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. It's a relatively small place. It's just me and Mary in here. And we only have a few mismatched bar stools and some easy chairs. We have no sponsors, we have no guests, and we have no expansion plans.

Mostly Voices [1:10]

I don't think I'd like another job.

Mostly Uncle Frank [1:15]

What we do have is a little free library of updated and unconflicted information for do-it-yourself investors.

Mostly Voices [1:25]

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 [1:32]

So please enjoy our mostly cold beer served in cans and our coffee served in old chipped and cracked mugs, along with what our little free library has to offer. But now onward, episode 331. Today on Risk Parity Radio, it's time for our weekly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com on the portfolios page. It's a little preview of that.

Mostly Voices [2:13]

I love gold!

Mostly Uncle Frank [2:17]

Everybody's all excited about that these days along with the price of cocoa.

Mostly Voices [2:22]

Hey, go go for cocoa bombs. Go go for cocoa bombs. The chocolate bar riots are about to ensue. Fire and brimstone coming down from the skies. Rivers and seas boiling. 40 years of darkness, earthquakes, volcanoes, the dead rising from the grave. But before we get to that, I'm intrigued by this, how you say, emails.

Mostly Uncle Frank [2:48]

And, first off, First off, an email from Dale. I'm Chip.

Mostly Voices [2:52]

I'm Dale. We're just a couple of crazy rascals out to have some fun. And Dale writes, hi, Frank.

Mostly Mary [3:02]

I know this topic comes up a lot on the podcast, so here is an article I thought you might find interesting. Dethrone the Dollar? Five charts show how U.S. currency still rules the world economy. Cheers, Dale.

Mostly Voices [3:16]

Yes, Dad, now I shall be ruler of the world.

Mostly Uncle Frank [3:22]

Well, yes, the dominance of the US dollar is not changed in pretty much our lifetimes and does not appear to be changing anytime soon. I will link to this in the show notes. I'm also going to link to the paper that it refers to because the advantage we have, but we don't take advantage of enough, is that whenever there's an article written in the press, in the financial press, usually there is some paper or some background material that is the real material. And that if you really want to be informed, you should go read that thing because all you need to do is search in your browser and it's probably going to come up. And it did. But it's a good paper written by somebody from Stanford and somebody from an Italian university as well. and vetted by a whole bunch of people, including Neil Ferguson, with the passing on of Daniel Kahneman last week. I think it's interesting to review why this story is so persistent as a narrative, because it really does go to what Kahneman and Tversky called System 1 thinking, and this is about dramatic or attractive narratives that people like to repeat because they make this interesting story about how the world is changing, even when it's not, at least not in that respect. And when the story is repeated over and over again, it gains some kind of currency, not because it's any more true, but because of the repetition and how attractive it sounds to people. And the truth is that human beings have found this kind of apocalypse narrative, the idea that we're living in these end times or big changing times, or there's something going on today that was not occurring before, and this is the most important time in history. People want to believe that story. It's an attractive story. And so it's often repeated and often applied to all kinds of things.

Mostly Voices [5:30]

Human sacrifice, dogs and cats living together, mass hysteria.

Mostly Uncle Frank [5:34]

You can imagine how people living in the Roman Empire were constantly thinking that this was going to be the end, even though the empire went on for several hundred years through all kinds of calamities, catastrophes, and terrible rulers. And so this story about the demise of the US dollar or the imminent demise of the United States as the leading global power in the world is very similar and very attractive for those same reasons. You will find that it is you who are mistaken about a great many things. The related narrative fallacy that you often hear is called the golden era fallacy, which is that things were much better in the past. The Inquisition. Let's begin the Inquisition. Look out, Satan. And people often selectively strip out things that were worse in the past to make that sound better in their heads. Some kind of funny data-defying applications of that include people talking about the high crime rates today because they were higher than they have been in the recent past. What if you go back to When I was growing up in the 1970s or 1980s and into the 1990s, those were the high crime rates. Those were the bad old days in terms of criminal activity.

Mostly Voices [7:01]

You better check yourself before you wreck yourself, 'cause I'm back for your health. I come real strong.

