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 [0:18]

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 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. Expect the unexpected. There are basically two kinds of people that like to hang out in this little dive bar. You see in this world there's two kinds of people my friend. The smaller group are those who actually think the host is funny regardless of the content of the podcast. Funny how? How am I funny? These include friends and family and a number of people named Abby. Abby someone. Abby who?

Mostly Voices [1:22]

Abby normal. Abby Normal.

Mostly Uncle Frank [1:32]

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.

Mostly Voices [2:03]

What we do is if we need that extra push over the cliff, you know what we do? Put it up to 11. Exactly.

Mostly Uncle Frank [2:10]

But whomever you are, you are welcome here.

Mostly Voices [2:15]

I have a feeling we're not in Kansas anymore. But now onward, episode 294.

Mostly Uncle Frank [2:23]

Today on Risk Parity Radio, it is time for our weekly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com on the portfolios page. And we're also going to talk about monthly distributions for October. I'm putting you to sleep. Just a little preview of that. Fire and brimstone coming down from the skies.

Mostly Voices [2:48]

Rivers and seas boiling. 40 years of darkness, earthquakes, volcanoes, the dead rising from the grave. Yes, it was one of the worst weeks in the worst month of the whole year.

Mostly Uncle Frank [3:01]

And it seems like deja vu all over again from last September when we really hit rock bottom around September 30th.

Mostly Voices [3:12]

But before we get to that, I'm intrigued by these, how you say, emails.

Mostly Uncle Frank [3:16]

And we're gonna have one of those episodes where our entire email answering session is consumed by just one email in response.

Mostly Voices [3:23]

Don't be saucy with me, Bernaise. And so... First off, second off, last off.

Mostly Uncle Frank [3:32]

First off, second off, and last off. We have an email from Jeffrey.

Mostly Mary [3:43]

And Jeffrey writes, Can you please explain more about the 4% withdrawal rate? Is it only 4% because that is only what you could withdraw until the worst times? I believe there were times like the early 80s when you could have withdrawn 10% plus for 30 years, if I'm correct. For instance, if your average return was, say, 8% over 30 years, why couldn't you take 8% a year out? I do know that down years at the beginning of their retirement is bad as taking 4% out would become 8% if your portfolio was cut in half. Please help. Thanks, Jeff.

Mostly Uncle Frank [4:29]

