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 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 [1:38]

But now onward to episode 308. Today on Risk Parity Radio, I think we'll just do what we seem to do best here, which is answer your emails. Shirley, you can't be serious. I am serious. And don't call me Shirley. And so without further ado, here I go once again with the email. And... First off, we have a set of three emails that are very similar in tenor from Ralph, Scott, and Eric.

Mostly Voices [2:12]

Oh my god, Eric? Well what's wrong with him? I'm afraid that your son is incredibly stupid. He thought he could fly with cardboard wings. The stupidity is so severe that it caused a fall, which has put him into a deep coma.

Mostly Mary [2:28]

And Ralph writes：hi Frank, is everything okay? Are you still alive? Last episode was on November 19th, and since then I've been checking my player daily to see if a new episode was available. It's been almost a month and nothing. Hope everything is fine with you. Merry Christmas to you and Mary. Well, you haven't got the knack of being idly rich.

Mostly Voices [2:47]

You see, you should do like me, just snooze and dream, dream and snooze. The pleasures are unlimited.

Mostly Uncle Frank [2:54]

And Scott writes, okay, Peter, I guess

Mostly Mary [2:59]

you are just going to stop going. Where are you at? I am missing your podcasts. So you're gonna quit? Nah, not really. Uh, I'm just gonna stop going. So are you gonna get another job? I don't think I'd like another job. And finally, Eric writes. Uh, what? Just want to say thanks for your ongoing efforts to share your knowledge with others. Really enjoy the content and the sound bites. All the best, Eric.

Mostly Voices [3:35]

What does Matt Damon say on that Bitcoin commercial? Fortune favors the brave. My dad said he listened to Matt Damon and lost all his money. Yes, everyone did, but they were brave in doing so. And these are all from the beginning of the month.

Mostly Uncle Frank [3:46]

Thank you gentlemen for looking in on me.

Mostly Voices [3:49]

You can't handle the crystal ball.

Mostly Uncle Frank [3:53]

I have returned, like Douglas MacArthur. I have returned. From tilting at windmills in an arbitration hearing. Mr.

Mostly Voices [4:04]

Keyrock, are you ready to give your summation? It's just Key Rock, you, Honor, and yes, I'm ready. Thank you. Ladies and gentlemen of the jury, I'm just a caveman. I fell in some ice and later got thawed out by some of your scientists. Your world frightens and confuses me.

Mostly Uncle Frank [4:31]

It's very nice to know that I am appreciated. And Mary too. I'm glad to know that you are still enjoying the sound bites. At least some of you.

Mostly Voices [4:55]

You can't handle the truth.

Mostly Uncle Frank [4:58]

It gives me the greatest collection of both One star and five star reviews. If you haven't left one, please do leave one. Hopefully of the five star variety.

Mostly Voices [5:12]

This is pretty much the worst video ever made. You guys are retarded.

Mostly Uncle Frank [5:16]

But that is the nice thing about having a small devoted audience and not having to please any kind of sponsor. Ooh, how convenient.

Mostly Voices [5:28]

Or rating service or the public at large.

Mostly Uncle Frank [5:32]

Well, neighbor, I see you've got your running shoes on. That's a good thing.

Mostly Voices [5:37]

Release the hounds. What's wrong with grit blue? Oh, he's getting on, sir. He's been here since. the late 60s. Ah, yes. I'll never forget the day he bagged his first hippie. That young man didn't think it was too groovy. I should be able to continue with these at a pace of about two per week, at least for the next few weeks here, and then there will be another hiatus at the end of January.

Mostly Uncle Frank [6:14]

But it should all be good until then. Thank you for your support and thank you for your emails.

Mostly Voices [6:22]

Follow in his name to the holy grail of righteous victory. Second off.

Mostly Uncle Frank [6:33]

Second off we have an email from the mysterious visitor 9575. And the mysterious visitor9575 from Kalamazoo, Michigan writes：Please review this podcast on withdrawal rates. All right, so this was a reference to a podcast from the Inflation Guy that appeared last month. And this is somebody who comments extensively about the CPI and inflation and has a model to predict future inflation and all sorts of inflation related things. He has a blog and a newsletter. And anyway, somebody had asked him about inflation and safe withdrawal rates, and I did go listen to his podcast about it, and I will link to that in the show notes. But anyway, I did not find it terribly illuminating. It sounded like he had not really done much thought or research in this area since about 2010 or 2011. So he talked about the original BEngin study and the Trinity study after that, and then some work he had done trying to incorporate TIPS into that kind of analysis. And all he concluded from what he did back in 2010 or 2011 was that TIPS helped if your withdrawal rate was really low and they didn't help if your withdrawal rate was high. So what he seemed to be missing was that there's been a lot of work done since that time and a lot more tools that are easily available such as Portfolio Visualizer and Portfolio Charts. And the Toolbox Calculator you can download from Early Retirement Now. And as we talked about here ad nauseam, the real questions come down to what are the safe withdrawal rates for different kinds of portfolios and how do we apply things like factor investing. to those portfolios, the use of alternative assets and other similar and sundry related ideas.

Mostly Voices [8:50]

Yes!