Mostly Uncle Frank [7:05]

The other one that I think is funny is the discussions about inequality, economic inequality. And when you ask people, well, when were things equal? And the last time things were more equal happened to be in the latter half of the 1970s, which everybody also points to as just this horrible inflationary environment when the world was falling apart. So which reality would you prefer? The one today or the economy of the late 1970s? Anyway, I was also listening to an interview of some financial person this past week. and I'm not remembering who it was, but he was asked a similar question about this. Well, when do you think the dollar is going to collapse or something like that? And he says, well, not until the United States start losing aircraft carriers in battles. And I thought that was a great and succinct answer because it's also what Ray Dalio discovered by looking at a 500 year economic history of the rise and fall of states and economies and currencies. which was that the reserve currency was kind of the last domino to fall and that the most dominant country in the world had to be replaced as a military power before that happened historically. And it usually was a result of some kind of big naval battle or series of naval battles. So we're nowhere near that at the moment.

Mostly Voices [8:29]

Not going to do it. Wouldn't be prudent at this juncture.

Mostly Uncle Frank [8:33]

There was another interesting story about Zimbabwe trying to reform its currency since it's been under hyperinflation for a number of years, people just use the US dollar as the currency of transactions in that country. But evidently they're trying to basically start a new currency and tie it to some hard asset or something like that. But that is the reality in most of the world in places where there are weak currency problems, and even not so weak currency problems, People hoard dollars. That's what they hoard. That's what they use. That's what they want. That's the fact, Jack!

Mostly Voices [9:09]

That's the fact, Jack!

Mostly Uncle Frank [9:13]

And as this paper shows, that hasn't been changing and is unlikely to change anytime soon. Forget about it. But I think we've talked more than enough on this because it's not really the topic of this program. Forget about it. Although I don't mind responding to whatever you Emails come in the door these days.

Mostly Voices [9:34]

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

Mostly Uncle Frank [9:41]

And so enjoy reading the paper and thank you for your email.

Mostly Voices [9:55]

Second off, Second off, we have an email from Brad. You worked at All American Burger seven months

Mostly Uncle Frank [10:07]

And Brad writes?

Mostly Mary [10:11]

I emailed a question to Brad Barrett at Choosefi and he suggested I send the same question to you as an expert. It relates to the rule allowing penalty-free 401 withdrawals if you separate from an employer after turning 55. I retired from Vanguard, so I will use it as an example. Vanguard's 401 allowed rollovers into it, whether from another 401 or an IRA. Would this strategy potentially work? One, get employed at age 54 at an employer whose 401 is similar to Vanguard's. Two, roll over all retirement assets into the new 401 plan. Three, retire again at age 55 and enjoy penalty-free withdrawals. Have you come across any resource or example of this? Thank you for any input you can provide. Maybe this could be a valuable strategy for other financial independence members in their early 50s. Oh, gnarly.

Mostly Uncle Frank [11:08]

Well, in case you're wondering, no, Brad Barrett did not write this email referring to Brad Barrett.

Mostly Voices [11:17]

Inconceivable.

Mostly Uncle Frank [11:20]

He is, of course, the podcast host of Choose FI, and I've known him for several years. I just saw him at the Economy Conference a few weeks ago, and I had heard on another podcast him referred to as Brad Barrett, the Nicest Guy of FI, and I said, that has got to be your title. I want it so that whenever somebody says the name Brad Barrett, another person's going to say, oh, the Nicest Guy of FI.

Mostly Voices [11:47]

I want you to be nice.

Mostly Uncle Frank [11:51]

So I have a little icon that I've been promoting which has his picture in it and says that on it.

Mostly Voices [11:55]

If somebody gets in your face, I want you to be nice. Ask him to walk. Be nice. If he won't walk, walk him. But be nice. If you can't walk him, one of the others will help you and you'll both be nice.

Mostly Uncle Frank [12:15]

