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. Thank you, Mary, and welcome to Risk Parity Radio.

Mostly Uncle Frank [0:47]

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 [1:14]

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

Mostly Voices [1:23]

Now who's up for a trip to the library tomorrow?

Mostly Uncle Frank [1:27]

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 337. 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. So a little preview of that. Boring! Yes, thankfully not much happened.

Mostly Voices [2:14]

Boring. But before we get to that, I'm intrigued by this, how you say, emails. And?

Mostly Uncle Frank [2:26]

First off, I have an email from Steve.

Mostly Voices [2:30]

Hey, Steve.

Mostly Mary [2:35]

And Steve writes, Frank, if you have time for this question not related to your podcast, your advice may prove helpful. Inconceivable. My adult son of 23 has decided to pursue a law degree and has been accepted to a few different law schools in our region of the southeast. So far, all have offered him varying degrees of scholarship money. His long-term girlfriend's parents are all lawyers, mother, father, and stepfather. Shirley, you can't be serious. I am serious. And don't call me Shirley. Apparently, their advice to him is to go to the highest ranked law school to which he can get accepted. He changed his educational plans from seeking a graduate school position for a history PhD to seeking a law degree after the graduate school search and potential future professor positions seemed unlikely. This led to him only studying for a short time for the LSAT. I guess his score was pretty good and his undergraduate GPA was excellent. The law schools in our area are interested. However, Now he has some thoughts of not attending any of those law schools and taking the coming year to better prepare for and retake the LSAT hoping for acceptance at a higher ranked school. Is this wrong thinking? What say you? If he turns down the schools that want him now, will they be uninterested next year if he re-applies to them and other schools he thinks he would rather attend? Is a bird in the hand worth more than those hiding in the bush? Any advice or helpful commentary? Thanks, Steve.

Mostly Voices [4:07]

I'll get you a Steve if it's the last thing I'll do.

Mostly Uncle Frank [4:13]

Well, I don't mind answering a few questions unrelated to the podcast, at least the ones that are within my bailiwick, and this one certainly is. I don't like your attitude.

Mostly Voices [4:24]

What else is new? I'm holding you in contempt of court.

Mostly Uncle Frank [4:28]

And it may be generally useful to a lot of people who have children or others considering going to law school. As most of you know, Mary and I are both lawyers. We actually met at Georgetown Law School. Mary, Mary, I need your hug. And we've also been teaching there together for about 20 years. Actually, I've been teaching there for over 25 years. And we teach a small class in trial practice, which is basically teaching people how to perform in a courtroom setting in terms of making arguments and doing examinations of witnesses, handling exhibits, so on and so forth. I'm holding you in contempt of court. So, we do deal with a lot of younger people, either in law school or considering law school. Young America, yes, sir. And when I was practicing, I probably interviewed thousands of people for legal jobs. In addition to that, we've also helped a lot of our son's friends who'd been considering law school or going to law school and kind of planning out their approaches. But enough about me, let's talk about you and your son.

Mostly Voices [5:47]

Yes!

Mostly Uncle Frank [5:52]

