Mostly Voices [0:00]

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

Mostly Mary [0:19]

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

Mostly Uncle Frank [0:37]

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.

Mostly Voices [0:55]

It's a relatively small place. It's just me and Mary in here.

Mostly Uncle Frank [0:59]

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.

Mostly Voices [1:48]

[ocrAte] [ocrAte] [ocrAte] But now onward,

Mostly Uncle Frank [1:52]

episode 354, our first episode of season five. Today on Risk Parity Radio, we're just going to get back to what we try to do best here, which is answer your emails. But before we get to that, as we've been doing in the last couple episodes, and we'll continue doing for at least a few more episodes, we are currently running a fundraiser here. As most of you know, we do not have any sponsors on this podcast to keep it nice and unconflicted. Not gonna do it.

Mostly Voices [2:23]

Wouldn't be prudent at this juncture.

Mostly Uncle Frank [2:27]

But we do have a charity, and the charity is called the Father McKenna Center, and it serves hungry and homeless people in Washington, D.C. And I am on the board of the charity and I'm the current treasurer. Now, as I've mentioned, I had an offer from another generous podcaster who goes under the moniker the Financial Quarterback, who has offered to match donations to the Father McKenna Center for up to $10,000. We've already had a number of generous participants and I thank you very much for your generosity. But the way it works is you need to go to the donation page for the Father McKenna Center and make your donation. You can do it by credit card or debit card is the easiest way. When you do that, make a little note, there's a box for like dedications or something like that, and put in the words the Financial Quarterback Match. And we're collecting all of those and then we'll get the match at a date to be announced later since my episode on the Financial Quarterback actually has not come out yet even though I recorded it a little bit ago. We expect it to come out soon and I'll let you know when it does.

Mostly Voices [3:37]

Yes!

Mostly Uncle Frank [3:41]

So I would appreciate it if all you slumbering, idly rich people would wake up and go over to the Father McKenna website and make a donation. Well, you haven't got the knack of being idly rich.

Mostly Voices [3:52]

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

Mostly Uncle Frank [4:00]

And thank you very much for your support.

Mostly Voices [4:05]

And now without further ado, here I go once again with the email. And?

Mostly Uncle Frank [4:10]

First off, we have an email from Steve. Hey, Steve.

Mostly Mary [4:18]

And Steve writes, Uncle Frank and Aunt Mary, been on risk parity radio train since the beginning. Congratulations on your success and thank you for the many lessons.

Mostly Voices [4:26]

Unlike any schooling, You ever been through before?

Mostly Mary [4:30]

I took advantage of the two times employee matching and made a contribution to the Father McKenna Center. Top drawer. Really top drawer.

Mostly Voices [4:39]

Apologies for the long questions, but I would appreciate any thoughts

Mostly Mary [4:43]

you have on these. Question one, manage futures implementation. I am interested in the potential diversification benefits from a managed future fund such as DBMF in a decumulation portfolio. In my research, I have come across some usings that state managed futures are a zero sum game over a long period of time. Is this the case or do managed futures have an expected long term return? If they are a zero sum game, is the value of managed futures limited to its role in rebalancing, Shannon's demon? When and how to rebalance managed futures to capture the rebalancing benefits? Since the allocation would likely be relatively small, more on that later, say 5% to 10%, it seems that rebalancing on percentage drift from target on the upside, say 20%, might be the better approach than an annual rebalancing. If it continues to go up to the upside throughout a year like 2022, you end up rebalancing a few times in the year and capturing gains. Then do a check annually to ensure the fund is at the target allocation. for when the fund goes down, sideways, or not enough up to trigger the upside drift percentage rule. Is this a reasonable approach? Am I correct in my thinking that to capture the most from managed futures means signing up for a little more work throughout the year to monitor the portfolio to capture gains, if any? Question 2, asset allocation. Current situation, a few years away from retirement, hopefully. Started with an accumulation portfolio in the Paul Merriman framework. Heavy equities with tilt towards small and value. Over the last few years, been transitioning towards a decumulation portfolio, adding in intermediate term treasuries and a small 2.5% allocation toward gold. Current portfolio, 75% equities, 50% US tilted to small value and large value 10% to REITs, 25% international including an allocation to emerging. 22.5% bonds, mostly intermediate, 2.5% gold. Thoughts on swapping out the REIT allocation for insurance allocations such as KBWP? I followed your discussion around the asset class and also around Larry Swedroe and how he likes reinsurance, but it's not available for us DIYers. Is KBWP a better diversifier than REITs? My dabble in portfolio visualizers suggests that it is true, though I wonder if I am secretly looking for a way out of REITs due to their performance comparisons. Cue Crystal Ball.

