Not Uncle Frank [0:01]

A foolish consistency is the hobgoblin of little minds adored by little, statesmen and philosophers and divines.

Mostly Uncle Frank [0:10]

If a man does not keep pace with his companions, perhaps it is because he hears a different drummer.

Not Uncle Frank [0:17]

A different drummer 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.

Not Uncle Frank [0:52]

Expect the unexpected.

Mostly Uncle Frank [0:55]

There are basically two kinds of people that like to hang out in this little dive bar.

Not Uncle Frank [1:00]

You see, in this world there's two kinds of people, my friend.

Mostly Uncle Frank [1:02]

You see, in this world there's two kinds of people my friend, the smaller group are those who actually think the host is funny, regardless of the content of the podcast.

Not Uncle Frank [1:12]

Funny how, how am I?

Mostly Uncle Frank [1:13]

funny. These include friends and family and a number of people named Abby.

Not Uncle Frank [1:22]

Abby, someone Abby who Abby, normal Abby, someone Abby who Abby normal, abby normal.

Mostly Uncle Frank [1:29]

The larger group includes a number of highly successful do-it-yourself investors, many of whom have accumulated multi-million dollar portfolios over a period of years.

Not Uncle Frank [1:43]

The best, jerry, the best over a period of years.

Mostly Uncle Frank [1:45]

The best, Jerry, the best. And they are here to share information and to gather information to help them continue managing their portfolios as they go forward, particularly as they get to their distribution or decumulation phases of their financial life.

Not Uncle Frank [2:04]

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

Mostly Uncle Frank [2:11]

But whomever you are, you are welcome here. I have a feeling we're not in Kansas anymore. But now onward, episode 357. Today on Risk Parity Radio, it's time for our weekly and monthly reviews of the eight sample portfolios you can find at wwwriskparityradiocom on the portfolios page. It was a very interesting week. Very bad for the stock market again. Not so bad for our portfolios. Diversification is working and most of them were actually up in value.

Mostly Uncle Frank [2:58]

But before we get to that, a couple of things.

Mostly Uncle Frank [3:02]

First, we are running a charitable promotion these days. As most of you know, we do not have any sponsors for this program, but we do have a charity that we support. It is called the Father McKenna Center and it serves hungry and homeless people in Washington DC, and I am on the board of the charity and I'm the current treasurer, and so I appeared recently on a podcast called the Financial Quarterback that I linked to in the last episode, and they allowed us to promote the Father McKenna Center on that podcast and then offered to match contributions up to $10,000 to the Father McKenna Center. And so I'm asking all of you good people who are so inclined to make a donation now to get this match, and the way you do that is go to the donation page at the Father McKenna website that I'll also link to in the show notes, make your donation and put in financial quarterback match in the box where it allows you to make a comment or a dedication, and we'll add all that up and we'll get even more money for the Father McKenna Center.

Not Uncle Frank [4:06]

Yes.

Mostly Uncle Frank [4:08]

And I thank you kindly for everything you can do.

Not Uncle Frank [4:11]

The best, Jerry the best.

Mostly Uncle Frank [4:14]

And now, next off, it's time to attend to some of your emails, and so, without further ado, here I go once again with the email. And First off. First off, we have an email from Justin.

Not Uncle Frank [4:28]

Ahoy there, matey.

Not Uncle Frank [4:31]

And Justin writes hey, frank, my ears are burning with that last episode. Ha ha, ha, ha ha. I'll be making a donation to the Father McKenna Center to take advantage of the match. Keep up the good work there. Top drawer, really top drawer. I've really been into capital efficient funds so was pondering an evolution from Risk Parity Chronicles to Capital Efficient Chronicles or something. The name would change, but actually basic philosophy won't? I'd just be exploring how to use capital efficient funds to boost portfolios that are still, at their core, risk parity ones. I would try to do some education around them, including responsible use of UPRO, tqqq, etc.

Not Uncle Frank [5:17]

You have a gambling problem.