All right, this is a most excellent topic and I don't believe we've talked about it for a while, but it does bear reviewing because the 4% rule is one of the most misunderstood and misapplied rules in financial planning, especially amongst people who've just encountered it or just learned about it from common personal finance sources. Because it's actually not a rule at all. What it actually is is the answer to a very specific question. You could ask yourself a question. Let's talk about what that question was. A very specific question about a specific portfolio and a specific time frame and a specific withdrawal mechanism. All right, what was the specific portfolio that we're talking about here? The specific portfolio is a portfolio that is 50% S&P 500 and 50% intermediate treasury bonds. The same analysis has also been done using a total bond fund. But the original specific portfolio involved was 50% S&P 500 and 50% intermediate treasury bonds. That's the fact, Jack. That's the fact, Jack. What was the specific time frame? The specific time frame involved here is 30 years. and what was the specific withdrawal mechanism? The specific withdrawal mechanism was to start at some flat percentage of the portfolio and then increase withdrawals every year by the rate of inflation as reported by the CPI. And so the rule requires that the holder of the portfolio spend that much money and increase it by that rate every single year. Under that parameter, you are not allowed to ever spend less than an initial percentage amount plus the accumulated rate of inflation. And you are also never allowed to count any other income in this. Note that the 4% applies only to the first year. You do not look back at the total of the portfolio and adjust based on it every year. That would be a different withdrawal mechanism. All right, so what was the specific question then asked about that portfolio applying those rules? The specific question asked was historically looking at every year you could possibly start a 30-year retirement. What is the worst case scenario or lowest percentage that would be applied to any year that would still allow you to complete a 30-year time frame without running out of money? And the answer to that question when this analysis was first done in 1994, and I'll link to the paper that's involved, the answer to the question A worst case scenario was 4.1%, which has been rounded to 4%. And when did that occur? That occurred in the period around 1966 or 1967. If you would have retired then with this portfolio and those withdrawal rules, you could only have taken out 4% annually for the next 30 years and not run out of money. that was the worst case scenario out of all of the historical periods tested, which went back to the 1920s. All right, so what does that mean? Well, first, as you've observed, in fact, in most years that you started a retirement, you could take out more than 4% plus inflation. In fact, in some of those years, you could have started with an 8% withdrawal rate or a 10% withdrawal rate. And if you look at all of the starting dates going back to the 1920s, and you took an average of the answer to that question for all of those dates, it would have been around 6%. And so what that means is 4% starting with those parameters is in fact a very conservative withdrawal rate. In fact, it's so conservative that in most years, if you only are taking out 4% plus inflation, you are going to end up with several times what you started with. You will die at your highest net worth in most circumstances. The only trouble is you do not know at the point of retiring whether you are beginning a good period for this or a bad period for this. If you knew that, then yes, you could take out more without thinking about it. But as Bill Bengen said in his paper, It was therefore based on this study that for early retirees in particular, which he defined as anybody retiring before age 60 at the time, this was a good rule of thumb to start with that they're starting withdrawals should be only about 4%. It's interesting part of what you're saying is in fact what financial advisors were telling clients back in the early 1990s when Bill Bengen did his study, which was that they could take out around 8% annually because that was the, quote, average, unquote, return of a typical portfolio. And that was what Bill Bengen sought to debunk because it was not factoring in a worst case scenario. And for his troubles back in the 1990s, he got lots of hate mail. Because the financial services industry and the gurus that be never like to be contradicted by actual facts and data, especially from some engineering guy from MIT. Kind of ruins their marketing angles.

Mostly Voices [10:43]

Only one thing counts in this life. Get them to sign on the line which is dotted.

Mostly Uncle Frank [10:51]

What's kind of funny is now Bill Bengen says, well, if you have a better portfolio, you can get a safe withdrawal rate of about 4.7 or 4.8%. Yeah, baby, yeah! Which now gets him lots of derision from all kinds of portfolio pessimists in the crowd who doesn't want you to spend your money. Just remember, the more you accumulate, the higher the AUM fee. I drink your milkshake. I drink it up. And over time that became a rule of thumb that people like to follow and talk about because it also gives you a very nice way to estimate how much you need to retire because the inverse of 4% is 25. So you could say that you had enough to retire when you had accumulated an investable or invested assets 25 times your annual expenses at the year of retirement. And if you have that amount of money saved, you are probably oversaved because chances are your retirement will not be a worst case scenario, but will be an average case scenario. But now this leads us to another set of questions or ideas within this methodology. And this is a place where most Amateurs get it wrong. They assume that the 4% rule applies to all portfolios in all circumstances and all withdrawal mechanisms. Wrong! That's just not true. Wrong? Wrong! Right? Wrong! Wrong! It's still a decent estimate for how much you need to be oversaved. But if you want to calculate a safe withdrawal rate, remember you have to go back and set up the parameters to begin with. And so you're going to have a different calculation and a different safe withdrawal rate if you change the portfolio, you are going to have a different calculation and a different safe withdrawal rate if you change the time frame. And you are going to have a different Calculation and a different safe withdrawal rate if you change the withdrawal mechanism, if it's not just adding CPI inflation every year, but you're doing something else. That is the straight stuff, O' Funkmaster. And Bengen made that observation to begin with in the original paper because he also analyzed, well, what if it wasn't a 50% S&P 500 50% Treasury bond portfolio? What if we went to 0% stocks and 100% bonds, or 25% and 75% both ways, stocks and bonds? And when he ran that analysis, he saw that in fact, the safe withdrawal rate was the highest when you had between about 50 and 60% in the stocks and the rest of it was in bonds, and that the safe withdrawal rate was less than 4%, if you had, say, 100% stocks and even less than that if you had 100% in bonds. Now over the years others have run other analyses, but what they basically come up with is that the sweet spot for safe withdrawal rates or higher safe withdrawal rates is somewhere between 40 and 70% held in stocks and then the rest in other things. And so one of the main questions we ask here on this podcast is What if I used a different portfolio and just kept the same time frame and kept the same withdrawal mechanism just for comparison purposes so we can compare apples to apples and only change one variable at a time? What if we used different portfolios? Would we get different safe withdrawal rates? And the answer is yes you do. Yes.