Mostly Voices [7:25]

My name is Sonia. I'm going to be showing you the Crystal Ball and how to use it or how I use it.

Mostly Mary [7:32]

Is KBWP diversified enough to consider as part of the alternative portion of a portfolio? What is the minimum effective dose of the alternative ingredient for a portfolio that actually has a material impact? Are the suggested allocations to alternatives enough to move the needle over long periods of time? Proposed 50% equities, 35% U.S. tilted to small value and large value, no REITs, 15% international, including an allocation to emerging, 30% bonds, mostly intermediate, 20% alternatives, 5% gold, 7.5% managed futures, and 7.5% insurance. I know you don't think you'd like another job, but I would appreciate your thoughts. Best, Steve. I'll get you, hey, Steve, if it's the last thing I do.

Mostly Uncle Frank [8:30]

Well, I forgot to mention it before, but if you do make a donation to the Father McKenna Center, you get to go to the front of the email line. And that queue is now over six weeks long, so it's actually worth something these days.

Mostly Voices [8:45]

That and a nickel will get your hot cup a Jack Squat! And Steve took advantage of that, and so can you.

Mostly Uncle Frank [8:54]

Thank you, Steve. The best, Jerry. The best. Now let's get to your questions. Managed futures. Do managed futures have an expected long-term return? I assume you mean a positive return. The answer is yes, they do. There is actually an index of the hedge funds that follow these kind of strategies kept by Society Generale, SocGen. I will link to it in the show notes. But basically you can see from there that the Trend Following Index is up 300% since the year 2000. And you can see how it's gone up and down over time. So the return profile is actually somewhere between stocks and bonds. But as we know, the key feature there is the lack of correlation with stocks and bonds and particularly negative correlation in many environments with those two things. like we saw in 2022. But no, this is a different question from whether futures are a zero sum game because futures can be a zero sum game, yet there can be a positive return for managed futures. And the reason for that is recall that the real purpose, original purpose of futures contracts is for people who produce commodities, particularly agricultural goods, to have a way of hedging their income, essentially, allowing them to effectively sell forward some crop they're growing or something that they are accumulating physically. And hedging like that is a negative expectation kind of activity. It's basically taking a form of insurance. And so since they have a negative expectation game, you have to believe that on the other side there is a positive expectation game on the trader side, at least for ones that are following a reasonable and rigorous strategy, because there's a lot of negative expectation trading going on out there as well in futures and options contracts. And most amateurs actually lose money. But now we actually have funds like DBMF, which are replicating these indices and come to us at a reasonable cost to make this a viable asset for our portfolios because for most of their existence, it really just costs too much to pay a hedge fund to do this kind of investing, at least for normal mortals. And so this area has typically been dominated by large institutions who will allocate a certain percentage of, say, a pension fund or a endowment to these kinds of strategies, and that's who the hedge funds are really serving for the most part. And I should say that a strategy in trend following always involves a number of markets. You would never just try to trend follow one market. And so they are diversified, if you will, across at least a couple of dozen markets in most cases, and with some funds up to a hundred different markets or assets that they are working with. That's probably overkill, but that is debated in that community as to whether more is better or how much more is better rather. Getting to your rebalancing question, I don't think that the rebalancing issue has as much to do with the fact these are managed futures we're talking about as just their overall volatility characteristics. And these funds tend to have similar volatility characteristics to the stock market or somewhere around there. And so I think it's feasible simply to rebalance them with your other assets in a standard portfolio. That being said, and I've linked to this before, I'll link to it again, Michael Kitces did do a analysis of whether calendar balancing was better or whether using rebalancing bands was better, which mirrors what you're talking about when there's a drift of 20% or something like that. And he basically found for kind of simple stock bond portfolios, an allocation band strategy was better. And if you were going to use a calendar basis generally, doing it more than once a year did not improve performance. But I think part of that had to do simply with just the assets they were dealing with. Because if you do have a really volatile asset like volatility options or futures or something like Bitcoin or a levered fund, you may get more bang for your buck out of more frequent rebalancings because the idea of those things if they're so volatile is that you can buy low and sell high more often. Unfortunately, I'm not aware of any concrete research that shows exactly what the volatility characteristics are versus what the proper rebalancing strategy is for a given asset. This is still kind of a fuzzy undiscovered country area, because I think it's just really complicated and it's going to vary by portfolio. So basically you need to come up with a reasonable strategy and stick with it. If you look at our sample portfolios, we do four of them on basic calendar rebalancing annually, But then the other four, we have some kind of band structure where we look at the allocation every 15th of every month to see whether it's drifted far enough away to trigger a rebalancing. But that is an illustration of one of these kind of rebalancing band kind of strategies. So given the volatility characteristics of something like DBMF, I don't think you really need to change whatever rebalancing strategy you have when you incorporate that asset into a portfolio. But if you were incorporating some other kind of managed futures fund that had a much higher volatility, then it might make sense to change the way you're approaching it. Because in theory, you could have different sub rebalancing strategies for different assets in your portfolio, which could make it very complicated. And I don't know whether it would help you anymore, but theoretically, if you could actually match volatility to something else, that would probably be a way of optimizing it in some respect. At least those are my current thoughts on the subject. You are talking about the nonsensical ravings of a lunatic mind. Next question, asset allocation. And in particular, you were wondering if you could Exchange KBWP, which is an investment in property and casualty insurance companies instead of using REITs in a portfolio. And I think the answer is definitely yes.

Mostly Voices [15:56]

You are correct, sir, yes.

Mostly Uncle Frank [16:00]