Not Uncle Frank [5:20]

No, you have a gambling problem how the return stacked ETFs can be brought in, plus some good old portfolio tests. In that last email to you, I shared the RPC station wagon portfolio and that is where my thinking is these days. So more like that. If I do start something like that, you'll be the first to know, justin.

Not Uncle Frank [5:42]

Well, you have a gambling problem.

Mostly Uncle Frank [5:46]

Well, now I feel like I just got out of jail and we're putting the band back together.

Not Uncle Frank [5:51]

You were the backbone the nerve center of a great rhythm and blues band. You can make that live, breathe and jump again.

Mostly Uncle Frank [6:02]

Thank you for writing in, justin. Justin did go to the front of the line for his current and past donations to the Father McKenna Center, because that is what I have to offer you here. If you do make a donation to that Father McKenna Center, I will move your email to the front of the line, and it's about a two-month line now, so it's worth something.

Not Uncle Frank [6:20]

That and a nickel, get your hot cup a jack squat, get your hot cup a jack squat.

Mostly Uncle Frank [6:31]

For those of you who do not know, justin is the author of the now dormant blog risk parody chronicles that talks about a lot of things we talk about here or did when it was active, and also a youtube channel of the same name, murph and the magic tones. And justin was mentioned by another listener in the last email and also had written in recently, in episode 350, about the station wagon portfolio that he created, and there is a link to that if you're interested there.

Not Uncle Frank [7:00]

This is the automobile you should be using the Wagon Queen family truckster.

Mostly Uncle Frank [7:04]

You think you hate it now, but wait till you drive it more importantly, justin and I share this old-fashioned notion about the internet that its best use is to share information that people are interested in talking about and not try to be monetizing everything, as it seems like in the past 10 years or so. Every time somebody creates something, there is this push or demand or expectation of monetization and sponsors and all sorts of other things, and I and Justin both share the view that that actually detracts from the quality of the information because it tends to cause conflicts, and also a focus on what the sponsors are interested in and not so much what the speaker or the audience is actually interested in. So I think we both want to keep that ethos alive of the idea of open source and Wikipedia articles and just sharing of information for its own sake and for the sake of forming friendships and communities around such information.

Not Uncle Frank [8:15]

I got this inkling. I got this idea for a business model. I just want to run it past you. Here's how it would work. You get a bunch of people around the world who are doing highly skilled work, but they're willing to do it for free and volunteer their time 20, sometimes 30 hours a week. And then what they create, they give it away rather than sell it. It's going to be huge.

Mostly Uncle Frank [8:38]

So I know you've been busy, justin, but thank you for writing in and it will be interesting to see what you do in the future. It will be interesting to see what you do in the future because I am sure the blog bug is not out of your system and you will be writing something that will be interesting to read sometime in the future. But take your time, there's no rush here. Thank you for all of your contributions to this little community we have here, or this little dive bar, which is more of how I think of it.

Not Uncle Frank [9:09]

Hey, what's happening, Norm? It's a dog-eat-dog world, Sammy, and I'm wearing milk-bone underwear.

Mostly Uncle Frank [9:15]

Hope you're doing well and thank you for your email.

Not Uncle Frank [9:19]

You'll never get Matt and Mr Fabulous out of them. High-paying gigs oh yeah, well, me and the Lord, we've got an understanding out of them. High paying gigs oh yeah, well, me and the Lord, we got an understanding. We're on a mission from God.

Mostly Uncle Frank [9:35]

Second off, Second off. We have an email from Joe.

Not Uncle Frank [9:40]

Well, it's a nice name, but the kids are going to call him Joe Blow I mean as long as you know that or Sloppy Joe. You know how are Mr and Mrs Schmo?

Mostly Uncle Frank [9:49]

And Joe writes.

Not Uncle Frank [9:51]

Frank, I recently stumbled upon your podcast from a Choose Fi podcast and I'm really enjoying the content. I wanted to say thanks for all you do and if you ever find yourself in Greenville, south Carolina, I would love to buy you a cup of coffee. A quick question While you talk extensively on the withdrawal phase of portfolios, is there a specific podcast number that speaks to the accumulation phase of life and asset mix? We are in the messy middle of life age 40, and in the heart of the accumulation phase. Our portfolio is predominantly total stock market funds and our focus is on savings rate. Am I missing something? Thanks in advance, joe.

