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. Top drawer, really top drawer, along with a host named after a hot dog.

Mostly Voices [1:34]

Lighten up, Francis.

Mostly Uncle Frank [1:37]

But now onward to episode 240. Today on Risk Parity Radio, it's time for our weekly and monthly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com. on the Portfolio's page. Boring! But before we get to that, first a special announcement. I learned from the BBC today that Ozzy Osbourne will no longer be touring due to health issues. We are sorry to hear that and wish him well. Now moving to our favorite part of the program.

Mostly Voices [2:22]

I'm intrigued by this.

Mostly Uncle Frank [2:30]

How you say, emails? And? First off, I have an email from Kyle.

Mostly Mary [2:33]

Kyle! And Kyle writes, hi Frank and Mary, I have recently started saving for my child's education in a 529 plan. Right now, I am 100% stocks, although over time I would plan to lessen the stock exposure. Would you talk about how you change your asset allocation when saving for your children when it got closer to them going to college? Using a risk parity model seems like it would be a nice option. However, the options within the 529 plan are limited. For example, there is no government bond fund or a gold fund. Thank you for all you do. This is the end, Kyle.

Mostly Voices [3:13]

It's you and me.

Mostly Uncle Frank [3:16]

Well, Kyle, we also had a 529 plan with relatively limited options, really just about five or six funds, but it was a state plan and we got a state tax deduction for using it, so that's why we used it. So I just went with a very simple plan, which was to keep it all in equities. I think it was A total stock market fund from Vanguard is what was offered there. And then when they got to high school, I moved it all into bonds. And there were a couple reasons why I chose a very simplistic plan like that. One was that our contributions to 529s were not that significant. We mostly used them to get the tax deductions. So we were effectively saving in other accounts as well. The second issue is we wanted pretty much certainty as to approximately what that money was going to be, the amount of money that was going to be in there, so that when we were planning payments and how much it was going to cost and how much we needed to add to what we had already saved, it made it a lot easier planning process. I think if you were going to try to apply something like risk parity principles to such accounts that you would probably have the 529 as just part of the account, and then you would have other savings and treat it as one kind of big portfolio and thereby put in the stuff you couldn't get in the 529 in the taxable brokerage account or wherever else it was. But whether you really need to go to all that trouble has more to do with the scale of what is in these accounts than anything else. Now there are some interesting developments with 529s. And going back to when we were first saving, you could only use them for college expenses. Then a few years ago they opened that up and you can use it for basically all kinds of educational expenses. But now you can even use them in part to fund a Roth IRA for the beneficiary provided that you comply with Certain rules about how long the account is open and then how long the assets are in the account. And there's a limit of $35,000 right now. But I wouldn't be surprised if that gets expanded in the future. So starting with this year, it makes sense as soon as your child is born to open 529s in their name just to get that clock running for this transfer to an IRA, even if they never plan on going to school at all. But now I'm getting a little off topic. That was not what you were asking about.

Mostly Voices [5:54]

Don't be saucy with me, Bernaise.

Mostly Uncle Frank [5:57]

I think if you're going to use risk parity strategies in saving for college, it's probably going to require more than just the 529 accounts, given what is generally available in those these days. And once you get really close, it makes more sense to actually just move that into cash and cash equivalents or short-term bonds. It's not very exciting, but it is a best practice for that sort of thing. Yes! Hopefully that helps at least a little bit, and thank you for your email.

Mostly Voices [6:29]

Don't let it go, Cal. I want to hold you every morning and love you every night, Cal. I promise you nothing but love and happiness. I swear by the moon and the stars and the sky. I'll be there, Cal. I swear. Like the shadow that's by your side. Cal, swear to God, I'll be there.

Mostly Uncle Frank [7:01]

Second off, we have an email from Essek.

Mostly Mary [7:06]

And Essek writes, thank you for all that you do and for introducing me to Risk Parity. Many continue to benefit from not only your knowledge, but also your funny movie clips. I'm funny how? I mean funny like I'm a clown? I amuse you? I make you laugh? A man has got to know his limitations. Clint Eastwood, Magnum Force.