Although let's talk about the various considerations here. First of all, both REITs and KBWP are stocks. So in a global macro perspective, they are part of your stock allocation. So whatever you were intending to allocate to stocks as opposed to bonds and alternatives, that should be part of that allocation. I would not consider it as a wholly separate kind of thing, as it's going to have similar risk characteristics and similar return characteristics over time. and in most circumstances will go up and down with the stock market. Although as we know, both REITs and these property and casualty insurance companies do exhibit very good diversification properties for a stock allocation to the rest of the stock market. So where do they fit in underneath that? Recall that in most circumstances we're trying to come up with portfolios, at least on the stock side, that are approximately half allocated to growth and half allocated to value. Now, if you look at something like KBWP or its components, which are big insurance companies like travelers and all state progressive and of course the ever popular Chubbber. I'm telling you fellas. Which seems to be Warren Buffett's new favorite thing. You will find that that is essentially a value allocation. So I would consider an allocation to KBWP as part of your value side allocation to stocks, which may mean that you pull some of that off of what you would have put in, say, small cap value or some other value allocation. Now, REITs are also on the value side of things for the most part. They are more blendy, I would say, depending on which REITs you choose because a lot of the newer REITs that are popular are not traditional real estate. They're things like cell towers and data centers. And those are less value-y, if you will, and more growth-y given their connection to technology. So a REIT fund often sits more in the middle in a blend kind of category that's half growth and half value all by itself. In our personal portfolios, we actually hold about one-third of our value allocated stocks in property and casualty insurance companies. And I use direct indexing just buying the constituents of KBWP because there's not that many of them. And if you buy the 10 largest, you pretty much covered the field. So that ends up being about one-sixth of our overall stock market allocation or about a 10% allocation overall. And I have really found that investment fascinating. The reason that I looked into it in the first place was everybody looks at what Warren Buffett and Berkshire Hathaway do. And so I also did that. But what stuck out to me was this reliance on insurance companies as a core holding of Berkshire Hathaway. And they said they did it well mostly for this float because the nature of insurance companies is much different than a lot of other businesses in that they are getting all their money upfront. and then their liabilities are going to be in the future and are going to be variable, whereas most businesses have to build or do the work first and then get paid at the end. So that made me wonder, well, if these things fundamentally operate differently, maybe they are less correlated to the rest of the stock market, and maybe that's one of the secrets of Berkshire Hathaway's success. and so I was able to run correlation analyses because there was this fun KBWP that costs a little too much but does have exactly the kinds of things that Berkshire Hathaway is holding, including now Chubb. And when I saw the low correlations they had to the rest of the market and the track record they've had at least in the past 10 or 15 years, I thought that this would be a Good choice. And it has been, particularly in years like 2022, when this allocation was actually up 10% for the year and just about everything else was down. I think it's had two down years since the great financial crisis, both being about 2% down in those years. Now, it hasn't been very exciting on