Mostly Voices [0:00]

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

Mostly Mary [0:19]

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

Mostly Uncle Frank [0:36]

Thank you, Mary, and welcome to Risk Parity Radio. If you have just stumbled in here, you will find that this podcast is kind of like a dive bar of personal finance and do-it-yourself investing.

Mostly Voices [0:52]

Expect the unexpected.

Mostly Uncle Frank [0:56]

It's a relatively small place. It's just me and Mary in here. There are basically two kinds of people that like to hang out in this little dive bar.

Mostly Voices [1:07]

You see in this world there's two kinds of people, my friend.

Mostly Uncle Frank [1:11]

The smaller group are those who actually think the host is funny regardless of the content of the podcast.

Mostly Voices [1:22]

Funny how, how am I funny? These include friends and family, and a number of people named Abby. Abby someone. Abby who? Abby normal. Abby normal.

Mostly Uncle Frank [1:33]

The larger group includes a number of highly successful do-it-yourself investors, many of whom have accumulated multimillion dollar portfolios over a period of years. The best Jerry, the best. And they are here to share information and to gather information to help them continue managing their portfolios as they go forward, particularly as they get to their distribution or decumulation phases of their financial life. What we do is if we need that extra push over the cliff, you know what we do? Put it up to 11. 11, exactly. But whomever you are, you are welcome here. I have a feeling we're not in Kansas anymore. But now onward to episode 257. Today on Risk Parity Radio, I think we're just gonna try and clean up the rest of our emails from March. And we have a potpourri of topics here, which are only tangentially related to risk parity, if at all. Shirley, you can't be serious. I am serious. And don't call me Shirley. But you know how some of our regulars are prone to random musings.

Mostly Voices [2:55]

You see, if you go back in history and take every president, you'll find that the numerical value of each letter in their last name was equally divisible into the year in which they were elected. So who's gonna win, Cliff? Reagan again? Mondale? No, no, not a chance. See, I figured it out. And by my calculations, my next president has to be named Yelnic Nikwawa. And so anyway, without further ado, here I go once again with the email.

Mostly Uncle Frank [3:29]

And first off, we have an email from Brian.

Mostly Voices [3:32]

Always look on the bright side of life. And Brian writes.

Mostly Mary [3:43]

I just listened to the Animal Spirits podcast about the Treasury ETFs with more info on them here. Once they launch the 20 and 30 year, do you think these ETFs will be superior to the current ETFs that are common for risk parity, i.e. TLT for long duration and SHY for short duration?

Mostly Uncle Frank [4:02]

All right, I did listen to that podcast. When it came out, and this is about FM Investments benchmark series of treasury bond ETFs, and what they are are individual bonds in an ETF, and they're typically buying the one that is what they call on the run, or is the one currently being offered and traded, the most recent one, if you will. Band on the run, band on the run. And I'm not sure how useful these will actually be, simply because you can open an account at Treasury Direct and be buying the same kinds of bonds. At least if you were going to create a bond ladder of sorts. Now, if you wanted to trade them like you trade stocks, then these would be useful for that purpose. But for the purpose of portfolio construction, we are more interested in kind of baskets of bonds of certain durations. and not very specific bonds. So what you would end up doing if you use this is probably just recreating a bond fund with multiple ETFs over multiple time periods. And I can't see us wanting to do that in connection with constructing or managing a long-term portfolio, especially due to the tax implications you might have of buying and selling such things. This is one of these new products that I'm Curious to see whether anyone actually makes a lot of use of it and who those people are and what exactly they're using it for. I don't think it's a bad idea. I'm just not sure that it's new or different enough to merit anyone's attention in particular. But we shall see. What may be more interesting to this crowd here is an interview they did last week of one of the founders over at Simplify Investments. And they talked about their whole suite of alternative ETFs that we have talked about here from time to time. And these ETFs are focused in particular on alternative investments. And so they have a great potential to be used to diversify portfolios. So example, we've talked about one called TYA, which is a levered version of an intermediate bond fund. They also have another one over there called TUA, which is a levered version of a two-year bond fund. Other useful funds that they've got include CTA, which is managed futures, and PFIX, which is a fund designed to take advantage of rising interest rates and was up something like 92% in 2022. Now, all of these funds in Simplify itself is relatively new. But I think you see where the industry and the ETF industry is going, offering these more esoteric alternatives that would have been very difficult for most investors to get involved with or very costly and they're bringing them out at reasonable costs. Of course, the big question about all of them is how well are they going to perform over time because most of them have been around for two years or less. But I thought the interview that they did of the The gentleman over there was very interesting and useful as to how they envisioned their ETFs to be used. And they said first they thought that the RIA register investment advisor community would be most likely to be using them to help sophisticated clients construct diversified portfolios. And so for me as a do it yourself investor, that's something I want to be following and learning more about as time goes on. Because I have to believe that there's going to be useful things coming out of that that we might employ as do-it-yourself investors, particularly if we're talking about ETFs that are easy to buy and sell. But I will link to that in the show notes and you can check it out. We'll see if I can link to both of those podcasts in the show notes.

