking attractive will continue to subscribe to your newsletter because it also feeds their need to have something that confirms their beliefs.

Mostly Voices [30:33]

That's the fact, Jack! That's the fact, Jack!

Mostly Uncle Frank [30:38]

And so these folks end up being natural allies for the people that are in the physical precious metals business. Because frequently they're saying, because of this big problem, the world is going to hell in a hand basket, and how are you going to gird yourself for that eventuality? Now, the crystal ball has been used since ancient times.

Mostly Voices [30:56]

It's used for scrying, healing and meditation.

Mostly Uncle Frank [31:04]

Well, funny, I have these people over here who advertise with me and they have these physical precious metals and these other ideas. And then you can be smarter than everybody else because you believe me and we're all in the know, blah, blah, blah, blah, blah.

Mostly Voices [31:17]

It's all one big crapshoot, anywho.

Mostly Uncle Frank [31:21]

It's just a big sales job on many levels, what it ends up being.

Mostly Voices [31:24]

A guy don't walk on the lot lest he wants to buy. They're sitting out there waiting to give you their money.

Mostly Uncle Frank [31:32]

Are you gonna take it? And how do we know this? We know this because really, if you want to invest in something like precious metals, the first thing I always do is look to see how do professional investors managing millions or billions of dollars of people's money go about making these kinds of investments? They use the best financial technologies available. Because they're more efficient and they're cheaper. And in this case, that financial technology happens to be the exchange traded fund, the ETF. And so if you want to be the most efficient investor at the lowest cost and do it the way professionals do it, that is how you want to hold your investments in precious metals. It's just that simple. That's what I'm talking about. Owning physical precious metals is the same problem you have when you're talking about these variable annuities with funds inside them. That is a very inefficient way of investing in mutual funds is to shove them inside an annuity. Similarly, it's a very inefficient way to invest in precious metals by buying the physical metals and storing them or paying somebody to store them for you. And so the real reason that people use the inefficient mechanisms for investing is, one, they don't know what they're doing because they're not professionals, they're amateurs. Two, they like these kind of attractive narratives, these hedgehog stories. And that's just human nature because something just is more attractive if there's a big narrative attached to it, as opposed to some cold, hard, data analysis of portfolio allocations. And then third, there's the marketing technique of making people think that they are smarter than the rest of the world by following this course of action. And a lot of bad financial products are sold that way. As we're adding a little something to this month's sales contest, as you all know, first prize is a Cadillac El Dorado. Anybody want to see second prize? Second prize, a set of steak knives. And that's why you see a lot of ads which say things like, this is how the Rockefellers did things, or this is what wealthy people do, or these are the secrets of the Illuminati or something like that. All of this is getting at people who probably feel like they're not as smart as the professionals, but they want to make an in run around the professionals. And this sort of behavior and buying into these sorts of things makes them feel smarter. But these are all well-known sales techniques used to sell all kinds of things, not just financial products, but in terms of selling financial products, it's just another racket. It's just another marketing scheme. Am I right or am I right? Or am I right? Am I right? And it's probably not something we want to spend our hard-earned money on. Because we want to use the most efficient and cost-effective methods of investing in whatever we're investing in. But that is probably more than enough on that topic, and probably not the answer you were expecting. Expect the unexpected. But thank you for that email.

Mostly Voices [34:51]

And now for something completely different.

Mostly Uncle Frank [34:55]