the upside, but you don't really need it to be that exciting on the upside if it just at least tracks the rest of the market and it seems to. in terms of compounded annual growth rate over time. The one thing I would be concerned about with those kinds of companies would be another 2008 scenario where there is a great crash in all things financial. And I expect they would do very poorly in that kind of environment. But that just tells you to limit your allocation to them, not that they are not a useful thing to be using. All that being said, you asked whether KBWP would be diversified enough to consider it as an alternative portion of a portfolio. I would say no to that. I would say that it is part of a value stock allocation, and that's where I would slot it in. So to the extent you're using it, I would consider it part of that allocation. And I don't think you need REITs in a portfolio. They are also kind of an optional thing one might incorporate. And so for your proposed portfolio, I would call that a 57.5% allocation to stocks, 30% to bonds, and the remaining 12.5% to alternatives. And under that circumstance, I would probably up your allocation to alternatives, perhaps taking some from the equities, put them down to 55% or somewhere around there, and then take the other part of it from bonds and then slide that into your golden managed futures. that's probably going to test out pretty well. But even if you did model it as an alternative, it would work pretty well and in fact would track the overall market a bit better. So it would do better in good stock market environments, if you will, than something that had more alternatives in it. So hopefully this covers your questions, or at least most of them, and thank you for your email. Second off, we have an email from Grant.

Mostly Voices [22:41]

You can't handle the gambling problem.

Mostly Mary [22:48]

And Grant writes, Uncle Frank, it's been a while, and I thought your loyal 100% Upro Pony Rider should check in as I ponder some questions while sitting on the banks of the Brazos River here in Waco, Texas. Oh, the river.

Mostly Voices [23:01]

She knows your name. From the brussels to the wabash to the same.

Mostly Mary [23:13]

Now I have let old you pro go out to pasture. You have a gambling problem. I replaced that horse last year with several more in a levered golden butterfly style portfolio. TQQQ, TMF, TNA, GLDM, SGOV, and to have some fun, I have some MicroStrategy and other Bitcoin and Ethereum ETFs as well. Now, I could tell you the percentages of each, but this is a family-friendly podcast and I don't want to make anyone sick. Well, you have a gambling problem.

Mostly Voices [23:45]

Now on to my question.

Mostly Mary [23:48]

Has a major asset class ever collapsed to zero? Dand it's gone. What protections would one implement to prevent an imploding asset class from turning into a black hole and draining the other asset classes in a portfolio via rebalancing? Uh, what? Now, I agree this is very remote, but the odds are not zero. Someday we may be able to very inexpensively synthesize gold or lasso a golden asteroid. Quantum computers could crack SHA-256 and digital assets might lose all their value. Our government, in its infinite wisdom and ability to print money, could obliterate the bond market. We all decide the metaverse is the place to be, and no one wants physical real estate any longer. Meta, meta, meta, meta, meta. We're going to talk about a metaverse. Meta, meta, meta, meta, meta. I thought I was supposed to be the robot. I do not pretend to have a crystal ball, and I know that just because something could happen does not mean it will happen. Now you can also use the ball to connect to the spirit world. But I would like to have a circuit breaker on my asset classes in my portfolio just in case one turns into a black hole. How do you protect against this or am I just a little crazy? Happy Trails, Grant.