Mostly Voices [14:57]

That when you have more diversified portfolios,

Mostly Uncle Frank [15:01]

you can get higher safe withdrawal rates. When you have less diversified portfolios or portfolios that say are heavy in cash, you get lower safe withdrawal rates doing this same calculation. Now we do not have data for all different kinds of portfolios going back to the 1920s. But we do have data for portfolios that are different mixes of stocks, different mixes of treasury bonds, and portfolios that have gold in them going back to the 1920s. And so if you change those mixtures and run this same kind of analysis going back to the 1920s, you can come up with portfolios that the answer to the question is not 4%, but 5%. Surely you can't be serious.

Mostly Voices [15:54]

I am serious. And don't call me Shirley.

Mostly Uncle Frank [15:57]

What does that kind of portfolio look like? Well, a basic portfolio that looks like that would be 27.5% in an S&P 500 fund, 27.5% in a small cap value fund, totaling 55% in stocks, and then add 30% in Intermediate and long-term Treasury bonds, and then add 15% in gold. I love gold. That kind of portfolio has a safe withdrawal rate going back 100 years of 5% over a 30-year time frame using the withdrawal mechanism of adding CPI-based inflation to it every single year. and never reducing it. That was the worst case scenario for that kind of portfolio. The best, Jerry, the best. All right, let's put that parameter aside for a moment and just talk about the time frame. One of the things I hear many amateurs say is, well, if it only works for 30 years and I'm gonna be retired for 40 years, doesn't that mean I get to throw the whole thing out and it doesn't work at all and I can run around screaming with my hands in the air?

Mostly Voices [17:11]

Human sacrifice, dogs and cats living together, mass hysteria. Doesn't my portfolio turn into a pumpkin after 30 years? You can't handle the dogs and cats living together. And the answer is no, that's not how it works.

Mostly Uncle Frank [17:26]

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

Mostly Voices [17:29]

That's not how any of this works.

Mostly Uncle Frank [17:33]