Because he is indeed the nicest guy of Phi, unlike yours truly. You're too stupid to have a good time. Getting to your question, yeah, this is a good strategy to use if you can use it. The rule of 55 is a very strange thing because basically it is an optional rule that the administrator of a 401 plan can use or not use at their discretion. The way the rule basically works, it says that if you are with an employer and they have a 401 that employs the rule of 55, If you leave that employment after you turn 55 or in the year you turn 55, then you can access that 401k money without paying the 10% penalty that you would ordinarily have to pay until you got to be age 59 and a half. Which leads to the next question which you have asked, which is, well we know that 401k plans allow new employees to bring over or transfer in old 401 money from prior jobs into the new 401. And that is often a good thing to do, especially if you like the new 401 better than the old 401. You can also transfer the money to an IRA from an old 401, but that does not get any rule of 55 benefits. So your question is, does the rolled money from the old employer now rolled into your new employer's 401k. Say you rolled a million dollars when you were age 53 into the new 401k and then you worked there for a couple more years and then you retired or ceased employment there. Could you access that money that you had transferred in just a couple years before? And I think the answer is yes, but with a caveat. And the caveat is, does that plan allow that? Is that plan set up to do that? And this is because the entire application or use of the Rule of 55 is optional for the provider of the plan. So I think they can basically decide whether they are going to follow that part of the law or not. I would suspect that they are going to allow it. because it's just much more convenient for them just to look and say, all right, well all the money here is in your 401k. We don't care where it came from. We're not going to be charged with tracking when you came here, when you transferred money and so on and so forth. And that if you are 55, when you leave employment here and we have the rule of 55 that applies to our 401ks, then we're going to let you apply it regardless of how the money originally came into the plan. That being said, I really think you need to ask. You need to go talk to the administrators of the plan. I will tell you that oftentimes the people running the plan, particularly in HR departments, are completely unaware of the Rule of 55 and they don't even know whether their plan applies it or not. So you may have to do a little bit of digging and look at the actual forms that you would use to withdraw money. because oftentimes those forms themselves have like a little checkbox to show whether you are implementing the rule of 55 or not. And so don't trust the first answer you get from somebody in HR. You need to actually go and look at the plan documents to make this determination. Now, there are a lot of articles out there about this rule. I will link to one from Schwab. I don't think most of them answer this specific question, however, which is why I would caution anyone to actually go and look at their own plan to see how it works. But in my case, I did actually use this, even though we decided not to actually take any money out of the 401k that since I left that employment in the year I turned 56, we left the 401k money in that plan. However, we did take out some Roth 401K money that was in that plan and roll that into a Roth IRA to get that five-year clock started and comply with all those Byzantine rules. I think they've gotten rid of the issue with Roth 401Ks and Roth IRAs because the issue there was that Roth 401Ks were going to be subject to RMDs eventually where Roth IRAs were not. But I think they fixed that in the last round of the Secure Act. Unfortunately, these rules keep changing all the time, and it's not really very helpful that we have all of these overlapping retirement accounts and plans. So you always want to be looking at this to see exactly what applies to you as you are reaching these ages. As it happens, I turn 59 and a half next week, so I'll just be yanking all kinds of money out of my retirement. Counts. Well, you have a gambling problem.

Mostly Voices [17:34]

Actually, I won't, but it's nice to know that I can now. At my age, the mind starts playing tricks. So, ah, death! That's only the cat. Oh. The benefits of age before beauty. We can't bust heads like we used to, but we have our ways. One trick is to tell them stories that don't go anywhere. Like the time I caught the ferry over to Shelbyville, I needed a new heel for my shoe. So I decided to go to Morgantonville, which is what they call Shelbyville in those days. So I tied an onion to my belt, which was the style at the time.

Mostly Uncle Frank [18:17]

Hopefully this helps and you can check out the article that I linked to. And thank you for your email. Totally awesome.

Mostly Voices [18:26]

All right, Hamilton.

Mostly Uncle Frank [18:30]

Now, just remember, every time you hear the name Brad Barrett from now on, the next words in your mind and coming out of your mouth should be the nicest guy of five.

Mostly Voices [18:41]

No one can stop me. It works. Last off.

Mostly Uncle Frank [18:51]

Last off, we have an email from Corey.

Mostly Voices [18:56]

Hi, you've reached the Corey hotline. 495 a minute. Here are some words that rhyme with Corey. Glory, story, allegory, Montessori.

Mostly Uncle Frank [19:12]

And Corey writes, hello Frank.

Mostly Mary [19:16]

Currently listening to episode 313 of Chooseify. And you mentioned shifting investments to a retirement portfolio once you reach financial independence. What would that basic portfolio look like? Thanks for your website. I am learning a lot.