Mostly Uncle Frank [10:33]

Greenville, south Carolina. Eh Well, I do have a cousin who lives there. Of course I have about 50 first cousins, so I have cousins living in just about everywhere you can imagine.

Not Uncle Frank [10:44]

And that's the way. Uh-huh, uh-huh, I like it. Casey and the Sunshine Band.

Mostly Uncle Frank [10:49]

Anyway, I will remember that if I happen to be going there, although I don't plan on going there anytime soon. You are correct that this podcast is largely focused on portfolios for decumulation once you have accumulated enough to retire on. You are correct, sir. Yes, and that is intentional, because it seemed to me that there was a big void in personal finance and do-it-yourself investing. When it came to this topic and when I started researching it about 14 years ago, I didn't find that much that was very convincing or useful and had to dig around and formulate or collect additional ideas. So the lack of accumulation talk is generally by design. That's not to say it's not important and I don't talk to my kids about this.

Mostly Uncle Frank [11:41]

But getting to your question, what you are doing is the right thing to do Basically, invest as much in the stock market and low-cost index funds when you're trying to accumulate. That is the simple path to wealth that Jay Collins talked about. Now I think you can improve upon that with Paul Merriman's recommendations, and his simplest recommendation that he uses for his grandkids is to create a portfolio that is one half S&P 500, or you could use total market fund or large cap growth fund and one half small cap value fund. Now you could also augment that with some international funds or other things if you really wanted to. But that two-fund formulation has a very good historical outcome and is actually much better than simply holding the total market fund or a total market fund and a total international market fund, which are both heavily weighted towards large caps and therefore miss out on a lot of what the market has to offer large caps and therefore miss out on a lot of what the market has to offer. But I do caution that whatever combination of funds you pick, you should stick with them, unless there's just something wrong with one of them that are too expensive or you just find that you made a mistake.

Mostly Uncle Frank [12:59]

But the idea is you do not want to be hopping from fund to fund based on what performed well recently, because that kind of fund hopping actually detracts from your overall returns and is one of the principal reasons that amateur investors tend to underperform markets and indexes, because they are doing this kind of fund chasing and looking at returns for the past one to 10 years and making their decisions based on that. That is a very bad process and a very bad idea. So as long as you're not doing that, I think you're going to be fine. Now I do have an episode about starting out really and then getting going. It is episode 208, which was actually inspired by a conversation I had with Paul Merriman. It is, of course, Wizard of Oz themed.

Not Uncle Frank [13:49]

Just try to stay out of my way. Just try, I'll get you my pretty and your little dog too.

Mostly Uncle Frank [13:59]

Where everybody begins in Kansas, once they start making enough money to start saving and investing, they go to Munchkin Land to figure out how to do that, and then they go to where you are, which is on the Yellow Brick Road.

Not Uncle Frank [14:14]

Follow the Yellow Brick Road. Follow the Yellow Brick Road. Follow the Yellow Brick Road. Follow the Yellow Brick Road. Follow the Yellow Brick Road. Follow the Yellow brick road. Follow the yellow brick road. Follow the yellow brick road.

Not Uncle Frank [14:29]

Follow the yellow brick road.

Mostly Uncle Frank [14:32]

Which is mostly just a lather, rinse and repeat process for saving, investing and accumulating, as you have no doubt determined. So I would go back and listen to episode 208. Check that out. Won't tell you anything, you probably don't know, but it will present it in an interesting format and I know others have found that an in or a way to discuss these things with their teenage children. That is more entertaining than typical personal finance.

Mostly Uncle Frank [15:15]

But I also would say that these days you can find almost endless resources about financial independence and getting there that cover these accumulation phases pretty well. There that cover these accumulation phases pretty well, and you'll find a lot of that sort of stuff on the Choose FI podcast or in books like the Simple Path to Wealth or the Mr Money Mustache blog and many others. And other than adding what Paul Merriman has taught us, I don't have that much to add. Forget about it, but hopefully episode 208 will help you a little bit and thank you for your email.