If you do the calculations, and you should do the calculations, because you can do the calculations that places like Portfolio Visualizer, which I never hear these complainers actually doing. They just like to complain. You will find that if you increase it to 40-year time period, it's probably going to reduce the safe withdrawal rate by about 0.3. And if you extend it out to 50 years, it's probably going to reduce the safe withdrawal rate by about 5 or 0.6. So that same portfolio I was talking about that has a 5% safe withdrawal rate for the past 100 years, over a 30-year time period, over a 40-year time period, it has a safe withdrawal rate of about 4.6 or 4.7. Over a 50-year time period, it has a safe withdrawal rate of about 4.3 or 4.4. It never goes below 4%. It never turns into a pumpkin. And in fact, you can do another calculation called the perpetual withdrawal rate, which basically says, what if I want it to last forever? And you can run those kind of calculations at Portfolio Visualizer and Portfolio Charts. All right, now let's go back and look at the third parameter. Gosh. Remember, the third parameter was the mechanism for the withdrawals, that we're going to start with a flat withdrawal and add CPI inflation to it every year and never reduce it. Now that assumption was used because it was very easy to calculate. However, that assumption is conservative in an unto itself because nobody actually withdraws that way or almost nobody. In fact, studies have shown that if you're going to use an inflation-based addition to withdrawals, an average retiree would be withdrawing essentially CPI minus 1% as their personal rate of inflation. So what if you just made that adjustment? Instead of saying we're going to add CPI and rate inflation every year, we add CPi minus 1% every year instead. What effect does that have on the safe withdrawal rate? Well, it tends to increase the safe withdrawal rate of these portfolios by about half a percent. So if you are an average retiree doing an average spending plan using just this simple 50/50 portfolio over 30 years, your safe withdrawal rate is actually more like 4.5%. and as you can imagine, there are many different other ways of doing withdrawals from a portfolio where you are varying the amount you are withdrawing, either based on your personal circumstances or based on market performance or both. And a lot of those were modeled in a Morningstar report from December of 2022 or perhaps November. I will link to it again in the show notes. where they tried out a bunch of these different withdrawal strategies or withdrawal mechanisms on a variety of portfolios. And they basically tended to increase the safe withdrawal rate of most of these basic kind of stock bond portfolios by about 0.5 to 1.2%. And so what does that all mean? Well, in sum, your personal safe withdrawal rate is not going to be what it says in this study. And if you make intelligent choices about the portfolio you choose to hold, no more flying solo, and the withdrawal mechanism you choose to use, you need somebody watching your back at all times, it should be significantly higher than 4%.

Mostly Voices [21:29]

Groovy, baby.

Mostly Uncle Frank [21:33]