Mostly Uncle Frank [19:31]

Well, now this is the $64,000 question now, isn't it? But it is one of the reasons and big questions of this podcast. I am a scientist, not a philosopher. And I don't know whether you've gone back and listened to episodes 1, 3, 5, 7, and 9, but I invite you to do so. In order to answer your question, we have to make a few assumptions. And the two assumptions I'm going to make for the purpose of answering this initially, that you actually do plan on using this money after you reach financial independence to spend it to live on? That's the first assumption. And the second assumption is that you want to be able to maximize your ability to spend this money. So you are looking for a portfolio that has the highest projected safe withdrawal rate that you can reasonably construct and manage. Now let's For the moment, assume those two things are true, and we'll talk later about what if they're not true. But assuming those two things are true, then historically for about the past 100 years, a portfolio that has the highest projected safe withdrawal rate looks approximately like this. First, it has between 40 and 70% in equities. That would be your basic, stock index funds. Second, those equities are tilted towards the value factor such that at least half of your stocks, you would say, are value tilted or value oriented. And if they're on the small side, that's probably even better. So in practice, what that would look like is to have one fund that is a S&P 500 or Total Market or Large Cap Growth Fund, and then have another fund that is a small cap value fund. And that would be the simplest formulation of that part of the portfolio. The next general criteria is that this portfolio has between 20 and 30% in intermediate and long-term bonds, and specifically in US Treasury bonds. You do not want corporate bonds for this purpose because they are less diversified from your stock holdings. So you do not want to use a total bond fund for this. What you want to do is use funds that invest in US treasury bonds. Now, fortunately, Vanguard has very cheap funds that do this, and you can buy a intermediate treasury bond fund, VGIT, or a long-term treasury bond fund, VGIT and mix and match them however exactly you'd like to do that. And so that's very easy to do these days. And there's no reason anybody needs to be using a total bond fund anymore. The third criteria is that you have 10% or less of this portfolio devoted to cash or cash equivalents. That would include savings bonds and savings accounts, money market funds, CDs, very short-term bonds, any of those sorts of things, they're all in one kind of pot. And you want to keep that at 10% or less of your portfolio because if you don't, it tends to detract from the long-term performance of a portfolio. What this means in practice is that this idea of holding five years of cash or something like that is a sub-optimal idea if you were trying to get the highest safe withdrawal rate out of a portfolio.

Mostly Voices [23:16]

Forget about it.

Mostly Uncle Frank [23:19]