Mostly Uncle Frank [8:54]

He did not specifically talk about how to model inflation in this kind of modeling. The best and easiest way to deal with it is to use real rates of return, which is to apply the specific inflation rate that applied in whatever data set that you're using from whatever time period that was. And the reason you want to do it that way is because those economic environments also impact the performance of the various assets in those economic environments. So those things go together. They are not independent variables. You do not have high inflation in a depression. And if you go back to some of our original episodes, The theory that all of this operates on is that different economic environments favor different kinds of assets in terms of performance, like the weather. And typically those environments are categorized by rising inflation and rising growth or falling inflation and falling growth or some combination thereof. And that's what feeds into the probability that a particular asset will perform well in an environment like that. and then also the correlation or lack of correlation between the different asset classes, which perform differently in different environments involving these macro factors. So I suppose my comment on that podcast was, well, it was interesting as far as it went, but it didn't really go that far. But I do think that is a problem with a lot of financial media, that they essentially are more interested in the media aspect of this than the finance and the learning aspect of this. which means that oftentimes people in the financial media and on podcasts and things have not updated their information set from a decade ago or more, and they're still relying on kind of hoary old ideas from the year 2000 or somewhere around there. And you can usually tell when you're dealing with somebody like that when they only cite the original Bengen paper and the Trinity study, that means that they have not appreciated everything that's gone on in terms of these kinds of analyses since those studies were done. And even Bengen himself says that if you have a better portfolio, you could have a safe withdrawal rate of 4.7 or 4.8%. And if somebody is not aware of even that research, you have to believe that they're really not up to speed on these sorts of things. Forget about it. So I'd say it was interesting as far as it went, but it didn't go very far. If you have any more questions about it, or a particular something or other he mentioned, please go ahead and write in again and ask me and we can deal with that specific question. And thank you for your email.

Mostly Voices [11:56]

Last off. Last off, an email from Steven. Hey, Steve.

Mostly Mary [12:33]

And Steven writes, Sometime in January 2024, I'm hoping that you can update your sample portfolio's monthly performance table and each of the sample portfolio performance charts to span through the end of 2023. I think many who learn from your website, including me, would benefit from seeing how the sample portfolios have progressed through 2023. Thank you for all of your work at teaching us about DIY investing with the risk parity style of portfolio. I hope you were able to find suitable topics for more podcasts, and your absence since mid-November is not due to a health or family emergency issue. Have some great experiences for the holidays, Stephen. Well, Stephen, thank you for your encouragement.

Mostly Uncle Frank [13:16]

You are correct that I am somewhat behind the times in terms of updating some of my bits and pieces on the website there. You are correct sir, yes!

Mostly Voices [13:30]

But yes, I did plan to update that once all of the annual

Mostly Uncle Frank [13:35]

returns were in, so that would make it easier. And we also have an annual review coming up anyway, which I may or may not do this weekend depending on whether I've gotten all of the stats in from the various places on this. I probably won't until January 1 itself, so it'll have to wait. But it won't wait too long. In the meantime, if you're looking for other good content, I would go over to Risk Parity Chronicles, which is a blog run by our listener Justin. And he is much more organized and better at updating his website than I am.

Mostly Voices [14:14]

Inconceivable.

Mostly Uncle Frank [14:18]

So I would definitely check that out while you're waiting for me to get my act back together.

Mostly Voices [14:22]

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

Mostly Uncle Frank [14:29]

But thank you for your encouragement and thank you for your email.

Mostly Voices [14:33]

Looks like you've been missing a lot of work lately.

Mostly Uncle Frank [14:37]

I wouldn't say I've been missing it, Bob. But now I see our signal is beginning to fade. We're making this a short one today, given its holiday season. You probably don't want to listen to a long podcast anyway.

Mostly Voices [14:50]

Dear Lord, baby Jesus, or as our brothers to the south call you, Jesus, we thank you so much for this bountiful harvest of dominoes, KFC, and the always delicious delicious Taco Bell.

Mostly Uncle Frank [15:06]

Just one announcement. If you are still looking for a charity to donate before the end of the year, I would invite you to consider the Father McKenna Center, which is the charity that this podcast sponsors. The Father McKenna Center serves homeless and hungry people in Washington, DC, and has a very high rating in Charity Navigator. And you can give to them directly at their website, I'll put the donation page there because you're probably interested in that for the tax deduction. Or if you prefer, you can also give through our Patreon page, through our support page on the website, which I think still works.

Mostly Voices [15:44]

Yeah, baby, yeah!

Mostly Uncle Frank [15:47]

And 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. That would be great. Okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Parity Radio signing off.

Mostly Voices [16:25]

I like to picture Jesus in a tuxedo t-shirt 'Cause it says like, I want to be formal, but I'm here to party too. 'Cause I like to party, so I like my Jesus to party. I like to picture Jesus as a ninja fighting off evil samurai. I like to think of Jesus like with giant eagle's wings and singing lead vocals for Leonard Skinnard with like an angel band. And I'm in the front row and I'm hammered drunk.

Mostly Mary [16:50]

Hey, Cal, why don't you just shut up? Yes, ma'am. 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.