Over a 30-year time frame, or if it's longer, you need to account for that as well. If it's shorter, you need to account for that as well. But that time frame adjustment, even if it's a decade or two, is not going to be of the same magnitude as picking a better portfolio to start with or picking a variable withdrawal mechanism to use. But it also does tell you that whatever strategy you think you're adopting in terms of your portfolio and withdrawal mechanisms, you need to go test that thing. We have data, all kinds of data. We have all kinds of calculators, some of them going back 100 years. If you haven't tested your portfolio, you're just guessing as to what its safe withdrawal rate is over a given period of time. But this is also why many popular retirement calculators out there are inadequate or obsolete or a combination of those two things. Because they simply do not have all of the data you would want to have to analyze a particular portfolio. If your calculator only has stocks and bonds in it or stocks, bonds, and cash, that is not up to snuff. that's not good enough to be basing your retirement on in the 2020s. Go use these free resources we have：Portfolio Visualizer, Portfolio Charts, download the tool box from Early Retirement Now, use the right tools for the job. Don't rely on some other calculation about some other portfolio if you are not holding that specific portfolio. And if you do a decent job with portfolio construction and looking at the withdrawal mechanisms you actually plan to use, there's no reason most people can't have a 5% safe withdrawal rate if they wish to have that. Now it's less common than it used to be, but there is still a tendency of the over-saved crowd to compete as to how low a safe withdrawal rate they can have. They talk about 3%, 2%, 1%. If you are doing that, all you are saying, your revealed preference as economists say, is that you want to die with the most money possible. That is what your plan is, to die with the most money possible. Everything that has transpired has done so according to my design. Or you just have a very bad portfolio construction that probably has too much cash in it or too many stocks in it or some combination thereof. Are you stupid or something? Stupid is what stupid does, sir. because those kind of portfolios do tend to have historical safe withdrawal rates closer to 3%, usually 3.3% is kind of the min you get by those combinations. And that would be your safe withdrawal rate if you had a 100% total stock market or S&P 500 portfolio. Okay, you may be asking then, well how does this idea of a Monte Carlo Simulation fit into all of what I've been talking about. And just so you understand the difference between what we've been talking about in a Monte Carlo simulation, what we've been talking about is the actual historical data, just looking at it as it lies, going back as far as the data we have, about a hundred years now for some of it, more like 50-some for other sets of it. But a Monte Carlo simulation is asking a slightly different question, It is saying, what if we scramble up this data? So instead of it going from 1926 until now, we did year 1951, then 1973, then 1928, then 2003, and ran a simulation with some randomized series of data. And then we did that like 10,000 times, scrambling this data up in all its different ways of parameters you could do it. If you do that, you end up with a range of worst randomized outcomes to best randomized outcomes. In fact, those very worst randomized outcomes have never occurred and probably never will occur because they forecast having all of the bad years for the past 100 years. in a row. And those best outcomes have also never occurred because they contemplate having all of the best years of the past 100 years in a row. So typically when somebody is using a Monte Carlo simulation, they basically say, well, we don't really care about these 0 to 10th percentile outcomes that have never occurred and are not likely to ever occur. And so having a 90% success rate, which is a misnomer, but that's what they call it, is good enough. And that's what most financial advisors would tell you. But that's how a Monte Carlo simulation and calculation of a safe withdrawal rate relates to the historical calculation of a safe withdrawal rate. Where this all comes full circle is back to what you were suspecting or intuiting when you asked your question, which was, isn't it true I can probably actually take out more money than the 4% rule would suggest? And the answer to that is yes. I did not know that. I did not know that. But that's also why that 4% is still a good estimate for how much you need to save to be over saved for retirement. because once you do that, you can manage away the other issues. You can manage your portfolio to be a better one for withdrawing from. You can manage the way you would take your withdrawals and vary them over time. And both of those things will give you additional insurance to know that you're not going to run out of money. Now you often hear people say, well, I need to be saved 30 times or 33 times or some other number. That is actually not that much different from 25 times. The reason you think it's different is because you're thinking of the dollars themselves and you're not thinking about compounding. If you're thinking about this in terms of compounding, it takes just as much compounding to go from five times to six times as it does to go from 25 times to 30 times. And that's usually only a few years more of compounding. Inconceivable! And during retirement, your portfolio is likely to swing rather wildly. Suppose you had saved 25 times before you started retiring. It could go down to 22 times, or even 20 times, or it could go up to 30 times just over the course of a few years of market fluctuations. That would be normal. But that's also why you only need to be in the ballpark here. and trying to be too precise on exactly how much you've saved, it's probably not a worthwhile endeavor. Which gets me to my last point. Shut it up, you! Which is a point about statistical variations in an uncertain future. Basically something that's called the bias variance dilemma in statistics, which says that if you have a set of data that you're trying to make future predictions from, The more precise you try to be, especially in terms of individual outcomes, the more likely you are to miss the mark, the higher the bias you're going to have. But the more variance you're willing to tolerate, the more likely you will be to be in the right ballpark. There's an excellent book called Risk Savvy by a German fellow named Gerd Gigerenzer. that explores this topic and basically concludes that rules of thumb are often much better to use when you are dealing with uncertainty as opposed to just mere risk that you could measure with volatility. And so that a rule of thumb like the 4% rule is actually just as good or better than some very detailed calculation coming out of some retirement calculator where you're putting in 17 different parameters. Because the more parameters you stick in there, the more precise you're going to be and the more precisely wrong you're likely to be. This is often explained in terms of a dartboard, that using the rule of thumb will get you darts that land all around the bullseye and maybe some in the bullseye. But they're spread out. When you try to use precision to predict the future with lots and lots of variables, what happens is all of those darts would end up in the same place, but it would not be near the bullseye. In fact, it could be anywhere on the dartboard or even off the dartboard. You'd be very precise and precisely wrong. That is not something most people want to hear. In fact, we all have been trained, particularly if you've been trained in the sciences, that the more data you have, the better decision you can make. In fact, in a world of uncertainty, that's not really true. The easiest way to think about that is, what do you think the weather will be in your location a year from now? You could make all kinds of detailed predictions attempting to focus on exactly what that temperature would be. Or you could just use the rule of thumb, look at what it's been historically for that particular season of the year, and say, well, it's going to be about that, and that's the best I can do in terms of predicting it a year in advance. That is the same kind of thing you're doing when you are thinking about these retirement issues and using things like the four percent rule. if you were worried about it being too cold, you'd be saying, well, what's the coldest it's been here on that date or in that season? And what's the hottest it's been on that date or that season, if that was your concern. And we recognize that is the best we can do. And then we are just going to make adjustments when we get there, when we're thinking about the weather next year. But somehow we can't translate that into Retirement planning because we have this obsession with being exactly precise, even though trying to do that will actually give us more inaccurate results. Very precise and precisely wrong, as I like to say.