Mostly Uncle Frank [7:26]

Well, I'm glad you're finding my silly behaviors and idiosyncrasies to be entertaining. Cause not all people do. And that's okay. I did the whistling belly button trick at the high school talent show.

Mostly Voices [7:40]

Bing!

Mostly Uncle Frank [7:44]

You know, it's funny, I've had many people say things like, well, if you did this, this, and this, you could expand your audience and attract subscribers and get sponsors and blah, blah, blah, blah, blah. Yada, yada, yada, yada, yada, yada. And I always go back to this parable of the Mexican fisherman that I'm sure some of you are familiar with about the US businessman who goes on a vacation and goes and meets this Mexican fisherman in his village. and sees his little operation there and asks him how he spends his time. And he says, well, you know, I go fishing in the morning and catch enough fish for my livelihood. And then I just hang out and play music and have a good time with my friends in the afternoon and my family. Then he says to him, well, no, if you could really ramp this up and get a bigger fleet of boats and catch a lot more fish, and you could become really wealthy doing that. And the fisherman says to him, well, that's all fine and good, but after that, what would I do? He's like, well, then you could retire, and you could spend your time hanging out with your friends and family and playing music and having a good time. I think in this world, in particular, when you talk about financial-oriented podcasts or media or something, there's always this drive or pressure to try to monetize everything. That doesn't really make a whole lot of sense when you think about it, because the concept of enough not only applies to how much money do you need to accumulate? It also applies to what do you expect to get out of any particular activity? What is enough for you? And for me in this podcast, enough is having a nice audience that is very interested in these topics and does not mind or is entertained by my antics. Yeah, baby, yeah! I think this was Driven home in the past few months, I was listening to another financial podcast. I think it was Marriage, Kids, and Money. And the host and his wife were talking about, what would they do if they won the lottery? And he says, well, you know, I think what I would do is I would get rid of all the sponsors on the podcast so I wouldn't have to deal with that anymore. Which led me right back to the parable of the Mexican Fisherman. And why I'd really just rather have fun here than try to please too many of the masses out there as to what is deemed acceptable in podcast land.

Mostly Voices [10:06]

Forget about it.

Mostly Uncle Frank [10:09]

Because I really don't aspire to that. You could ask yourself questions. So I'm glad you are enjoying the podcast. You are just the kind of audience member I hope to attract.

Mostly Voices [10:20]

You're not going to amount to jack squat.

Mostly Uncle Frank [10:24]

And thank you for your email. You're a dinosaur, Callahan. Your ideas don't fit today. You know who you're talking to? You know my record? Yeah. You're a legend in your own mind. Last off.

Mostly Mary [10:50]

Last off, we have an email from Aaron, and Aaron writes, Uncle Frank, thanks to you and Mary for continuing to share your time and experience with all of us. I have a philosophical question for you. Have you ever heard of Plato, Aristotle, Socrates?

Mostly Voices [11:01]

Yes. Morons.

Mostly Mary [11:04]

Have you heard of the concept of a minimum dignity floor as described in the retirement and IRA show? Have a time. The basic premise is that any monies needed for basic food, utilities, transportation, housing, and healthcare should be principally protected and in the form of secure income. whereas monies that are used for fun may be allocated to a bucket strategy based on expected time horizons for use. This strategy contains the implicit assumption that at some point in the investor's dotage, they will no longer be willing or capable of managing their portfolio, thus making do-it-yourself investing a risky proposition. I'm curious about your thoughts on this concept and how the risk parity style portfolio might be incorporated into a drawdown strategy with these time and risk phased buckets. Have a happy New Year and a joyful 2023. Many thanks, Aaron. A question.

Mostly Voices [12:09]

Since before your sun burned hot in space and before your race was born, I have awaited a question.

Mostly Uncle Frank [12:20]

well, this is the most excellent question because it gets at a fundamental topic that I see most of the personal finance world gets very confused about and results in sub-optimal advice and sub-optimal practices. And that is failing to distinguish between portfolio allocation strategies and portfolio management strategies. and thinking that you can change the performance of a portfolio allocation with management techniques, which is actually not true.