Not Uncle Frank [15:54]

We could jam in Joe's garage.

Mostly Uncle Frank [15:57]

His mama was screaming Turn it down.

Not Uncle Frank [15:59]

We were slaying the same old song In the afternoon, and sometimes we were playing All night long. It was all we knew and easy too, so we wouldn't get it wrong, even if you played it on the saxophone.

Mostly Uncle Frank [16:17]

Last off. Last off, we have an email from Jenzo.

Not Uncle Frank [16:22]

It's showtime, I'll sacrifice your swordsman of Lansdor and I'll summon Jinzo.

Mostly Uncle Frank [16:29]

And Jinzo writes.

Not Uncle Frank [16:31]

Hey Frank, do you have a presence on the Rational Reminder Forum? Did you know? Ben Felix and Tyler from Portfolio Charts had an epic gold debate over there last year? Boy howdy, is it something? I think we could benefit from your commentary, because they really get into the weeds. However, scrolling through the forum thread to get to the juicy parts is a real bummer. So I copied and pasted the relevant bits into a tidy google doc pdf for your perusal. The pdf is attached and the google doc link is below. Are you aware of any episodes of rational reminder where they cover risk parity or have had any guests espousing the idea? I did leave a request over there asking for them to have you or Tyler on the show, but somehow I don't think it's in the cards. Not for lack of interest. There is a thread on the Rational Reminder forum titled Risk Parity Investing for All Markets with 600 plus posts. I'm just not sure it's their style. Best Genzo.

Mostly Uncle Frank [17:30]

Well, thank you for the link and the discussion between Ben Felix and Tyler. I found that quite interesting on a couple of different levels and we'll talk about that in a minute. As a general rule, I do not participate in too many fora and I'm not on Twitter and I'm not on Reddit. I do inhabit and use Facebook frequently in a couple of groups One is the ChooseFI group, one is the Catching Up Defy group and another one is the Retirement Education group. But that is enough social media for me, other than listening to podcasts, because it just takes up too much time. And I do enjoy the Rational Reminder podcast because those guys do a really good job of covering a lot of different material and covering it quite well. I'm not aware of any discussion of risk parity that they've had on that podcast, but I don't know what their whole catalog is. But now let's talk about this large thread that you gave me and I'm not going to go through it blow by blow just for the audience's edification. What it is is Tyler and Ben Felix debating on the use of gold in a portfolio and Tyler, of course, is pro-gold and Ben Felix is anti-gold. But a lot of the discussion there. They're actually kind of talking past each other, and I'm afraid that Ben Felix is actually making a lot of straw man arguments in there, including very lengthy discussions on the price of gold from the 1500s until the early 1900s, which is interesting, but it's not that pertinent, I don't think, and he misses a lot of what the history of that was, particularly the monetary history, and you can tell that because he notes there are a couple of periods in history where the price of gold plummeted, one being around the 1500s and one being around 1900. But he never gets into the reasons why that is the case. And he's also pretending that the European markets are the only worldwide markets, wide markets, and so if you really know this history, what you know about the 1500s is that, yes, there was a lot of inflation in Europe, and the reason there was a lot of inflation in Europe is because they were on a gold and silver standard. But they were getting all of this gold and silver from the Americas as they found it and plundered it essentially and brought it back to Europe, which greatly increased the supply all of the sudden of gold and silver, which led to inflation, and anybody who knows monetary history would know that that is not like a hidden fact. The fact that he did not mention it or doesn't seem to be aware of it tells me that he's either not playing with a full deck or he's just not up on the history of it and is basically cherry picking the history he thinks is useful, while ignoring the rest of it.