And the last criteria is that you have between 10 and 25% of this portfolio invested in alternative assets. And the traditional asset in that class would be gold, which can now be purchased through ETFs and should be purchased through ETFs. Do not go out buying physical gold. It's very inefficient and very unnecessary and cannot be easily rebalanced with the rest of your portfolio. The modern alternative to that now is managed futures, and there are now good, reasonably priced funds, including one called DBMF that can fulfill this role or part of this role in your portfolio. Just a couple notes on that fund in particular. There was a nice little quarterly review on YouTube from the people that run that fund. I will link to that in the show notes. Last quarter it had a really good quarter. It was up more than the S&P 500 was up actually. And there is a nice interview of Andrew Beer that just came out yesterday on Top Traders Unplugged talking about this whole use of managed futures in diversified portfolios. and the histories and problems with the class before that it was way too expensive and just enriched the people running these funds as opposed to the people using these funds. And that is now changed with the advent of funds like DBMF. Now, anyway, if you take those parameters I just gave you and construct a portfolio over approximately the past 100 years, that kind of portfolio has had a 30-year safe withdrawal rate. adding inflation every year of 5% or slightly more. And the reason I know that is I've put those parameters in the toolbox from early retirement now and verified the results with Karsten Jeska, who runs that site. Now, if you go over to our sample portfolios, which are designed to not only show portfolios of those kind of parameters, but other alternatives and ideas that other people have had or tried to use. The two portfolios that look like this and are within these parameters are the Golden Butterfly and Golden Ratio portfolios. But those are just examples and there are many ways to formulate this using a wide variety of funds. But one of the principles we try to adhere to here is called the Macro Allocation Principle which is that portfolios with similar macro allocations, stocks, bonds, other, are likely to perform the same as other ones over long periods of time if they have the same macro allocations. So what I just gave you was kind of a roadmap of those kind of macro allocations that yield the highest safe withdrawal rates. A good place to model these sorts of things and compare a whole bunch of different portfolios that you may have heard of in the past. Total stock market, 60/40s, Boglehead 3 funds, all those sorts of things is at portfolio charts. There's something called the Portfolio Matrix Analyzer, which compares all these things on a variety of parameters and allows you to put in your own portfolio. Now, that only goes back to 1970, but it is still a very good tool in particular for comparing portfolios because these long-term performances in relation to each other don't change that much over time. Okay, so I think that answers your basic question. But now let's go back to those assumptions because those assumptions often do not apply to various people in various circumstances. Remember, the first assumption was you are actually going to live on the portfolio. Now, some people are not going to do that or don't need to do that because they are continuing to work, continuing to have income, or have income from other sources that's covering their expenses. So if you are not actually using the money to live on and not planning on using it to live on, you would want to invest it for whatever purpose that it's designated for. So for example, if you were just planning on leaving it to somebody else when you die, and you're probably not going to die anytime soon, you would want to just leave that invested in 90 or 100% equities and leave it alone and never look at it. Because essentially it is still an accumulation portfolio that nobody's ever going to use in your lifetime. On the other end of the spectrum, Maybe you're just looking at it as sort of extra money to have around and spend whatever, and your biggest concern now is psychological that you don't want to see it go down in any meaningful manner, in which case you could load it up into very conservative things and have a portfolio that say only 30% in stocks or even less than that. But that is probably not going to be optimal from a financial perspective, even though it might be desirable from a psychological perspective. And that gets us to the other assumption that we made. And that assumption was that you actually wanted to maximize your ability to spend this money. Now that might seem like an obvious yes, at least it did to me when I was looking at this assumption or this question. But in fact, the answer to that question is frequently no for many people in Personal finance. And in fact, if you look at the personal habits and portfolios of virtually any personal finance guru person that has written a book or that writes in popular media, what you will discover is that they in fact do not desire to spend their money and do not desire to spend it at the highest rates that they could. In fact, they are chronic underspenders. And in fact, they often spend a lot of ink trying to justify being chronic underspenders. Usually it runs something like, well, I have this crystal ball, and these P/E ratios, and these other things, and the national debt, and blah, blah, blah. And here's, you know, 16 reasons why I'm not going to spend my money.

Mostly Voices [29:55]

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

Mostly Uncle Frank [29:59]

And then correspondingly, they refuse to look at the idea that you can change your portfolio to allow you to spend more money and that you can change your withdrawal mechanisms to allow you to spend more money.

Mostly Voices [30:11]

Now, the crystal ball has been used since ancient times. It's used for scrying, healing, and meditation.

Mostly Uncle Frank [30:23]