Mostly Voices [12:58]

It's a trap!

Mostly Uncle Frank [13:02]

And let me give you an analogy or a couple of analogies here to help you think about this. Suppose you are the captain of the good ship Lollipop. Good ship Lollipop, it's a sweet trip to a candy shop where fun And so when you are going off on your voyage, you have to decide, well, what lollipops am I going to bring on this voyage? And so you bring your 100 lollipops on the voyage, and then you have your lemon ones, and you have your cherry ones, and you have your mint ones, Now, once you bring them on board, that's all you have. That is your allocation of lollipops, if you will. Now, what do you do with your lollipops when you have them there? Then you get to manage them. Then you get to arrange them. Which ones are we going to lick first? Ah, the sweet smell of an all-day sucker. Which ones do we lick when it's sunny? Which ones do we lick when it's stormy. What order do we arrange them in? But all of those rules and techniques do not change what you've brought on board with you. They do not change how the lollipops taste or how long they'll last. They do not change the overall performance of your lollipops. So now this leads me to the next point, or a best practice. Whenever you are talking about Retirement portfolios, what they are, what you do with them, various quote strategies, unquote. You need to sit down and decide in your mind, is this a allocation strategy? Is it about what lollipops we have here? Or is it about a management strategy? What order are we going to lick them? And when are we going to lick them? Because most of the things that people talk about as strategies are simply the management, what order that things go in. They are not talking about the real meat of the matter, the portfolio construction. That's what we're talking about when we're talking about a risk parity style portfolio. What are the lollipops? What is in this thing? Not what order are we licking them in? Because what happens when you focus on management strategies first, whether you call them bucket strategies, dignity floors, these other concepts, those can distort the allocations in such a way that you are getting suboptimal allocations in your portfolio just to comply with some management strategy. And it frequently results in people holding portfolios that look like a big pile of cash and a big pile of stocks, which is not a good portfolio to hold. in retirement. Hello.

Mostly Voices [15:59]

Hello, anybody home?

Mostly Uncle Frank [16:03]

It doesn't perform very well and it does not maximize your projected safe withdrawal rate. You can only do that through portfolio allocation. You cannot change your projected safe withdrawal rates with management techniques. But that does not mean that management techniques are not very useful. Management techniques are useful for understanding and they can be useful for what to do at a particular time in a particular year. What's funny about management techniques is that is actually what most financial advisors use to explain things to clients because portfolio construction is very difficult to explain to somebody who's just not familiar with anything at all. And that's where these labels like minimum dignity floor and other things come from. Another popular one is, well, you plan for your go-go years, then your slow-go years, and then your no-go years. All that stuff sounds nice and it goes down easy and it's easy to explain, but a lot of it is just labeling. So let's talk about the concept of a minimum dignity floor and why they might call it that as opposed to what it is. Your minimum dignity floor is just your baseline expenses for life. How much does your shelter, food, medical, what does it cost you to live a basic life? I have a different word for that. I just, I call it your KLO expenses. Keep the lights on.

Mostly Voices [17:30]

These things you say we will have. We already have. That's true. I ain't promising you nothing extra.

Mostly Uncle Frank [17:39]

Now why would financial advisors want to call that something different, like a minimum dignity floor? The reason they do that is primarily because it's a very vague concept that you can shove all kinds of things into. Because minimum dignity can mean different things to different people.

Mostly Voices [18:00]

I will only hunt what we need to live on, same as the Comanche does. And every spring when the grass turns green, the Comanche moves north. You can rest here in peace. some of our cattle and jerk beef for the journey. And for some people, minimum dignity is driving a Mercedes-Benz.

Mostly Uncle Frank [18:20]

So this allows a financial advisor to shove things into this concept that aren't necessarily what all of us would consider minimum baseline expenses.

Mostly Voices [18:32]

There is iron in your words of death for all command you to see. And so there is iron in your words of life.