The short answer is that his girlfriend's relatives are essentially correct in their advice, but there's a little more to it than that. I think when thinking about law school, first you want to think about what do I want to do after law school? Because where you go can have a dramatic effect on whether or not you're going to be able to do what you want to do when you want to do it. So let's suppose you came from a smaller state. I came from Iowa. Suppose you came from South Carolina or Alabama or somewhere like that. And your goal was to practice in your home state, either in a law firm there or in a prosecutor's office or some other public-facing lawyer job. If that's where you want to end up or yourself ending up, then you are fine going to the biggest state school or any regional school, and you'd probably be better off doing that because in most cases you can save a lot of money by going to the best state school. So the idea there is don't spend a lot of money on law school and get yourself launched in as efficient a manner as possible. And that would also be true if you didn't intend on practicing law. Believe it or not, people do go to law school and then decide not to practice law or have decided from the beginning not to practice law. Now let's talk about a different person who wants to go work for a very large law firm and make a lot of money there, or they are trying to get prestigious clerkships, either in the federal courts of appeals or even up to the Supreme Court. That kind of person is best off going to the best law school they can get into, even if it costs a whole lot of money. With the caveat that if you're paying it for it yourself and it's going to cost a whole lot of money, then you probably better be targeting working at some big law firm for some period of time to be able to pay that off. So it's a big commitment on the front end financially. All right, to understand why this is the case, you need to understand how large law firms and prestigious judges typically hire. And they use the pedigree of the law schools as a filtering mechanism. So a large law firm is typically only going to hire from a select group of law schools. And they aren't going to bother with a lot of people from other law schools, even if they're at the top of their class. They just don't have the bandwidth to do that kind of filtering. and they know that a large percentage of the people they hire are going to quit anyway for various reasons, or they're not going to work out and they're going to have to be fired. So it's not very efficient for them to invest a lot of resources in this process other than just going to the best schools they can find and hiring from that pool of people. And so this tends to break down into basically three different categories. First, you kind of have the top four schools, and those are Harvard, Yale, the University of Chicago, and Stanford. If you get into any one of those, that pedigree is probably good enough to get you a big law firm job or a nice clerkship or some other thing that's pretty high up on the ladder, even if you don't do very well at those schools, even if your grades are not that great and you're only in the middle of your class. So those degrees are worth more in the legal employment area, at least right away after law school, than any of the others. Now in the next tier, you have 12 to 15 schools that do attract large law firms and other prestigious employers. And you can look this up on any kind of law school ranking and see what these are, but they generally include the rest of the Ivies, the four state schools of Michigan, Virginia, UCLA, and Cal Berkeley, and then a few others with national reputations like Georgetown and Duke. And don't ask me what about such and such, you can go look this up for yourselves. But if you get into any of those and then have reasonably decent grades in the top of your class, I would say top third of your class, that will set you up for getting one of these high paying jobs at a big law firm, at least right out of school. Now, if you do not go to any of those schools and you want to make a lot of money as a lawyer, your path is probably going to be different. It's not that you can't make a lot of money as a lawyer. You probably won't be making it right away when you come out of law school. Your best path is often to get some kind of government job, either in a prosecutor's office or with an agency, develop some kind of specialty, and then move on from there. Alternatively, if you're going under the plaintiff's bar side of things, those people that follow those class actions, that is a whole other route that some people take. And then some people go work for family firms or do other things. Typically, you're not going to get a job right away at a corporation until you've been practicing law in some area for some period of time. So then this leads you to the big question, who's paying for this? If you are paying for it yourself, then you've got to be very thoughtful about it because you do not want to overpay for a degree that is not worth as much in the marketplace as a different degree that might cost the same amount. There are a lot of schools in this country that charge a lot of money and their degrees frankly are just not worth the money that they're charging. Law schools are a big money maker for the universities that they are set up with because they do not require a lot of fancy equipment or other things. You have a building, you hire some professors, and you're off and running. And so they will charge as much as the market will bear in their area. And they will frequently have very inflated prices and then give some people some aid, knowing that there are going to be some people who are just going to pay full freight just because they have the money. And that's the funny thing about law schools. One that's ranked 50th may cost just as much as one that's ranked 10th in the country. And it's up to you as the consumer to make a good choice here. But here's the other thing you should know about law schools and lawyering, that about half of the people that go to law school are no longer using their degree or practicing law within a decade of graduating from law school. And unfortunately, a lot of young people end up going to law school for the wrong reason. The wrong reason is I couldn't think of something better to do. That's not an improvement. So my general advice to most young people who are considering going to law school is to go work for a law firm or in a law office before going to law school. Large law firms are constantly hiring legal assistants to work in their firms for usually one or two years and there are other positions in other places. But that kind of position both gives you good experience in the working world and then helps you decide do you actually want to what these lawyers are doing that you're working with. And I used to be in charge of the legal assistance in my firm, and so saw many of them go through. And it worked out really well for most of them because the ones that wanted to go to law school then had a nice platform to go to law school. They knew a lot more about the practice of law and what lawyers actually did than most of the other people going to law school. And then the ones that discovered that it wasn't really something they were interested in were then very motivated and prepared to go off in a different direction. And that could be graduate school, it could be a different job, could be something technical. People go in all different directions from being a legal assistant. So if this were my child or I were advising your child, I would tell them to go get a job in a law firm. for now and do that for one or two years while they considered whether they really wanted to become a lawyer, go to law school and do all that stuff. No more flying solo. You need somebody watching your back at all times. Because once you do go to law school, I think you should mentally commit that you're going to spend at least the next decade of your life learning and lawyering, if you will, because the time and the money you need to invest in Law School is significant. And if you're not going to be using it for very long, then you'd be better off going some other direction and learning something else that is going to be more useful to what you actually plan on doing. Now, as far as these aid packages are concerned, I wouldn't really, wouldn't worry about them too much. The suggestion that Mary made after looking at this question was simply that they can defer for a year, which almost every school will let you do. because they've already admitted you and deferring you for a year under the same terms makes it easy for them just to pencil it in for the next year. Because most of these schools will be interested in him in another year. Remember, from their perspective, having the law school and operating the law school is a money-making business for them. So there really isn't that much in the way of scarcity out there, unless you were talking about those very top schools. the other thing I sometimes see is the transfer that somebody will get into a lower tiered law school, be there for a year, and then transfer to a higher tiered law school. You're not going to get in the top four that way, but you may be able to go to a place like Georgetown because the largest of those schools do accept a fair number of transfer students. Unfortunately, that is also not really a recipe for success because the interviewing season for these law firm jobs, the big ones after law school, really happens the summer after your first year. You interview that summer for a job that is going to start the summer after your second year, which you're going to do for as a summer associate. And assuming you don't really irritate somebody during that summer, you'll probably get a permanent offer. And that's the way the hiring cycle works as well. So there really is a premium on getting into those top schools and getting the chance to interview for these jobs. Anyway, that is the lay of the law school land, and I would encourage your son to go get a job as a legal assistant for a year, retake the LSATs, and then consider whether he really wants to do this law thing or not.