Mostly Voices [33:07]

My mom always said, Life was like a box of chocolates. You never know what you're going to get. Anyway, I've carried on about this topic for far too long. You are talking about the nonsensical ravings of a lunatic mind. With a rant here and there. You're too stupid to have a good time.

Mostly Uncle Frank [33:43]

But it's always an excellent topic to revisit and discuss because this causes Lots of confusion and a lot of misuse or misapplication by people that have only been introduced to the topic and are not familiar with the underlying calculations and what they mean and what they don't mean. You will find that it is you who are mistaken about a great many things. And so thank you very much for your email.

Mostly Voices [34:18]

And now for something completely different. What is that? What is that? What is it? Oh, no, not the bees! Not the bees!

Mostly Uncle Frank [34:30]

And yes, the bees appear to be honest once again. I love my eyes! My eyes! This is all making me wonder whether 2020 and 2021 were in fact very bad years to start a retirement in. But we'll only know that in a decade because historically having a couple of bad years at the beginning actually is not the worst time to retire or start drawing down from a portfolio. You really need to have a decade or more of bad data or bad results for that to be the case, like the 1970s or the early 2000s. Anyway, looking at what happened last week in the markets, it was another week of the dollar wrecking ball. The US dollar is, I believe, at its highest value of the year compared to other currencies, and it's showing up in all kinds of different markets. The S&P 500 was down 0.74% for the week. The Nasdaq was actually up very marginally, up 0. 06% for the week. Small cap value represented by the fund VIoV was down 0.30% for the week. Gold was the worst performer. Gold was down 4.08% for the week. Really feeling that strong dollar. Long-term treasury bonds represented by the fund VGLT or Also down again, they were down 2.78% for the week. Interest rates on those are now reaching 15-year highs, which last occurred right before the great financial crisis. Gee, that's a pleasant thought. That's not an improvement. REITs represented by the fund R E E T were down 2.85% for the week. Also not liking higher interest rates. Commodities represented by the fund PDBC were down 1.06% for the week. Preferred shares represented by the fund PFF were down 0.56% for the week. And the only real winner last week again was managed futures. The fund DBMF, our representative fund, was up 1.87% for the week and is up about 5% over the past month. Nice to know for diversification purposes, but not nice to know for what it means in terms of performance of Most other things, but I believe that fund is currently short other currencies against the dollar and short interest rates as well, because it follows the trends. Moving to these portfolios, first one's this All Seasons Portfolio, a representative or reference portfolio. It's only 30% in stocks and a total stock market fund, 55% in intermediate and long-term treasury bonds, and 15% in gold and commodities. It was down 1.57% for the week. It's up 0.93% year to date and down 7.2% since inception in July 2020. It is certainly being hurt by its large allocation to bonds, but on the other hand, they're generating a lot of income now. And so we'll be taking $28 for its distribution, which is at a 4% annualized rate. that will come from cash that has accumulated. That'll be $293 year to date and $1,267 total since inception. Moving to our three kind of bread and butter portfolios. First one's a 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 treasuries. and then 20% in gold. It was down 1.44% for the week. It's up 1.52% year-to-date and up 8.85% since inception in July 2020. We will be taking $39 out of this for its October distribution. That'll also come from accumulated cash. It's at a 5% annualized rate. It'll be $408 year-to-date. and $1,706 since inception in July 2020. And all of these portfolios started with about $10,000 in them. Next one is the Golden Ratio. This one's 42% in stocks divided into three funds, 26% in long-term treasury bonds, 16% in gold, 10% in a REIT fund, REET, and 6% in a money market fund. It was down 2.04% for the week. It's up 