Mostly Uncle Frank [18:40]

It allows you to stick that beach house or expensive club membership into your minimum dignity, because from a monetary perspective, it doesn't matter what the expenses are, it just matters how much they are and how much you have. I'd rather just strip off that veneer and call it what it is. I have heard you're the Gray Rider. But this does get us to the bigger concept of the two basic ideas for managing a retirement portfolio. One is to segment out your expenses. That's where these things like minimum dignity floors come in and then match assets to them. On the opposite end is more what I would do, which is to look at your entire portfolio, try to maximize the safe withdrawal rate, and then make sure that these dignity expenses or KLO expenses are just a small portion of what that would be. You end up in the same place, but I think by forcing things into this segmented framework, you actually end up with portfolios and systems that force you to take out less money than you could if you were to manage this in a more holistic way. And not try to segment it out that way. For a lot of people though, segmenting this out just feels a whole lot better because they don't understand portfolio construction.

Mostly Voices [20:14]

You need somebody watching your back at all times.

Mostly Uncle Frank [20:17]

And for a financial advisor, it's much easier to explain a plan in segments than it is to try to explain principles of portfolio construction and safe withdrawal rates. So the main way that financial advisors use this particular planning tool is to look at the fixed income that somebody has from, say, Social Security or a pension, look at the baseline expenses, what you call a minimum dignity floor, and then they will take part of the assets accumulated and buy other fixed income vehicles. particularly annuities, to essentially create another pension kind of income to match up with this minimum dignity floor concept. Now, that sounds all great and all fine and good, but it does reduce in most cases your projected safe withdrawal rate, especially if you're talking about somebody who's a younger or early retiree. And the reason that is, is that The kinds of things you use to create pensions, annuities, are based on actuarial tables about when you're going to die. So when you're young, the payouts are low and they are going to have a longer time to wither by the forces of inflation because these are not inflation adjusted things. As you get older, say around 70, the payouts are very high and since you're not going to live as long, The ravages of inflation will be less on you over that period of time. And in my experience, most financial advisors do not make that distinction. Instead, what they do is bring you in when you're 60-something and sell you stuff to set you up at that point in time. And often it ends up being a very expensive and inefficient way of approaching this. It also can be very inflexible because the idea that you're going to plan out the rest of your life at age 60 and not have to change things due to health issues, relationship issues, or family issues or something else is kind of silly when you think about it. Stupid is as stupid does, sir. You'd be much better off having a more flexible plan the younger you are. So in my view, the older you are, the more this makes sense. The younger you are, the less it makes sense. And in my case, we will not start looking at annuity products until we get close to 70 and we know we are in good health and are likely to live a long time. Then we will start thinking about these minimum dignity floors or using those kind of products to cover our baseline expenses. because then we'll also have a better idea as to what our social security income is likely to be and what we have in the rest of our portfolio. And there are things like QLACs, QLAC, that are annuities you can buy with the money that you would ordinarily be using for RMDs, for example, to create immediate or deferred annuity payments. But none of that stuff really makes much sense to talk or think about until you get to that age, to your 70s. All right, now let's talk about these so-called bucket strategies, which are a variation on this theme. Bucket strategies are also just a management technique. They do not change the overall performance of your portfolio. The main problem with them is the more buckets you have, the more rules you need to decide what happens when. I frequently see people who have adopted these kind of strategies have a year like last year and they don't know what to do because their rule set does not cover all potentialities. It doesn't always tell them which lollipop they should be licking and it doesn't always tell them how to rebalance their portfolio in view of managing these buckets. So what you end up with are unnecessary layers of complication which leads to confusion and often leads to poor portfolio construction. One false assumption I hear frequently is that I will just have three to five years of cash and cash equivalents and that should get me through any downturn. Wrong! Okay, that notion is false. Wrong! It's false. Right? Wrong! If somebody tells you that, They haven't been thinking. They don't know what is going on. They don't know how markets work.

Mostly Voices [24:58]

You can't handle the dogs and cats living together.

Mostly Uncle Frank [25:02]

If you're going to take a bucket of cash and then the rest of your money is in stocks, you could be facing up to a 13-year downturn. And that's happened twice in my life. 13 years. Now you're not going to make your portfolio work well with 13 years of cash in it. That's not how you do this.

Mostly Voices [25:21]

That's not how it works. That's not how any of this works.