Mostly Uncle Frank [20:38]

Around 1900, you had a similar event. What happened then? And this was presaged by the dispute in US politics between whether they would be using silver as well as gold for the monetary system, and this is the famous cross of gold speech by William Jennings Bryan but what happened? We had the Alaskan gold rush and also a South African gold rush in a way, which also greatly increased the amount of gold in the system and relieved what was becoming a problem. And the problem that was occurring in the late 19th century is the economies of industrialized countries like the United Kingdom and the United States and across Europe was growing faster than the money supply, because the money supply was limited by the supply of gold, and so that was another instance where the price of gold fell, or relative price of gold fell, because a new supply came on the market.

Mostly Uncle Frank [21:38]

Now, as you can imagine, when you fast forward that to modern times, we have a completely different situation. First of all, there is no big supply of gold that you expect to be coming on, unless you're thinking that, well, they're going to go to the moon and plunder the moon and there'll be a gold mine under there somewhere. But that's a kind of fanciful talk and thinking. And then the other issue is we're no longer using gold as the monetary system. We're not on a gold standard anymore, and so gold is floating against the money that we actually use, which is the dollar and related currencies, which makes it a whole lot more interesting asset in terms of whether you put it in a portfolio or not, because it functions like an alternative currency functions like an alternative currency.

Mostly Uncle Frank [22:30]

So Ben spends reams and pages of material trying to make these earlier events relevant to modern times. He doesn't really get there, though, because he's missing the reasons and history of this, which he never really addresses. And so Tyler's main point stands that if you put gold into a portfolio of stocks and bonds, it tends to perform better in terms of safe withdrawal rates and lowering the overall volatility of the portfolio. That's not very surprising, because if you think about how gold was used in the past it was used as the currency, as the store of value that people would just keep some around, the way they keep dollars around now, and gold has always been considered a store of value back to ancient times.

Mostly Uncle Frank [23:12]

Now, another interesting historical fact that I think informs these kind of conversations is that in North America it was essentially illegal to own gold or trade it after 1933 until you get to the 1970s. What the US government did was take it away as a store of value that people could use and instead substituted bank accounts with FDIC insurance insurance. And so if you think about how people looked at bank deposits prior to FDIC insurance and post that, they looked at it a completely different way. People generally did not trust banks and they would rather store gold in their house, and that is actually a very ancient idea for many cultures, especially Asian cultures and also European cultures. So this modern distaste for gold is almost an American thing, believe it or not, just because the recent history of it is that it was not available to be used as an asset in a portfolio until the late 1970s for anybody that's alive today. Now I noticed that people outside the United States and North America do not have any issue with the idea that you ought to hold some gold just as a backstop, just as a store of value. And this is true in Europe and it's still very especially true in Asia, because in most societies they are not trusting of the banking system, of the currency and of financial markets generally.

Mostly Uncle Frank [24:57]

The United States is almost unique in having such strong regulations and such a history of it since the 1930s, with the Securities Acts of 33 and 40 that allow for a trust in the system that does not exist in most other places, at least not to the same extent. So what you end up with these days is also a peculiarity of the way finance is taught academically, and Ben Felix is a product of that kind of teaching. That kind of teaching is very fixated on the capital asset pricing model that he talks about in that document you link to, and that is a very good and useful model, particularly when you're talking about trying to model businesses or debt instruments. But it's not the only model, it's not the only way of looking at financial assets, looking at trading, looking at investing, and so to a certain extent it creates a certain amount of blinders, and this kind of pervades a lot of personal finance and the financial services industry that there's this idea that the only things that are worth investing in are stocks and bonds, just stocks and bonds. Everything else is taboo, it's off the table, we shouldn't be talking about it. We can't put it in a capital asset pricing model, so therefore we can't really understand it the way we want to understand it.