Mostly Voices [16:55]

Now, we're going to be asking you to return a verdict, of murder in the first degree for William Gambini and a verdict of accessory to murder in the first degree for Stanley Rothenstein for helping Gambini commit this hyena's crime.

Mostly Uncle Frank [17:18]

Because it can be a very rewarding career, but a lot of people just don't like it.

Mostly Voices [17:26]

Your tobacco company has turned this beautiful specimen into a horrible, twisted freak. Who could love me? I disagree. In fact, I feel Mr. Kramer projects a rugged masculinity.

Mostly Uncle Frank [17:39]

And the sooner you can figure out whether you'd like it or not, the better off you'll be.

Mostly Voices [17:45]

Rugged? The man's a goblin. He's only been exposed to smoke for four days. By the time this case gets to trial, He'll be nothing more than a shrunken head. Hopefully that helps, and thank you for your email. All right, Mr. Charles, you'll have our offer by tomorrow. Good day, gentlemen. Bye-bye. Second off, second off, we have an email from Mark. All hail the commander of His Majesty's Roman Legions, the brave and noble Marcus Vindictus.

Mostly Mary [18:20]

And Mark writes, hello, Frank and Mary. I remain a Patreon donor of the Father McKenna Center. I thought you would appreciate this Rob Berger video that does a fantastic job bringing home the point that the know-nothing portfolio approach is the only defensible option. I know nothing. He uses very recent and relevant examples to make this point. Unfortunately, he does take a step backwards towards the end with an endorsement of tips that is bound to make Frank sigh a very tired, very heavy sigh. Didn't you get that memo? But the rest of the video is great and the main point of the video is right on.

Mostly Uncle Frank [19:03]

Well, first off, thank you for being a donor to the Father McKenna Center. As most of you know, we do not have any sponsors for this podcast. We do have a charity we support. It is the Father McKenna Center and it serves hungry and homeless people in Washington, DC. I am on the board and the current treasurer. We had a very nice dinner for our volunteers last week and our volunteers are everybody from kids in high school all the way up to octogenarians. It allows us to have a relatively small staff and do a lot more on our budget than you would think an organization our size could do. And it also creates a wonderful sense of community. I'm also going to link to our current newsletter that just came out, quarterly newsletter that's online. There's a very interesting story about our new executive director who interestingly enough was at Georgetown Law School when I was there, went off and practiced for a large law firm and then worked in financial services for banks for some time, but then fell on hard times and ended up being homeless himself. Ended up being a client of the Father McKenna Center, worked his way back, went into social services in Chicago for about the past decade and has now come home to us. His name is Dennis D. And there's a story about him there that I encourage you all to read because it's rather inspiring. Anyway, if you do donate to the Father McKenna Center, please note that in your email and I will move your email to the front of the line. That is the prize you get. And you can do that either through our support page and Patreon page or you can go directly to the Father McKenna Center website and donate there. Either way, you get to go to the front of the line. Now, getting to your email. Yes, I have watched that Rob Berger video. He does a lot of very nice videos on various topics. It's interesting. He actually lives about two or three miles from me and also had a career as a lawyer. Although, I don't think he liked his career as a lawyer as much as I liked mine. I'm holding you in contempt of court.