Mostly Voices [8:10]

So always look on the bright side of death. Adjust before you drop. For your terminal breath. Second off, we have an email from Alexei. 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 Mary [8:43]

And Alexei writes, I was thinking, is it time you worked some flight of the concord sound drops into the pod? Would fit squarely into your and my humor sweet spot, I would think. AZ.

Mostly Voices [8:58]

Counting coins on the counter of the 7-Eleven from a quarter past six till a quarter to seven. The manager, Bevan, starts to abuse me. Hey, man, I just want some muesli. Neon signs, hidden messages, questions, answers, fetishes. You know you're not in high finance considering secondhand underpants. Well, thank you for welcoming me back.

Mostly Uncle Frank [9:20]

This was after I had gone to the Economy Conference and had fewer podcast releases in March.

Mostly Voices [9:23]

Hey, Bowen, do you have one really funky sequenced spacesuit, or do you have several cha-changes?

Mostly Uncle Frank [9:32]

As to your request, I'll see what I can do here.

Mostly Voices [9:35]

And if you want me to, I will take off all my clothes for you. I'll take off all my clothes for you, if that's what you're into.

Mostly Uncle Frank [9:46]

How about him in the nude, if that's what you're into. But one thing you have to realize is that my knowledge of pop culture and particularly television after the 1990s is pretty limited. If it's cool with you, I'll let you get naked too.

Mostly Voices [10:03]

It could be a dream come true, providing that's what you are into.

Mostly Uncle Frank [10:07]

It has only gotten worse in the past decade to 15 years.

Mostly Voices [10:11]

and then maybe later we'll get hot by the refrigerator in the kitchen next to the pantry. You think that might be what you fancy. With my consumption habits have shifted largely to podcasts and other things that I find on the internet. All the things I do, things I do for you. If I only knew, that's what you're into.

Mostly Uncle Frank [10:40]

But again, I'll see what I can do. What happened there?

Mostly Voices [10:44]

Did I do something wrong? I don't know, I couldn't really see. I did all my moves. I walked on the outside of her. I bought her a kebab. I paid for half the taxi. Should I have paid for the whole taxi? Should I have paid for the whole taxi? I don't know there. I'm going to sleep.

Mostly Uncle Frank [11:04]

Next off, we have an email from another regular in the bar today. My contact info.

Mostly Voices [11:11]

Oh, I didn't know you were doing one. Oh, sure.

Mostly Uncle Frank [11:15]

And my contact info writes.

Mostly Mary [11:18]

Frank, welcome back. Not sure if it makes sense for your podcast, but would look forward to your views on Medicare gap policies versus Medicare Advantage policies. My sense is that proper analysis requires a solid understanding of insurance And thus the comparison and understanding the differences between these types of policies has broader value. Observation, one of the products is advertised more intensively. Thank you.

Mostly Uncle Frank [11:47]