Mostly Uncle Frank [26:30]

That's a limitation, that's a limited form of thinking, and what I found when I started researching this is that, yes, if you go to typical financial advisors who've only got a CFP and they are trained in this system or they are trained academically, that is what they will fixate on. But if you look outside of that, to professionals who are actually doing work at hedge funds people like Cliff Asness and Ray Dalio they are not afraid of using things outside of just stocks and bonds just because there's no capital asset pricing model. In fact, dalio cut his teeth on commodities and things like chicken in the 1970s, and so a lot of this has to do with what kind of academic or other learning tradition people came from, and I will tell you that this academic tradition is valuable, but it's not the only tradition, and there is a lot to be learned by people who are out there slugging it around in commodity pits or other venues and who have created hedge funds and other vehicles to take advantage of things besides just stocks and bonds and capital asset pricing models. So when I started really looking at this in 2010, I saw this divergence between a certain group of people that would only focus on stocks and bonds and then another group of people who were willing to consider basically all available investable assets and how to combine them and what to do with them, and I felt the latter approach, that incorporated everything that was available, was certainly a much better approach than limiting yourself to these academic topics and capital asset pricing models.

Mostly Uncle Frank [28:24]

I also get a sense and this is from my work in cross-examining financial experts is that a lot of people in finance do not appreciate that there are more ways of valuing assets than discounted cash flows or DCF-type analyses or DCF type analyses, and in fact, there are whole codes of valuation that apply to things like gold mines or natural resources in the ground or different forms of real estate, and there is a whole other world of valuation that goes well beyond discounted cash flow analyses and capital asset pricing models, and so you don't want to be boxed into a certain way of looking at the world and pretending that if you can't put it in that model, you can't use it. Because that seems to be what Ben Felix is doing here and what I see a lot of other academically oriented financial advisors doing. And you can quickly see when somebody's doing this, because what happens is they either apply double standards, in which case they apply one standard to the things they think are appropriate for investment and a different standard for those they think are not appropriate, or they are simply saying things like well, I don't know what it's worth because it doesn't have a cash flow Wrong. Well, if you're saying that you just don't understand principles of valuation, very well, I'm sorry you need to go back to school. That's not a viable argument, which is what I hear a lot of people say.

Mostly Uncle Frank [30:04]

In the end, you need to apply what I call the Bruce Lee principles to any kind of expert, guru or source of information.

Mostly Uncle Frank [30:12]

And what are those?

Mostly Uncle Frank [30:13]

Take what is useful, discard what is useless and add something uniquely your own, and don't let the fact that you only learned something one way color your ability to look at other ideas, methods and sources of information, because I do not have any trouble adopting the methodologies and thoughts of people like Cliff Asness at AQR and people like Ray Dalio, and they don't have any trouble investing in gold commodities, other strategies and other things like that.

Mostly Uncle Frank [30:49]

And the reason they don't have any trouble doing that is because they know it works, it's effective, and that's what we're really trying to get at here. What is effective? What is the best practice for getting a high, safe withdrawal rate? Once you put all the academic talk aside, you really need to focus on what are you trying to do, and if you limit your information to just one rubric or method of thinking, that is not a good approach to reaching a goal like this, which says you should take all of the information available, sift through it, it and use everything that is useful and not discard something because it doesn't fit into a particular paradigm.

Not Uncle Frank [31:34]

At times you may feel that you have found the correct answer.

Not Uncle Frank [31:39]

I assure you that this is a total delusion on your part.

Mostly Uncle Frank [31:43]

Now, of course, when I'm reading something like the discussion you linked to, I'm thinking through it as to. Well, how would I cross-examine these people about what they're saying? And I think I would raise a number of points against Ben Felix that I've been talking about here, in addition to others, because there is certainly a bias and a blinderism going on, as well as straw man arguments and the use of double standards, and it just goes to show you you should never take anything that some guru says as gospel just because most of what they say is correct. You still need to use critical thinking skills to separate out what is right and what is wrong. For whatever you're trying to do, we use the Socratic method here.

Mostly Uncle Frank [32:32]

And that applies to Tyler and it applies to Ben Felix, and it applies to Jack Bogle and it applies to me and it applies to anybody else he might be listening to. And it's not disrespectful to take issue with somebody's ideas.

Not Uncle Frank [32:48]

That was the equation.

Mostly Uncle Frank [32:51]

So never be afraid to do that. A very interesting topic and thank you for your email. You come in here with a skull full of mush and you leave thinking like a lawyer.

Not Uncle Frank [33:06]

Now we're going to do something extremely fun.