Mostly Voices [21:22]

Because he's really been a Personal finance writer first,

Mostly Uncle Frank [21:26]

and now YouTuber for about a decade. Now if I walk in the other direction, I can go to Wade Pfau's office. I just live in this hotbed of personal finance things. I can stop and see Michael Saylor at MicroStrategy, which is also within walking distance of my house. Ask him about Bitcoin investments. What does Matt Damon say on that Bitcoin commercial?

Mostly Voices [21:51]

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.

Mostly Uncle Frank [21:59]

So this is another excellent video that he put out about the folly of trying to make market predictions and then alter your portfolio to match your market predictions and hoping that will outperform the market and that you are much better off with what is called naive diversification, which is where you set up allocations in a portfolio and then just rebalance them periodically in accordance with some rules, and that that is going to get you much better performance over time than trying to guess and change course, as popular financial media would have you believe is a good idea. It's really not. Forget about it. So, Rob and I are in strong agreement on that point. I'll also link to a nice interview he did of Harold Evensky, who was the father of the bucket strategy, the original bucket strategy. Both Rob and I are pretty much anti-bucket strategy because we see all this bucketeering as just making things more complicated than they need to be and also distorting or causing people to do things that are suboptimal, either in portfolio construction or in things like tax location of their assets. I think we both would say that you can use that as some kind of overlay, but it should not be the operating principle that you use to construct your retirement portfolio because it will cause you to make distortions or have rules that are very difficult to implement. Anyway, I really loved this interview of Harold Evensky. the father of the bucket strategy, because the bucket strategy that he was talking about bears little or no resemblance to the things that bucketeers talk about today. That's my meaning, matey.

Mostly Voices [23:58]

You've got the word of Long John Silver.

Mostly Uncle Frank [24:02]

The original intention of what he called a bucket strategy was simply to carve off a portion of the portfolio that would be used for the next year's expenses or next quarter's expenses. And the idea there was that he had clients who would get nervous looking at the markets and their portfolio and he wanted to calm them down. So he said, all right, let's just carve off what you're going to be spending for the next year or so, put it over here in cash, and then you can just use that and you don't need to worry about the markets and then we'll deal with it in another year. And that actually makes sense. That is actually what we do with the sample golden ratio portfolio, that we have an allocation to cash of 6%, and then we just spend from that the whole year long and not touch the portfolio. And then once a year, rebalance it, refill up the cash bucket, if you will, and then use that for spending. So historically that's all a bucket strategy was supposed to be a small cash allocation. Since then the bucketeering brigade has turned it into some kind of Frankenstein's monster of multiple buckets doing multiple things, having different assets and different buckets, and making it very difficult to manage or rebalance.

Mostly Voices [25:27]

Fire that musket! And I cuts his throat. Mary, you blundering squid, can you hear me? Aye, aye, hear ye. Lie low till a treaty be made, and this time follow orders. As for you, Mr. Smollett, I'll give ye one hour to send a boat ashore with Flint's map and give yourself up to Mr. Mary. So be it, ye want to see young Arkins. Alive! Open the door! Lively!

Mostly Uncle Frank [25:59]

But that's what happens when you take something that is supposed to be used as a psychological tool and try to turn it into the basis for a mathematical calculation. It doesn't really work very well. And Rob has a number of videos also on the problems with these Multi-bucket strategies. Let's see if I can find another one of those besides the interview of Harold Evensky. Where Rob and I tend to differ is on portfolio construction. I feel that his methodologies are essentially obsolete, that he is still writing as if we were in the period between say 2010 and 2014 when he was first writing. And so it's all based on these kind of boghead notions from that era. does not incorporate very well things like factor investing, alternative assets, and a lot of other things that we as do-it-yourself investors have actually learned over the past decade or so, or could have learned. And so he ends up saying things like, well, I'm not a fan of that, as if being a fan of a particular asset or not is a basis for using it or not, or how you use it. I don't find that to be a very cogent argument because again, that's about psychological comfort and not about math or analysis. And lots of people who construct portfolios out of that era like to use TIPS for whatever reason, even though we know from lots of analysis since then that they really aren't doing a whole lot in your portfolio because they do not have enough oomph to do any real inflation Protecting of a portfolio because they're bonds and they're not as diversified from your stocks as other bonds so they don't do that well either. You had only one job.