Because the original assumption that people make for these calculations when you're talking about the 4% rule is that you will actually increase your spending by the rate of CPI inflation until the day you die, when in fact most people do not do that. And their personal consumption and expenses actually vary a lot and tend to decline both in terms of not keeping up with inflation and even in nominal terms. So as a result, there's a whole host of people out there in personal finance land and who have achieved financial independence who never actually plan on spending more than about 3% of their assets in any one year and try to keep under that because they are not in fact trying to spend the most money out of their portfolio. If you have a very low withdrawal rate like that, 3% or less, then you really do not need much of a withdrawal strategy or plan. You could hold anything that is from 30% in stocks to 100% in stocks, assuming it's not an individual or speculative investments, and be just fine. Because the real plan that you're adopting here is don't spend money. And if your withdrawal strategy or retirement plan is don't spend much money, That always works. You don't need to optimize your portfolio. You don't need to have a bucket strategy. You don't need to have a yield shield. You don't need to have a whole bunch of other things that you hear people talk about all the time. Because your real strategy is don't spend money or don't spend much money. And oftentimes, if that is your actual strategy, you probably shouldn't even be investing a lot of your money, particularly as you get older. because you will be better off simply buying annuities and taking the contractual payments which can easily take care of your needs, if you will. And then maybe you just invest that other money for somebody else who's going to inherit it when you die since you're not going to spend it. I think a lot of retirees in this area don't actually want to come to grips with their own psychology. that they're not cut out for investing. They don't plan on spending much money. And what you see there is people hoarding huge piles of cash with the idea that somehow they are going to market time or do something that is going to make their outcomes better or different. Now, if you're not going to spend much money, yeah, you can hoard big piles of cash. It probably isn't going to make much of a difference if you have something that's going to grow. But you shouldn't be kidding yourself that that is an optimal idea in terms of finances. In fact, that is one of the largest challenges for many financial advisors is getting their clients to actually invest their money and not leave it sitting around in big piles of cash. And it doesn't really matter if you label those big piles of cash as buckets or flower pots or ladders or pie cakes or other kind of food or garden implements. It's still the same issue. It's still a cash hoarding operation. There's always money in the banana stand. And in those circumstances, you would probably be better off, at least as you get older, to buy annuities instead, simple annuities, because then you have certainty and are able to spend more money without worrying about jumping in and out of the market or whether your big pile of cash is going to be enough. There's $250,000 lining the walls of the banana stand. And my final note here would be the timing issue that you might become financially independent, have enough money to retire on, but then decide that you're not actually going to retire for another period of years. In which case you're thinking about, well, when do I need to transition this to my retirement portfolio? And that's always a big question. The short answer is, if you can do it right away, that's probably the best answer because then you can just kind of pull the plug on retirement whenever you feel like walking away from whatever else you're doing. And your portfolio is all set up and ready to go. Because even in its retirement configuration, a portfolio is still going to grow some. And so you don't need to maximize growth anymore. You can just have some growth and then deal with it when you walk away. The other criteria there is, is your portfolio at or near an all-time high? Because that's the time you want to make a transition from a more aggressive portfolio that has, say, 80 to 100% inequities in it to a retirement or risk parity style portfolio, which is designed to have lower risk. Because what you want to avoid doing is getting to enough money to retire on, then continuing to ride the pony and trying to get even more money that you don't actually need, and then you have a big crash right before you want to retire. You can't handle the crystal ball. And then you can't retire because you didn't transition your portfolio when it was at or near an all-time high. So the lesson there is just don't be greedy. You can't handle the gambling problem. But it is also the lesson that your personal circumstances and plans have a lot to do with what your portfolio looks like and how you plan to transition it. You do have to evaluate your individual circumstances as an individual. And there's no one size fits all for these kinds of questions. But that is more than enough on this for now, again. But you brought up a fundamental topic and I'm happy to address it as often as we need to address it because it's part of the reason for having this podcast in the first place. And so thank you for your email.

Mostly Voices [36:37]

Class is dismissed. And so Michael, his son and his brother together enjoyed the cathartic burning of the banana stand. And now for something completely different.

Mostly Uncle Frank [36:54]

And the something completely different we get to do is our weekly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com on the portfolios page. Just looking at what the markets did last week. The S&P 500 was down, it was down 0.95% for the week. The Nasdaq was also down, it was down 0.8% for the week. Small cap value took it on the chin. Our representative fund of VIoV was down 3.61% for the week. But the big winner was gold. Everybody seems to be buying gold these days. Gold was up 4.03% for the week. Long-term treasury bonds were down. Our representative fund, VG L T was down 2.81% for the week. REITs were also down. Our representative fund, R E E T was down 2.5% for the week. Commodities were up. Our representative fund at P D B C was up 3.6% for the week. Largely on that gold, but also on some energy products, I believe. Preferred shares represented by the fund PFF were down 0.03% for the week. And managed futures represented by our fund DBMF were up again. They were up 0.98% for the week and are still performing better than the S&P 500 this year, believe it or not. Surely you can't be serious. I am serious.

Mostly Voices [38:28]

And don't call me Shirley.

Mostly Uncle Frank [38:32]

Moving to these sample portfolios, and the theme here is if you had a lot of gold, you did all right. If you didn't have a lot of gold in the portfolio, you didn't do as well. That's not an improvement.

Mostly Voices [38:41]

Anyway, the first one is the All Seasons.