Now I have to say, this is something I know very little about. Man's got to know his limitations. And I tell myself I can know very little about it because I'm not 60 yet. That's not an improvement. But instead of making something up, Shut it up, you. I enlisted artificial intelligence to make something up. Look, it's MacGyver. And the choice was whether to go with Bard from Google or ChatGPT. And I went with Bard because Bard claims that ChatGPT is more creative and writes better fiction, but that Bard is better informed. because it has a more updated database. But let me give you the results from Bard as to the question about the difference between Medicare Advantage and Medicare Gap policies. Bard says, Medicare Advantage and Medicare Gap are two different types of Medicare coverage. Medicare Advantage is a private health insurance plan that provides all of your Part A and Part B benefits, and many also include Part D, prescription drug coverage. Medicare GAP, also known as Medigap, is a type of supplemental insurance that helps pay for some of the cost of original Medicare, such as co-payments, deductibles, and coinsurance. Here is a table that summarizes the key differences between Medicare Advantage and Medicare GAP. First feature, type of coverage. Medicare Advantage is a private health insurance coverage. Medicare Gap is a supplemental insurance coverage. Feature number two, benefits. Medicare Advantage covers all of your Part A and Part B benefits, and many also include Part D prescription drug coverage. Medicare Gap helps pay for some of the costs of original Medicare, such as co-payments, deductibles, and co-insurance. Feature number three, costs. Medicare Advantage has monthly premiums that vary but are typically lower than the combined cost of original Medicare and a Medigap policy. Medicare Gap has monthly premiums that vary but are typically higher than the cost of original Medicare alone. Feature number four, network. Medicare Advantage plans have networks of doctors and hospitals that you can use. You may have to pay more if you see a doctor or go to a hospital outside of your network. For Medigap, you can see any doctor or go to any hospital that accepts Medicare. Number five, prescription drug coverage. Some Medicare Advantage plans include prescription drug coverage while others don't. If you need prescription drug coverage, make sure the plan that you choose includes it. For Medigap, you can buy a standalone Part D prescription drug plan. drug plan or can get a prescription drug coverage through a Medicare Advantage plan. And then, as always, these AIs always say things like this at the end. If you're not sure what type of Medicare coverage is right for you, talk to your doctor or a Medicare licensed insurance agent. And finally, the warning at the bottom. Bard may display inaccurate or offensive information that does not represent Google's views.

Mostly Voices [15:05]

You can't handle the tractor!

Mostly Uncle Frank [15:11]

Well, I don't know if what it had to say was accurate or not. It sounded accurate based on my limited understanding. Certainly it was not offensive this time. But that concludes our foray into artificial intelligence for this topic.

Mostly Voices [15:32]

That and a nickel will get you a jack squat!

Mostly Uncle Frank [15:36]

It's interesting, I've played around with these things a little bit, but what it really seems to me is that what they typically write back in terms of an answer looks like a promotional or marketing brochure for somebody who wants to sell you something or sell the service to you.

Mostly Voices [15:56]

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

Mostly Uncle Frank [16:03]

And there always seems to be some kind of steering at the end about talking to some agent or some dealer or some other advisor or other person. A guy don't walk on the lot lest he wants to buy. Which kind of makes sense when you think about it because so much of what is publicly available about any topic involving something that a consumer might buy is in fact marketing material or something related to marketing material or a media article that feeds into marketing.

Mostly Voices [16:40]

They're sitting out there waiting to give you their money or you're gonna take it. So at this point, I'm not worried about AI taking over the world. I am worried about what they're trying to sell me. Because only one thing counts in this life. Get them to sign on the line which is dotted. And the best advice I could give you about it is caveat emptor. Am I right or am I right or am I right? Right, right, right. And thank you for your email. Last off.

Mostly Uncle Frank [17:12]

Last off, we have an email from Cassip and Cassip writes,

Mostly Mary [17:17]

Hi, Frank. I love your show. I'm a resident alien in the United States under a work visa, and I plan to retire back to my home country, which doesn't have a tax treaty with the United States. My question is, is it even worth investing in a tax-advantaged account if I'll be taxed anyway in my home country since they don't recognize the special tax treatment of the 401k? Thanks.

Mostly Uncle Frank [17:57]

I probably should not have played that clip that I just played from Genesis, as it goes with a video that is a cartoonish depiction of people from Mexico. Much like Speedy Gonzalez or the Frito Bandito. Fairly cringe-worthy watching Phil Collins with a big bushy fake mustache and a sombrero, which is why we should probably leave that behind.

Mostly Voices [18:33]

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

Mostly Uncle Frank [18:40]

As to your question, your tax question is also taxing my knowledge base. Man's got to know his limitations. And I probably should have asked Bart about this one too, but I didn't. I think you're probably right that it's probably not worth it to be using a 401k in your situation. My experience is that 401ks Do not play well for people outside the United States unless they're American citizens who are going to come back. Or if you are buying a security in a 401 that withholds taxes like a Canadian company might do, you're going to be SOL there, too, in trying to get your money back. So certainly do not take this as tax advice, but I think you are probably correct.

Mostly Voices [19:28]

You are correct, sir, yes.

Mostly Uncle Frank [19:32]

I apologize for my uninformed answer to your question, but thank you for your email.

Mostly Voices [19:38]

I award you no points, and may God have mercy on your soul.

Mostly Uncle Frank [19:43]

And now I see our signal is beginning to fade. Hopefully next time we'll begin into the emails that came in in April, and there were a number of them. But 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 follow, a review. That would be great. Okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Parity Radio signing off. The gods have chosen. Tushabalba?

Mostly Mary [20:44]

Tushabalba. 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.