Mostly Voices [27:53]

They'd be good for constructing a bond ladder or in some weird mostly

Mostly Uncle Frank [27:58]

bond portfolio. But we don't need to be going off on another rant about that. I want you to be nice.

Mostly Voices [28:07]

you can listen to my past episodes for that in search.

Mostly Uncle Frank [28:11]

Tips in the search bar at the podcast page on the website. But I think at bottom his actual retirement strategy is the same one that I see most guru types using, which is to just not spend much money and or never retire. He has an interesting video from last summer, I think, where he talks about not retiring and just continuing to earn an income. That's fine if that's what you want to do, but that does not get at then the real interesting questions about retirement portfolios is, well, if we're going to live on our retirement portfolio, how are we going to maximize its withdrawal rate or do the things that would make it the best portfolio for living off of it? Because obviously, if you're not going to really live off your portfolio, it doesn't really matter what's in it. Or if your withdrawal rate is low enough, then it really doesn't matter what's in it either. If you fall into those kind of categories, you could hold a portfolio that is 30% in stocks or 100% in stocks, or you just go buy the Vanguard Wellington Fund and call it a day. Maybe add an annuity or two when you get old enough. Anyway, as I said, Rob Berger and I agree on 85 to 90% of these personal finance topics, and I do find his material and his videos to be very enlightening. And so you should check them out. But as always with any expert or guru or source, and that includes this podcast, apply Bruce Lee's adage：Take what is useful, discard what is useless, and add something that is uniquely your own. Maybe a bucket or a flower pot or a hose or something.

Mostly Voices [30:08]

Give him a drop of rum to warm his belly as he passes over.

Mostly Uncle Frank [30:14]

And thank you for your email.

Mostly Voices [30:19]

Brethren, strike the anger from your hearts. This poor misguided sinner has departed into the even of Cap'n Flint. 'Tis no longer befitting for the likes of us to pass judgment on him. He'll be comin' face to face with old Flint himself, he will, and be made to give proper accounting for his evil ways. Last off.

Mostly Uncle Frank [30:56]

Last off, I have an email from Judy. And Judy writes, hello, Frank.

Mostly Mary [31:08]

I just listened to your rant about target date funds. Thank you. I was getting ready to talk to my kids about what would be easiest in terms of investments, and you talked me out of it. I'm wondering what do you think about robo funds? Do you have a similar outlook? I have my 401 in Schwab's robo advisor intelligent portfolio, but I am managing my brokerage account on my own. Curious if you think robo advisor services have a similar downside to target date funds. Thanks for keeping us all from falling into investment black holes. Sincerely, Judy.

Mostly Uncle Frank [31:44]

Well, thank you, Judy. I'm glad you got something out of that rant about target date funds, which was episode 333. And I think with all of these topics and these ideas, if you really want to understand them, you do have to look at the history of them and why these things exist and then decide whether they really make sense for what people are pushing them forward for. I have kind of two baselines that I like to start with, both for an accumulation portfolio and for a retirement portfolio, with the idea that if you can't do at least as well as that, you should stick with that. And the base I use for the accumulation portfolio is the Simple Path to Wealth idea from JL Collins, one total market fund or S&P 500 fund. that is the base to start with and then to compare things against to decide whether they are a better choice than that. For retirement portfolios, I generally start with a Vanguard Wellington Fund. And the question I always have is whatever you are doing is it at least as good as that? Because if it's not, then you're probably wasting your time with your buckets and hoses and flower pots. Usually those kind of portfolios are worse than the Vanguard Wellington Fund.

Mostly Voices [33:07]

That's the fact, Jack. That's the fact, Jack.