Mostly Uncle Frank [25:26]

What you need is a better portfolio overall that is going to have less of a downturn recovery time. And the kinds of portfolios we talk about here, the sample portfolio of the golden butterfly or golden ratio tend to have a three, four, five year time frame for recovery, which is just another way of saying your effective safe withdrawal rate is higher. But that is a good example of the fundamental problem with trying to use a management strategy as an allocation strategy. It doesn't work.

Mostly Voices [26:06]

I award you no points and may God have mercy on your soul. Unless you're just lucky. But Ian, this is a 44 Magnum, the most powerful handgun in the world, and would blow your head clean off. You've got to ask yourself one question. Do I feel lucky? Well, do you, punk?

Mostly Uncle Frank [26:27]

Okay, so what approach do I use? Well, first thing I do is I get rid of all the management techniques and labels and complications.

Mostly Voices [26:38]

You know, I got friends of mine who live and die by the actuarial tables.

Mostly Uncle Frank [26:43]

The first thing I want to do is create a portfolio that I think will have a high safe withdrawal rate, a high projected safe withdrawal rate. Because I know, regardless of how I draw from that portfolio or what labels I put on it for buckets or whatever else, it's going to be better. than some other portfolio with a lower projected safe withdrawal rate. That is the straight stuff, oh, Funk Master. So that's the first step. Do the portfolio allocation first, then figure out how you're going to management, not come up with a management strategy, and then shove your allocations into that strategy and hope it works.

Mostly Voices [27:26]

That's not an improvement.

Mostly Uncle Frank [27:31]

'Cause the only way that second plan works is simply to reduce your spending. And if you're going to reduce your spending to low amounts, then it doesn't really matter what you hold. But isn't the point to spend more of your money and not less of your money? I would assume that most people want to be able to spend more of their money even if they choose not to spend more of their money. Because then maybe they can give some of it away while they are alive. All right, so the kind of portfolios we create here generally have safe withdrawal rates that are 5% or more. That's our minimum dignity safe withdrawal rate. And yes, I'm joking. This woman has to be gotten to a hospital. A hospital? What is it? It's a big building with patients, but that's not important right now. If we know that and have confidence in that, and I think almost 100 years of data is Enough confidence and enough proof on that. If you want to hear about a 100-year data analysis, go back to episode 223 and listen to it. So now that we have this portfolio that has a 5% plus safe withdrawal rate using the Bernstein assumptions, which means you are adding inflation every year, which you actually don't do, and it's over a 30-year time frame, which could be more or less. Then you turn to the management part of this, and the management part of it tends to make your safe withdrawal rate even higher because you are in fact not going to be taking 5% every year and you are not going to be increasing your withdrawals by the CPI rate of inflation. What I suggest you do is take 3% and assign that to your KLO expenses, or if you want to call it a minimum dignity floor, you can call it that. But 3% and no more than 3% should go to those kind of expenses. Then you have another 1% that can go to what I would call comfort expenses. Those are replacing the car, going on nice vacations, maybe having a beach house, having people clean your house, memberships, stuff that you could cut if you wanted to. and it wouldn't kill you.

Mostly Voices [29:44]

Dead is dead.

Mostly Uncle Frank [29:48]