1.89% year to date. and up 4.45% since inception in July 2020. We'll be withdrawing $37 out of this. It always comes out of the money market fund in this portfolio, the way we have the management rules set up. That'll be in a 5% annualized rate and for October. It'll be $1,677 since inception and $392 year to date in terms of withdrawals. Next one is our Risk Parity Ultimate. I will not go through all 15 of these funds, but I will say that three of the alternatives in this portfolio have been doing pretty well, including DBMF, BTAL, which is a long short fund, and COM, which is a commodities fund. It was down 1.68% for the week. It's up 2.61% year to date and down 3.03% since inception in July 2020. We are withdrawing from this one at a 6% annualized rate. It'll be $40 for October. It will also come out of accumulated cash. That will be $424 total year to date to $1,920 since inception in July 2020. Now moving to these experimental portfolios involving leveraged funds. We run hideous experiments here, so you do not have to. The money in your account, it didn't do too well, it's gone. First one is this accelerated permanent portfolio. It's got 27.5% in a levered bond fund, TMF. Looks more like less than 20% at the moment. 25% in a levered stock fund to UPRO. 25% in PFF Preferred Shares Fund and 22.5% in gold, GLDM. It was down 3.49% for the week. It's down 2.72% year to date and down 25.86% since inception in July 2020. We'll be taking $29 out of it for the month of October. That will come from cash and that's at a 6% annualized rate based on its current value. That'll be $337 year to date and $2,162 since inception in July 2020. Next one is the aggressive 5050, the least diversified and most levered of these portfolios. It's got 1/3 in a levered stock fund, UPRO, 1/3 in a levered bond fund, TMF, and 1/3 in ballast in preferred shares, PFF, and intermediate treasury bond fund, VGIT. It was down 3.64% for the week. It's down 3.98% year to date and down 33.47% since inception in July 2020. We will also be taking cash out of this $26. It's at a 6% annualized rate for October. And that will be $312 year to date and $2,145 since inception in July 2020. And moving to our last one that's only been around since 2021, the levered golden ratio. This one's 35% in a Composite Fund NTSX, that's the S&P 500 in Treasury bonds. It's got 25% in gold, GLDM, 15% in a REIT, O, 10% each in a levered bond fund, TMF, and a small cap fund, TNA, and the remaining 5% in a managed futures fund, KMLM. It was down 2.55% for the week. It's down 2.68% year to date and down 25.49% since inception in July 2021. We're distributing out of this at a 5% annualized rate, so it'll be $27 from cash for October. And it'll be $302 a year to date and $1112 since inception in July 2021. And that's all she wrote there. I'm glad September is over. It lived up to its reputation as being the worst month of the year for investing. Did not disappoint in that department. Someday I'll figure out how to market time, manage futures, and buy them all at the beginning of September or whenever, and sell them on an appropriate date. No, I won't be doing that. It's just a joke.

Mostly Voices [43:43]

What do you mean funny? Funny how? How am I funny?

Mostly Uncle Frank [43:47]

I'm afraid I don't have a crystal ball, or at least not one that works very well.

Mostly Mary [43:51]

Now you can also use the ball to connect to the spirit world.

Mostly Uncle Frank [43:55]

I just may need to take a trip to the spirit world. The rate things are going here, I think we'll survive. But now I see our signal is beginning to fade. I just got back today from that walk for McKenna, our fundraiser that I've been talking about for the past month. I want to thank all of our patrons on Patreon who contributed to that. Our little logo looks very nice on the back of the t-shirt for all the sponsors. Just below the logo for the local Irish pub that is also a sponsor. And where Mary and I went after the walk with some friends. Anyway, 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 where you can 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, follow, give me some Stars 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 [45:35]

All the people who would keep a song of me 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.