Mostly Uncle Frank [33:11]

So let's talk briefly about robo advisors generally and Schwab's Intelligent Portfolio robo advisor. These were rolled out really in the period between 2015 and 2020 as kind of a artificial intelligence kind of approach to investing. with the idea that you could come up with something that was a little bit more complex than a two or three fund portfolio, but that would be managed by this algorithm according to whatever specifications or preferences you put into it. And then they would do some tax loss harvesting on the side, and they tried to make that a big selling point. And so you add ones like Wealthfront and Betterment, and then Vanguard Fidelity and Schwab kind of got into the act with their own versions of these things to thwart the competition, really. Since the advent of no fee trading and fractional shares, the interest in these things has really gone down. And also because they really have not performed any better, and in many cases they performed worse than more simpler constructions. What I like to say is more complicated mint is not better. More complicated meant is not better. And that's what I see with these things. They're just a little more complicated, but they're really not adding anything in terms of performance. And they, like target date funds, are really preventing people from really learning about investing. So they have this kind of magic button quality to them that you think you are getting something special and you're really not. I'm perfectly sane.

Mostly Voices [34:50]

Everyone else, however, is insane and trying to steal my magic bag.

Mostly Uncle Frank [34:54]

and tax loss harvesting really doesn't save you that much money unless you have a whole lot of money, in which case you probably want to do it yourself or really have a real advisor to do it for you. So there's really not much there there in that marketing point either. Now turning to the Schwab robo-advisor, one thing that Schwab does is they pay for this largely by allocating part of the fund or part of what it's doing to cash, because that's how Schwab makes most of its money by using all the cash floating around in its system to invest for itself, which is why you always need to be careful about what Schwab is doing with your cash and making sure it's actually going into a money market fund and not just floating around there. So that's a big strike against this robo-advisor to begin with. I did look at somebody's portfolio constructed by one of these things, recently. And what was interesting to me is that it was applying a principle that we talk about here that you can do for yourself, which is that it makes a lot of sense to divide your portfolio into the growth part of it and the value part of it. I'm talking about the stock part of your portfolio. And if you look at the kinds of portfolios that this robo advisor constructs, that's what it essentially does. It puts half of the money in a growth fund and then half of the money for a given asset class in a value fund. But you can do that for yourself. And in fact, that is the basis for the kinds of portfolios we like to talk about here, at least on the stock side of things. That's why, for instance, a Golden Butterfly portfolio has half of its stocks in a total stock market fund, which is growth tilted and then half of its stocks in a small cap value fund, which is obviously value tilted. And those things are very well diversified from each other, which is the same principle this robo-advisor is trying to implement. And that is a basic principle that comes from Paul Merriman and his research and also from Larry Swedroe and the research there. So you can easily do what this robo-advisor is doing for yourself. you don't need the robo-advisor to do it for you. It's not that hard. And in fact, you might already have something that looks like that. What you want to do is go to the Morningstar Analyzer, put your funds in there, go to the little nine box grid that has value and growth on the horizontal axis and small, medium and large on the vertical axis and see how your funds line up. Because you want half of them in the growth area and half of them in the value area and that's a pretty good way to line up your stocks in your portfolio. And that's what we do as well. So yes, I have some of the same issues with robo-advisors as I do with Target Date Funds. They're not as bad, but they're not doing anything that you can't do for yourself. So they're not worth the cost and they have this kind of magic button quality to them that discourages you from learning real investment principles and applying them.

Mostly Voices [38:09]

I would place it over a candle and it's through the candle that you will see the images into the crystal.

Mostly Uncle Frank [38:18]