Mostly Voices [25:03]

You're insane, Gold Member.

Mostly Uncle Frank [25:07]

Well, it's good to have you back, Grant. It has been a while.

Mostly Voices [25:11]

Looks like I picked the wrong weight to quit sniffing glue.

Mostly Uncle Frank [25:19]

For those of you who do not know, Grant first appeared to us in episodes 104 and then in 178 and 181. And he is famous in these parts for riding the leveraged stock fund pony all through the 2010s and making his way to financial independence that way. Lucky. I suppose somebody's got to try that and you picked a good decade to do it. Do I feel lucky? Do I feel lucky? I do feel comforted in a way that you have seen fit to put 100% UPRO out to pasture, especially over the past few years. Yes.

Mostly Voices [26:00]

I have the memo.

Mostly Uncle Frank [26:04]

And your experiments with leveraged portfolios have been quite interesting. Going back to those earlier episodes is where we featured those if anybody wants to really Focus on that. All right, your question, has a major asset class ever collapsed to zero? It's gone. It's all gone. And I suppose that depends on how you define a major asset class. If you're talking about the US stock market or the US bond market or something like that, the answer is no. That has not happened to gold or managed futures or any of the things we generally talk about around here. But it does happen in certain ways. Some of it is just existential. And what I mean by that is if you hold Russian stocks and held them before the war, the value of that investment, if you're in the West, essentially has collapsed to zero, or it has a speculative value that may or may not be worth something in the future. What's all gone? The money in your account. It didn't do too well. It's gone. and that has also happened in times of war or changes in regimes in various countries. But I don't think that's what you were asking about. I think you were asking more about funds themselves. Now, although these asset classes haven't crashed to zero, there are kinds of funds that have crashed to zero. A lot of times they were based on exchange traded notes, ETNs, and are trading esoteric products like the VIX. So there was a well-known episode a few years back where a VIX fund did collapse to zero almost instantaneously. And that can happen with other speculative investments like cryptocurrencies. And it can also happen in these kind of levered funds depending on how they are constructed. Now the ones that are constructed using swaps contracts and the base assets, like some of these levered stock funds, are highly unlikely to crash to zero. I think it would be possible though, if you had a crash of, say, 50% in one day that would wipe out one of these levered funds, because they are designed to reset every day. So if something went down by a third in one day and it is a three times levered fund, it could get close to zero, I would think. Now that's never happened in the US market, although the 1987 crash was within that vicinity. Of the funds you are holding, I would suspect that TQQQ would be the most likely candidate to have that kind of an episode, because it's the most volatile. But that's really why you have a diversified portfolio, because if that is going to zero, you would think that something else in these portfolios would be having a great day and probably it's going to be something like gold because there's some kind of panic going on out there. Or if you are invested in managed futures, there may be some violent jump on some currency swap thing because none of this all happens in a vacuum. Now, as to your four random speculations, okay, I'll bite. I'll give you a short answer to each one without really doing any research. Forget about it. First one is someday we may be able to very inexpensively synthesize gold or lasso a golden asteroid.

Mostly Voices [29:31]

This is gold, Mr. Bond. I welcome any enterprise that will increase my stock.

Mostly Uncle Frank [29:40]

Well, that could be true because actually there is more gold in the ocean than there is mined on the surface of the earth. And if you could come up with some process to extract it from the ocean, that would not cost more than the gold is worth, then it would be a viable way of extracting gold. I don't think you can synthesize gold because it's an element, unless you were doing something with nuclear fusion or fission. So a lot of this is, it's not that it couldn't be done, it's just that the cost and energy expenditure to do it may exceed the value of what you're getting out of it. And obviously the cheaper it becomes, the less viable this kind of method of extraction would be. Next one, quantum computers could crack SHA-256 and digital assets might lose all their value.