Mostly Uncle Frank [33:10]

And the extremely fun thing we get to now is our weekly and monthly portfolio reviews of the eight sample portfolios you can find at wwwriskperderatorcom on the portfolios page. Just looking at what the markets did last week, it was a very wild week, especially towards the end of it.

Not Uncle Frank [33:30]

That was weird wild stuff.

Mostly Uncle Frank [33:33]

The S&P 500 was down 2.06% for the week. The NASDAQ was down 3.35% for the week. Small cap value, represented by the fund VIOV, was one of the big losers. Last week it was down 5.62% for the week. Meanwhile, the big winners were really big winners. First one was gold.

Not Uncle Frank [33:54]

I love gold.

Mostly Uncle Frank [33:58]

Gold was up 4.04% for the week. I think it's up about 20% on the year. But the big winner was long-term treasury bonds. Our representative fund, vglt, was up 5.3% for the week. It's one of the biggest moves I've seen since about 2020. Reits, represented by the fund REET, were actually up, bucked the rest of the stock market. They were up 1.43% for the week. Commodities, represented by the fund PDBC, were down. They were down 1.64% for the week. Preferred shares, represented by the fund PFF, were down 0.53% for the week, and managed futures also took it on the chin. The representative fund DVMF was down 5.66% for the week and I believe that's largely due to the reversal in fortunes of both interest rates and the Japanese yen against the US dollar.

Mostly Uncle Frank [35:08]

The real question on everybody's mind seems to be are we moving into this recession that's been promised for a couple of years now and that might be occurring? The unemployment rate went up to 4.3% in the US and that's what's driving a lot of this, or at least what drove it on Friday. But going to the portfolios first, one's the all seasons. This is our reference risk parity portfolio. It's only 30% in stocks In a total stock market fund. It's got 55% in intermediate and long-term treasury bonds and the remaining 15% in gold and commodities. It was a big winner, or one of the big winners, last week. It was up 1.71% for the week. It's up 6.61% year to date and up 8.23% since inception in July 2020. It actually likes these kind of recessionary leaning environments. So for the month of August, we'll be taking $31 out of cash. It's at a 4% annualized rate. That'll be $240 year-to-date, I believe, if I got that right, and $1,563 since inception in July 2020. Now moving to these bread-and-butter kind of portfolios Somebody might actually use in a retirement scenario.

Mostly Uncle Frank [36:26]

First one's Golden Butterfly from Tyler. 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 and short treasuries and 20% in gold GLDM. It was down 0.05% for the week, so nearly flat. So nearly flat. It's up 7.19% year-to-date and up 29.19% since inception in July 2020. This is a good example of how having these very diverse elements, namely the long-term treasury bonds and the stocks, can often balance out when there's a lot of volatility going on in the markets. So, in terms of monthly distributions, we'll be taking $45 out of this from cash. It's at a 5% annualized rate, that'll be $341 year to date and $2,119 since inception in July 2020.

Mostly Uncle Frank [37:24]

Next, one's 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 a money market fund or cash. It was up 0.85% for the week. It's up 8.24% year-to-date and up 26.68% since inception in July 2020. We'll be taking $43 out of it from the cash we always take from the money market. In this one it's at a 5% annualized rate. That'll be $330 year-to-date and $2,082 since inception in July 2020.

Mostly Uncle Frank [38:04]

Now moving to our kitchen sink kind of portfolio, the risk parity ultimate. There's about 15 funds in it that I'm not going to go through. It was up all of 0.14% for the week. It's up 10.26% year to date and up 18.15% since inception in July 2020. We'll be taking $40 out of it for August in accumulated cash. We'll be taking $40 out of it for August in accumulated cash. That'll be $301 year-to-date and $2,288 since inception in July 2020. Currently withdrawing at a 5% annualized rate from that.