And the something completely different is our weekly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com On the portfolio's page, just looking at the markets this week, unlike last week, almost everything was down, except for the usual suspect. So the S&P 500 was down 3.37% last week. The Nasdaq was down almost 4%, 3.99%. Small cap value, represented by the fund VIoV, was down 4.59%. Gold was nearly flat. Gold was only down 0.18% for the week. Long-term treasury bonds were not so bad. As represented by the fund TLT, they were down 0.71% for the week. REITs represented by the fund R E E T were down 1.51% for the week. Commodities represented by the fund to PDBC were down 4.84% for the week. They were the big loser. The price of oil keeps going down and that has a great effect on that. Preferred shares represented by the fund PFF were down 3.1% for the week. And the only thing that was up was the trend following fund DBMF. Managed futures were up 0.75% for the week as represented by that fund. Moving to these portfolios, first one is our all seasons reference portfolio. This one is only 30% in stocks in a total stock market fund. 55% in treasury bonds, intermediate and long term, and the remaining 15% in gold and commodities split down the middle. It was down 1.72% for the week. It was down 16.81% year to date and down 5.1% since inception in July 2020. Now moving to these three bread and butter portfolios that are more akin to a 60/40. in risk reward terms. First one is the Golden Butterfly. This one's 40% in stocks divided into a total stock market fund and a small cap value fund. 40% in bonds divided into long and short and 20% in gold GLDM. It was down 1.77% for the week. It's down 11. 89% year to date and is up 9.67% since inception in July 2020. Moving to the next one, the Golden Ratio. This one is 42% in stocks and three funds, 26% in long-term treasuries, 16% in gold, 10% in a REIT fund, and 6% in a money market in cash. It was down 1.88% for the week, down 16.58% year to date, and up 6.14% since inception in July 2020. Moving to the next one, which is the most diversified one, has a little leverage in it. This is the Risk Parity Ultimate. It has 15 funds in it. I'm not going to go through them. It was down 2.07% for the week. It's down 21.97% year to date and down 0.74% since inception in July 2020. Now moving to our experimental portfolios. We run hideous experiments so you don't have to. Real wrath of God type stuff. These all involve leveraged funds. So we're playing with fire here.

Mostly Voices [38:18]

Fire and brimstone coming down from the skies.

Mostly Uncle Frank [38:21]

First one is the Accelerated Permanent Portfolio. This one's 27.5% in a leveraged bond fund, TMF. 25% in a leveraged stock fund, UPRO. 25% in a preferred shares fund, PFF, and 22.5% in gold GLDM, it was down 3.82% for the week. It's down 36.78% year to date and down 12.97% since inception in July 2020. Moving to the most leveraged and least diversified portfolio here, the aggressive 50/50. This one is 33% in a leveraged stock fund, UPRO, 33% in a leveraged bond fund, TMF. And then the remaining third is divided into a preferred shares fund, PFF, and an intermediate treasury bond fund. VGIT, it was down 4.5% for the week, it's down 44.93% year to date, and down 17.66% since inception in July 2020. What's interesting about this fund is we rebalanced it last month, but we may be also rebalancing it again this next month. Bing again! Kind of depends on how the bond fund performs relative to the others in the next week, because it's done so well since we rebalanced it, it's almost above its targeted allocation by over 7.5%. So we'll check it on the 15th and see whether it's a candidate for another rebalancing. Now moving to our seventh portfolio, the youngest one. This is the Levered Golden Ratio. It is 35% in a levered composite fund called NTSX. That's the S&P 500 in treasury bonds. 25% in a gold fund, GLDM. 15% in a REIT, O. 10% each in a leveraged small cap fund, TNA, and a leveraged bond fund, TMF. The remaining 5% is divided into a volatility fund and a Bitcoin fund. It is down 2.73% for the week, down 24.35% year to date, and down 19.89% since inception in July 2020. All in all, another ugly week, although not as ugly as some of the weeks have been. I think this is the worst week the markets have had since September. We'll see if they recover next week or not, or in time for Christmas. with the so-called Santa Claus rally.

Mostly Voices [40:55]

One thing I hate all that noise, noise, noise, noise. But now I see our signal is beginning to fade. It's been a long episode.

Mostly Uncle Frank [41:05]

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 put your message into the contact form and I'll get it That way. If you haven't had a chance to do it, please go to your favorite podcast provider and like, subscribe, give me some stars, a review. That would be great. Mmmkay? Thank you once again for tuning in.

Mostly Voices [41:35]

This is Frank Vasquez with Risk Parity Radio signing off. I don't feel dirty.

Mostly Mary [42:00]

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.