Mostly Uncle Frank [38:46]

This is a reference portfolio. It is 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 0.73% for the week. It's up 1.75% year to date and up 3.3% since inception in July 2020. Now moving to these bread and butter kind of portfolios that are designed to have higher safe withdrawal rates. First one is the Golden Butterfly. This one is 40% in stocks divided into a total stock market fund and a small cap value fund. 40% in bonds divided into Long-term Treasuries and short-term Treasuries and 20% in gold at GLDM. It was down 0.39% for the week. It is up 2.56% year to date and up 23.6% since inception in July 2020. Next one's a golden ratio. This one is 42% in stocks and three funds, 26% in long-term treasury bonds, 16% in gold, 10% in a reit fund and 6% in cash. It was down 0.84% for the week. It's up 2.2% year to date and up 19.62% since inception in July 2020. Next one is the Risk Parity Ultimate, which is kind of a kitchen sink portfolio we've put together to incorporate just about anything somebody would want to incorporate into a portfolio, even though I don't think anybody would want to put this many things in a portfolio. It has 15 funds in it. I'm not going to go through them, but it also includes some cryptocurrency. It was down 0.66% for the week. It's up 5.4% year to date and up 13.2% since inception in July 2020. And now we move to these experimental portfolios involving leveraged funds. Don't try these at home. Look away. I'm dizzy. But they are a good learning experience if you've ever thought about these sorts of things. You can't handle the gambling problem. Anyway, the first one is the Accelerated Permanent Portfolio. This one is 27.5% in a leveraged bond fund, TMF 25% in a leveraged stock fund, UPRO 25% in a preferred shares fund, PFF, and 22.5% in gold. It was down 2.32% for the week. It's up 2.8% year to date and down 5.79% since inception in July 2020. Next one is the aggressive 50/50. This one is the least diversified and most levered fund. That is my least favorite thing to do. And it's very volatile because of that.

Mostly Voices [41:33]

Carl, that kills people.

Mostly Uncle Frank [41:40]

It's one third in a levered stock fund, UPRO, one third in a levered bond fund, TMF, and the remaining third in ballast in a preferred shares fund and a intermediate treasury bond fund. It was down 4.01% for the week and has no gold in it.

Mostly Voices [41:53]

Do you expect me to talk? No, Mr. Bond, I expect you to die. It's up 0.

Mostly Uncle Frank [42:01]

9% year to date and down 17.26%. since inception in July 2020. And moving to our last one, which is our youngest one, the Levered Golden Ratio. This one is 35% in a composite fund called NTSX. That is the S&P 500 in treasury bonds, 25% in gold, GLDM, 15% in a REIT, O, 10% each in a levered bond fund, TMF, and a levered small cap fund, TNA and 5% in a managed futures fund, KMLM. It was down 0.87% for the week. It's up 2.62% year to date and down 11.19% since inception in July 2021. And that concludes our portfolio reviews for the week. Bow to your sensei. Bow to your sensei. As you can imagine, I've been getting a bunch of emails about gold. You always get emails about whatever's doing the best at any given period. You're insane, Gold Member. But all I have to say about it is it's not predictable. And so if you think you can just jump on the bandwagon now and profit from it, you're probably not going to have good outcomes. This is something that is a long-term holding that needs to be bought when it's low so it can be sold when it's high. Never show any sign of weakness.

Mostly Voices [43:33]

Always go for the throat. Buy low, sell high. Fear, that's the other guy's problem.

Mostly Uncle Frank [43:40]

And so when we ask our crystal ball whether gold will continue to reach all-time highs this year and press on even higher, this is the answer we get. We don't know.

Mostly Voices [43:52]

What do we know? You don't know, I don't know, nobody knows.

Mostly Uncle Frank [43:55]

Okay, that's always the answer we get.

Mostly Voices [44:00]

And that's the way, -huh, -huh, I like it, Keshi on the sunshine band.

Mostly Uncle Frank [44:07]

But now I see our signal is beginning to fade. If you have comments or questions for me, please send them to frank@riskparityradio.com that email is frank@riskparityradio.com Or you can go to the website www.riskparityradio.com, put your message into the contact form and I'll get it that way. If you haven't had a chance to do it, please go to your favorite podcast provider and like, subscribe, give me some stars, a review, a follow. That would be great. M'kay? Thank you once again for tuning in. This is Frank Vasquez with Risk Parity Radio signing off.

Mostly Voices [44:43]

Why are you continuously late for this class, Mr. Spicoli? Why do you shamelessly waste my time like this? Oh, no. I like that. Hmm, I don't know. That's nice. Mr. Hand, will I pass this class? Gee, Mr. Spicoli, I don't know. That's nice. I really like that. You know what I'm gonna do? I'm going to leave your words on this board for all my classes to enjoy, giving you full credit, of course, Mr. Spicoli.

Mostly Mary [45:17]

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.