Mostly Uncle Frank [38:41]

Now moving to these experimental portfolios, which weren't nearly as hideous as they often are. Those bonds really help these portfolios, which weren't nearly as hideous as they often are, those bonds really help these portfolios. These involve levered funds, so don't try this at home. First one is the accelerated permanent portfolio. This one is 27.5 percent in a levered bond fund tmf, 25 percent in a leveraged stock fund UPRO, 22.5% in a gold fund GLDM and 25% in preferred shares fund PFF. It was up 3.45% for the week. I think it was the big winner actually. It's up 11.49% year-to-date and up 2.17% since inception in July 2020. We'll be taking $38 out of it for August out of gold GLDM we're distributing at a 6% annualized rate. That'll be $289 year-to-date and $2,473 since inception in July 2020.

Mostly Uncle Frank [39:43]

Next one is the aggressive 50-50. This is our most levered and least diversified of these portfolios. It's one-third in a levered stock fund UPRO, one-third in a levered bond fund TMF and the remaining third divided into ballast in preferred shares and intermediate treasuries. It was up 3.29% for the week. It's up 9.68% year-to-date and down 10.05% since inception in July 2020. We'll be taking $34 out of it from cash accumulated cash for August for the distribution. That's at a 6% annualized rate. It'll be $223 year-to-date and $2,458 since inception in July 2020. $458 since inception in July 2020.

Mostly Uncle Frank [40:33]

Now moving to our seventh one, the levered golden ratio. This one is 35% in a composite levered fund called NTSX, that's the S&P 500 and treasury bonds, 25% in gold, gldm, 15% in a REIT fund, o, 10% each in a levered small cap fund, tna, and a levered bond fund, tmf, and 5% in a managed futures fund, kmlm. One of the few ones that was down. It was down 0.46% for the week. It's up 9% year to date and down 5.67% since inception in July 2021. For its monthly distribution, we're taking $34 from the NTSX fund. That's a 5% annualized rate. Currently. That'll be $250 year-to-date and $1,417 since inception in July 2021. And now, moving to our last and newest portfolio, the Optra portfolio. One portfolio to rule them all.

Not Uncle Frank [41:40]

One ring to rule them all, one ring to find them. Yes, navarna rules. Yeah, yeah, yeah, cool.

Mostly Uncle Frank [41:47]

So this one has 16% in a levered stock fund, upro, 24% in a composite worldwide value fund, avgv, 24% in a strips treasury bond fund, govz, and the remaining 36% divided into gold and a managed futures fund, gldm and DBMF. It was down 0.57% for the week. It's up 0.10 year-to-date and up 0.10 since inception in July 2024. It's only a month old, so we'll be taking $51 out of it. It's going to come out of AVDV for August. It's at a 6% annualized rate and that's also $51 year-to-date and $51 since inception.

Mostly Uncle Frank [42:36]

It's interesting that Strips Bond Fund, govz is actually up almost 9% in the last month and I think most of that occurred actually on Friday. But now that does complete our weekly and monthly portfolio reviews. This is really a good example in the past week or so of how having diversified assets can really ameliorate a lot of the volatility in the stock market when the stock market is doing particularly poorly, like it just has. It doesn't always work out that way, not right away, but sometimes it does, and you can see the results from the past week. And so what's going to happen next?

Not Uncle Frank [43:14]

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

Mostly Uncle Frank [43:21]

Yeah, that's what our crystal ball always says here at Risk Parity Radio. The only thing I would predict is that it's going to be pretty volatile, for a little while at least. But we shall see. We shall see. But now I see our signal is beginning to fade. If you have comments or questions for me, please send them to frank at riskparityradiocom. That email is frank at riskparityradiocom. Or you can go to the website wwwriskparityradiocom. Put Radiocom. Or you can go to the website wwwriskpartyradiocom. Put your message into the contact form and I'll get it that way. If you have any chance to do it, please go to your favorite podcast provider and like subscribe. Give me some stars. A follower review, that would be great. Okay, thank you once again for tuning in.

Not Uncle Frank [44:04]

This is Frank Vasquez, with Risk Party Radio, signing off guess you only get one chance in life to play a song that goes like the Risk Parody Radio Show is hosted by Frank Vasquez.

Not Uncle Frank [44:41]

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.