Mostly Voices [30:39]

Great, we can just put that into your retirement account and make it go to work for you and it's gone.

Mostly Uncle Frank [30:46]

Well, there are many possible ways for digital assets to lose value or all their value, as we've seen with some of these efforts for algorithmic stable coins and other strange inventions. Quantum computers always is one of those things where I'm thinking, is this kind of like the flying car or the fusion power of our generation, that thing that we keep hearing about is just around the corner or the next generation will solve it. And we never quite get there because of a lot of engineering problems that are very difficult to solve. In case of quantum computing, I know a lot of that work involves very low temperatures that are very difficult to work with from an engineering standpoint. And I think with the development of these large language models, the value of pursuing quantum computing keeps going down as the value of traditional computing keeps going up. And what we're seeing more of is gigantic server farms. I think they're going to build some near Amarillo, Texas soon. And so I keep wondering whether we'll see quantum computing being used on a commercial basis in our lifetime. And I Really don't have an answer for that. Next one. Our government in its infinite wisdom and ability to print money could obliterate the bond market.

Mostly Voices [32:13]

Don't worry, we can just transfer money from your account into a portfolio with your son and it's gone.

Mostly Uncle Frank [32:19]

Well, I suppose that could happen too, but it's never really happened with the world's reserve currency, so I think a few other things have to happen before that occurs. So again, that's a probably not in our lifetime concern. where bond markets really get obliterated is if there's some kind of a war. If you go back to the American Civil War, there was an interesting economic history following that in which it was unclear at the end of the war whether the Confederate debt, those bonds, would be repaid or not, or could be repaid, either by the states or by the federal government. And then there was questions as to the value of the US bonds that had been issued. This was actually resolved by the 14th Amendment, and there is a clause in there that says that the Confederate debt will not be repaid, but all debt of the United States would be repaid, which has subsequently been invoked in a few cases as essentially a guarantee that the US government will always repay its debts or is required to under the Constitution. although that does not stop it from devaluing its currency and paying the debt in the devalued currency. There's a set of cases called the Gold Clause Cases from the early 1930s, if you are interested in pursuing that research. But that is actually the main way that bond markets get destroyed, at least in modern times, because losing a war doesn't work very well. Number four, we all decide the metaverse is the place to be and no one wants physical real estate any longer.

Mostly Voices [33:59]

You're going to really feel like you're there with other people. I'm here! I also want to be upfront about the fact that there's a ton that we just don't know yet. So we're going to approach this with humility and openness.

Mostly Uncle Frank [34:13]

Yeah, I don't think that's gonna happen, despite Mark Zuckerberg's exhortations. Meta, meta, meta, meta, meta. We're gonna talk about a meta-verse. Meta, meta, meta, meta. I thought I was supposed to be the robot. Simply because most human beings like physical comforts.

Mostly Voices [34:32]

You'll see their facial expressions. You get to decide when you want to be with other people. When you want to block someone from appearing in your space or when you want to take a break and teleport to a private bubble. Meta, meta, meta, meta. We're gonna talk about a metaverse. And we are probably not very biologically suited to living completely in a metaverse.

Mostly Uncle Frank [34:52]

I want to share what we imagine is possible. This is not the way that we are meant to use technology.

Mostly Voices [34:59]

That's too realistic.

Mostly Uncle Frank [35:03]

So your final question is how do you protect against these things? These unlikely things that could occur? Crystal ball can help you.

Mostly Voices [35:10]

It can guide you.