So that gets you to four, and then between four and five, that other one percent, that can be used on extravagances, something you might not do every year. Take the entire family to Italy for three weeks or something like that. Go on an around the world cruise. Groovy, baby! Anyway, if you have a good portfolio to start with, with a high safe withdrawal rate, I don't think your management techniques need to be any more complicated than that. You can make them more complicated. You can assign various allocations in your portfolio to various buckets, if you wish, but it's not going to change the overall management of the portfolio, or it shouldn't, or it needn't. So along those lines, part of your portfolio almost certainly is going to be devoted to Cash or cash-like instruments, short-term bonds, I bonds, those sorts of things that are designed for stability and you get whatever income you can off of them, but you're not relying on them for long-term returns. If you would like to call that a short-term bucket, you can call that a short-term bucket. The most aggressive short-term bucket would be something like one year of cash, four or five percent in your portfolio. And that is actually what the originator of the bucket strategy, the original bucket strategy, that's all he was talking about is taking a piece of your portfolio, carving off what you needed for next year, putting it in cash, and that was it. Now, if you look at a sample portfolio like the golden ratio that we have that has one and a half years of cash in it, essentially six percent. Or if you want a more conservative allocation, look at something like the Golden Butterfly that has 20% in short-term bonds. That is essentially a short-term bucket if you want to call it that. That is probably the largest amount you would ever want to put in a portfolio in terms of short-term instruments. As many others have found, once you go above 10% of your overall portfolio in short-term instruments like that, then you do begin to degrade the overall long-term performance of your portfolio. 10% is essentially two to three years of expenses, which is probably more than most people need. Now, there may be other management techniques that you want to use, such as bond ladders, but don't think that they're going to change the overall performance of your portfolio. Go back to episode 219 if you want to hear about that. But again, do not confuse management techniques with portfolio construction techniques. They are two different things and they serve two different purposes. And if you fixate on management techniques, you are likely to screw up your portfolio construction because you're not taking it into account. I've carried on long enough about this, but just One more point on managing withdrawals that we've talked about in the past. Go back and listen to the episodes with Karen. I believe those are episodes 163 and 160. But the two basic techniques are to just draw from your cash allocation or cash bucket, which is what we do with our Golden Ratio Sample Portfolio. We just take out the withdrawals every month from that and then rebalance into it at the end of the year. That's exactly how the original bucket strategy worked. It wasn't any more complicated than that. Or you can look at the entire portfolio and take the best performing asset at that particular time, which is the way we manage the other portfolios in our samples and look and see how the golden butterfly portfolio is managed there. you could easily have taken that Golden Butterfly portfolio and decided that you wanted to just take from the short-term bonds the whole year long and then rebalance them to them at the end of the year. That would be perfectly acceptable. And if you are rebalancing once a year, it probably doesn't matter that much which way you are doing it, because essentially every time you rebalance it, you're just resetting the whole thing. and each individual monthly or quarterly withdrawal is not going to be so significant in the portfolio that it's going to change a whole lot of the performance. That is more of a preference than anything else. Paul Merriman uses the once a year segregated off idea. Every year he and his wife take five percent of their portfolio, put it in short-term cash and then they just spend that for the year. I think they're going to 6% now because he's got too much money. But again, these management techniques don't need to be that complicated if you have a decent portfolio to begin with for long-term withdrawals. And focusing on the management techniques is not a good way of approaching this. Focus on the portfolio first. then on the management techniques second. Hopefully that helps, or at least doesn't go down too difficult. It really sounds like I'm administering some bad tasting medicine, doesn't it? It is good that warriors such as we meet in the struggle of life or death. It shall be life. But thank you for that email. Now we are going to do something extremely fun. And the extremely fun thing we get to do now is our weekly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com on the portfolios page. We also have our monthly distributions to talk about since the month turned over. and we'll talk about those as well. Just looking at the markets last week, the S&P 500 was up 1.62% for the week. The Nasdaq was up 3.31%. Small cap value represented by the fund VIoV was a big winner last week. It was up 5.65%.

Mostly Voices [36:17]

I'm telling you fellas, you're gonna want that cowbell.

Mostly Uncle Frank [36:21]