Now getting back to advising investors just starting out, I do have one podcast about this in particular. It's got a Wizard of Oz theme. It's episode 208. And my basic recommendation is the same one that Paul Merriman has as the basic to fund a portfolio for accumulation would be, in his case, an S&P 500 and then a small cap value fund. You can do those 50/50. It's what he does for his grandchildren. And he said on the Earn and Invest podcast, that is what he would recommend as the most basic construction. And the reason I recommend that is because we can say with some confidence that that is likely to be a better portfolio than the simple path to wealth portfolio. And whether you look at that on a 50-year history or a 100-year history, that kind of combination tends to outperform a total market fund. It just does. And so since it does Better than the very most basic comparator that we have, which is the simple path to wealth. That is what we use, as opposed to these target date funds and robo advisors that do not do as well as the simple path to wealth to plan for accumulation, and so fail that basic test. Anyway, hopefully that clarifies things a little bit more. I'm glad you're enjoying the podcast, and thank you for your email. And now for something completely different. And the something completely different is our weekly portfolio reviews of the seven sample portfolios you can find at www.riskparityradio.com on the portfolios page. And last week, everything kind of just reversed from what it did the week before. So instead of moving down a little, most of the portfolios just went up a little because the stock market recovered and other things went down. Just looking at those markets, the S&P 500 was up 2.67% for the week. The Nasdaq was up 4.23% for the week. Small cap value represented by the fund VIoV was up 1.68%. 8% for the week. Gold was actually the big loser last week. Looks like all those gold traders thought that the global tensions had gone down after the US Congress passed that aid package. And so gold went down about $70 that one day on Monday and stayed about there, went up a bit, a little bit after that. Anyway, gold was down 2.34% for the week and was the big loser. Long-term treasury bonds represented by the fund of VG L T were down 0.87% for the week. REITs represented by the fund R E E T were up 1.23% for the week. Preferred shares represented by the fund PFF were up 0.74% for the week. Commodities were also up. Commodities were up 0.99% in our representative fund, PDBC. And one of our other big winners was Managed Futures. Our representative fund, DBMF, was up 3.25% for the week. And I think a lot of that has to do with the weakness in the Japanese yen, because I know that that fund is currently positioned strong dollar and weak yen. But that's an interesting example of how diversified that asset class is from everything else because it's just doing something the other ones aren't considering or getting involved with at all and doing it on a very mechanical basis. Now moving to these portfolios, first one is this reference portfolio, the All Seasons, that's only 30% in stocks and a total stock market fund. It has 55% in treasury bonds, in intermediate and long term, and then the remaining 15% is in gold and commodities. It was up 0.44% for the week. It's down 0.29% year to date and up 1.23% since inception in July 2020. Moving to these more bread and butter style 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 treasury bonds divided into long and short and 20% in gold, GLDM. It was up 0.24% for the week. It's up 1.28% year to date and up 22.06% since inception in July 2020. Next one's the Golden Ratio. This one is 42% stocks and three funds, 26% in long-term treasury bonds, 16% in gold, 10% in a REIT fund and 6% in a money market fund. It's up 0.45% 43% for the week. It's up 0.35% year to date and up 17.45% since inception in July 2020. So not doing very much at all. Next one's the Risk Parity Ultimate. This one's got 15 funds in it that I'm not gonna go through. It's also got some cryptocurrency that will finally be selling, I think, next week or partially selling next week for our monthly distribution. It was up 0.87% for the week. It's up 3.37%, year to date, and up 11.36% since inception in July 2020. Now moving to these experimental portfolios involving levered funds. Don't try these at home.

Mostly Voices [44:18]

You can't handle the gambling problem. First one's the Accelerated Permanent Portfolio.

Mostly Uncle Frank [44:23]

This one is 27.5% in a levered bond fund, TMF, 25% in a leveraged stock fund, UPRO. 25% in PFF, a preferred shares fund, and 22.5% in gold, GLDM. It was up 1.18% for the week. It's down 2.61% year to date and down 10.75% since inception in July 2020. Moving to the next one, the most levered and least diversified of all these portfolios. It's called the aggressive 50/50. It's basically half stocks and half bonds. So it's one third in a leveraged stock fund, UPRO, one third in a leveraged bond fund, TMF, and the remaining third divided into a preferred shares fund, PFF, and a intermediate treasury bond fund, VGIT. It was up 1.69% for the week. It's down 5.59% year to date, down 22.38% since inception in July 2020. It is suffering from its lack of diversification. When you come in on Monday and you're not feeling real well, does anyone ever say to you, Sounds like someone has a case of the Mondays? No. No, man. Last one is a levered golden ratio. This is also our youngest one. This one's 35% in a composite levered fund called NTSX. That is the S&P 500 and Treasury bonds. 25% in gold with GLDM, 15% in a REIT, O, 10% each in a levered bond fund, TMF and a levered small cap fund, TNA and the remaining 5% in a managed futures fund, KMLM. It was up 0.59% for the week. It's down 0.26% year to date and down 13.69% since inception in July 2021. It's still waiting for those small caps to go back to their high that it reached in 2021 and hasn't gotten close since. But that does conclude our portfolio reviews for the week. And 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 of review, a follow. That would be great. M'kay? Thank you once again for tuning in. This is Frank Vasquez at Risk Parity Radio signing off.

Mostly Mary [47:23]

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.