Mostly Uncle Frank [35:15]

Well, the main protection that you have is diversification, really, because particularly something like gold or managed futures or some thing that is going to have value independent of any stock or bond market, those things tend to become more valuable in various crises, except for your gold extraction crisis. But if there's a gold extraction crisis, then probably something in the stock market is going to become a lot more valuable because whoever holds that technology will be making a lot of money and it'll be the next Nvidia. And if you're invested in TQQQ, it'll probably go up a whole lot. So yes, the solution for all of these things is just diversification when it comes down to it. But the other thing you need to watch out for in particular is Not taking too much leverage. And I know it's worked for you for a very long time. And I'm pleased that it's worked for you. But bear in mind that that is the main reason that famous traders blow up is taking too much leverage. And whether that's long-term capital management or Jesse Livermore or any other number of traders or speculators, that is generally what bites people in the

Mostly Voices [36:29]

butt. You can't handle the gambling problem.

Mostly Uncle Frank [36:33]

So I'd have to say reducing your leverage might not be a bad idea if these are concerns for you.

Mostly Voices [36:40]

No more flying solo. You need somebody watching your back at all times.

Mostly Uncle Frank [36:48]

Hopefully that helps and thank you for your very entertaining email. It's good to hear from you again. Meta, meta, meta, meta, meta.

Mostly Voices [36:56]

This could be very positive for our society. Meta, meta, meta, meta. I hope that you will join us. Last off.

Mostly Uncle Frank [37:08]

Last off, we have an email from Alexi.

Mostly Voices [37:11]

So that's what you call me, you know, that or his dudeness or duder or, you know, Bruce Dickinson, if you're not into the whole brevity thing.

Mostly Uncle Frank [37:23]

And the dude writes, Uncle Frank, What have they done to

Mostly Mary [37:27]

our beautiful Portfolio Visualizer? Say it ain't so, AZ.

Mostly Uncle Frank [37:34]

Well, Alexei is referring to the unfortunate changes that have been made to one of our favorite free analyzers, Portfolio Visualizer. And at the end of May, I believe they were bought by somebody who has throttled down on the available free data to work with over there. in hopes of garnering more subscriptions and also monkeyed with the site to make it less user friendly in my view. So what does this mean? It means that the features where you are analyzing individual tickers, that data is restricted now to the last 10 years. So it's really not worth a whole lot to be analyzing things on that basis. What they have left intact though is the analyses for back testing or Monte Carlo simulations or anything else using asset classes as essentially the same tools and the same availability as before. And fortunately for us, that is the more important thing because we are interested first in constructing portfolios out of asset classes and then only after that looking at individual funds to match up with those asset classes. So it's still useful in the same way Portfolio Charts is on an asset class by asset class basis. It's just unfortunate that we don't have the full availability of the ticker symbol data anymore. Now at least another one of our listeners has pointed out that there is a new calculator online, and I will link to it in the show notes. goes by test.fol. And it does have some limited functionality, but it is a interesting calculator and it does have a lot of things that are useful for back testing, at least for the past 30 years, including ticker symbols and then a few other things that have been constructed out of data, including the ability to analyze managed futures back into the 1990s. And I use that one to analyze our new Optima Portfolio, our eighth sample portfolio, which also has a link on the website. But I think with all of these things, it's best to use more than one calculator for whatever you're putting together, because when you're doing comparisons between portfolios, you want to know that Portfolio A was better than Portfolio B on multiple calculators and using multiple data sets, because that just gives you much greater confidence. that what you're doing is a better choice of A over B. So it is highly unfortunate, but we will move on and I think there will probably be more things roll out in the future because that's the way the internet works.

Mostly Voices [40:20]

That's the fact, Jack! That's the fact, Jack!

Mostly Uncle Frank [40:24]

And so thank you for that observation and thank you for your email. Take it easy, dude. Oh, yeah. I know that you will.

Mostly Voices [40:33]

Yeah, well, the do the binds. But now I see our signal is beginning to fade.

Mostly Uncle Frank [40:40]

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 follow or a view. 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 [41:18]

Oh, the river, she knows your name. From the brussels to the wabash to the same. no two Journeys are ever quite the same. But the river she knows your name. Oh, the river she knows your name.

Mostly Mary [42:05]

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.