Gold was one of the big losers. It was down 2.58%. Long-term treasury bonds represented by the fund VGTLT were nearly flat. They were down 0.06%. REITs represented by the fund REET were up 1.09%. Commodities represented by the fund PDBC were down 4.97%. And preferred shares represented by the fund PFF were up 0.21%. And finally, managed futures represented by the fund DBMF were down 0.99% for the week. Moving to these portfolios, our first one is this reference portfolio called the All Seasons. It is only 30% in stocks in a total stock market fund, 55% in treasury bonds divided into intermediate and long term, and then the remaining 15% in gold and commodities. It was down 0.04% for the week. It is up 5.52% year to date and down to 2.98% since inception in July 2020. For the month of February we're withdrawing $30. 00 coming out of cash that has accumulated that's at a 4% annualized rate. We'll have taken out $58.00 year to date and $1,032.00 since inception. Moving to our kind of bread and butter portfolios, first one is this golden butterfly. It is 40% in stocks divided into a total stock market fund and a small cap value fund, 40% in treasury bonds divided into long and short and 20% in gold. It was up 0.80% for the week. It is up 6.89% year to date and up 14.61% since inception in July 2020. We'll be distributing $42 from it from the gold fund GLDM for February and that's at a 5% annualized rate. That will be $82 year to date and $1,380 since inception in July 2020. Next one is the golden ratio. This is 42% in stocks divided into three funds, 26% in Long-term Treasuries, 16% in gold, 10% in a REIT fund, and 6% in a money market fund from which we take the distributions. It was up 0.88% for the week. It is up 7.61% year to date and up 10.32% since inception in July 2020. We'll be taking $40 from that money market fund for February. It's at a 5% annualized rate. We'll have taken $78 year to date and $1,363 since inception in July 2020. Next one is the Risk Parity Ultimate. It's kind of our kitchen sink portfolio. It's got 15 funds in it. I will not go through them. It is up 0.57% for the week. It is up 8.43% year to date and up 2.4% or 8% since inception in July 2020. We'll be distributing $44 out of it from the cash that has accumulated for February. That's at a 6% annualized rate. So that'll be $85 year to date and $1,581 since inception in July 2020. And now we'll move to these experimental portfolios involving leveraged funds. Tony Stark was able to build this in a cave. With a bunch of scraps. First one is the Accelerated Permanent Portfolio. This one has 27.5% in a leveraged bond fund, TMF, 25% in a leveraged stock fund, UPRO. Then it's got 25% in PFF, a preferred shares fund, and 22.5% in gold, GLDM. It was up 0.50% for the week. It is up 14.33% year to date, but is down 12.86% since inception in July 2020. Making things up in a hurry these days. We'll be distributing $36 out of it for February. That's at a 6% annualized rate. And it'll come from the bond fund TMF, which has been performing well recently. That'll be $68 year to date and $1,893 since inception in July 2020. Next one is the aggressive 50/50. This is our most levered and least diversified portfolio. It's got 33% in a levered stock fund, UPRO, 33% in the levered bond fund, TMF, and the remaining third divided into intermediate term treasuries and a preferred shares fund. It was up 4.39% for the week and was up 16.42% year to date. It is still down 19.34% since inception in July 2020. We'll be taking $33 out of it for February. That's at a 6% annualized rate from the bond fund. TMF is where it's coming from. So that'll be $62 year to date and $1,895 since inception in July 2020. And finally our last one is the levered golden ratio. This one is 35% in a composite fund called NTSX, that's the S&P 500 in Treasury bonds levered up 1.5 to 1. It's got 25% in gold, 15% in a Reit, oh, 10% each in a levered bond fund, TMF, and a levered stock fund, TNA, that's a small cap fund. And the remaining 5% is divided into a volatility fund in Bitcoin. It is up 0.67% for the week. It is up 9.94% year to date and down 15.83% since inception, which was in July 2021. We'll be distributing $32 out of it from the Gold Fund GLDM for February. That's at a 5% annualized rate. It'll be $61 year to date and $871 since inception. And that concludes our portfolio reviews. And just in time, because now I see our signal is beginning to fade. Just one announcement, as I've been announcing, I'll be attending a conference called the Economy Conference in Cincinnati, Ohio on the weekend of March 17th. There'll be a bunch of speakers on various financial independence topics, and I'll be running a little breakout session about withdrawal strategies. And I hope to see some of you there. It is run by my good friend Diana Merriam. And I'll link to that in the show notes again. In the meantime, 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 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.

Mostly Voices [43:58]

That would be great. Okay.

Mostly Uncle Frank [44:02]

Thank you once again for tuning in. This is Frank Vasquez with the Risk Parity Radio signing off.

Mostly Voices [44:08]

Millions of people living in a world. it's not too late. Learn out of love and forget I do.

Mostly Mary [44:37]

And the world not me who want to new play I'm going after all got a crazy 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.