Not Uncle Frank [0:01]

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 are new here and wonder what we are talking about, you may wish to go back and listen to some of the foundational episodes for this program.

Not Uncle Frank [0:50]

Yeah, baby, yeah.

Mostly Uncle Frank [0:52]

And the basic foundational episodes are episodes 1, 3, 5, 7, and 9. Some of our listeners, including Karen and Chris, have identified additional episodes that you may consider foundational, and those are episodes 12, 14, 16, 19, 21, 56, 82, and 184. Whoa, and you probably should check those out too, because we have the finest podcast audience available.

Not Uncle Frank [1:26]

Top drawer, really top drawer.

Mostly Uncle Frank [1:31]

Along with a host named after a hot dog.

Not Uncle Frank [1:34]

Lighten up Francis.

Mostly Uncle Frank [1:37]

But now onward, episode 365. Today, on Risk Parity Radio, it's time for our weekly portfolio reviews of the eight sample portfolios you can find at wwwriskparityradiocom On the portfolio page. Although it was the worst week for the stock market, of this year, I think, or sometime last year.

Not Uncle Frank [2:10]

it was not so bad for us thanks to those treasuries.

Mostly Uncle Frank [2:11]

But before we get to that, I'm intrigued by this, how you say emails and First off. First off, we have an email from Michael.

Not Uncle Frank [2:21]

Let's get Mikey, yeah.

Mostly Uncle Frank [2:23]

And Michael writes.

Mostly Mary [2:25]

Just found your podcast today and it is excellent. I'm listening to older episodes now. I just made a contribution to the Father McKenna Center and I did mention the financial quarterback. In case the match is still available. I'm currently retired and looking to update my target date investment to something with more risk parity.

Mostly Uncle Frank [2:45]

Well, welcome to our world, Michael.

Not Uncle Frank [2:48]

Oh, hey, heave. Now enters His Holiness Takamata, the Grand Inquisitor of the Spanish Inquisition.

Mostly Uncle Frank [3:03]

And you went to the front of the line because you made a donation to the Father McKenna Center.

Not Uncle Frank [3:08]

Yes.

Mostly Uncle Frank [3:09]

Now, we don't have any sponsors on this podcast, but we do have a charity that we support. It's called the Father McKenna Center and it serves hungry and homeless people in Washington DC. Full disclosure I am on the board of the charity and am the current treasurer, and you can donate to the charity in two ways. You can either go to our support page and join us on Patreon, and all of that money goes to the Father McKenna Center, or you can do so directly by going to the donation page at the Father McKenna Center website, which may be easier for tax purposes. What a guy in a suit.

Not Uncle Frank [3:45]

No, it's a tax collector. Hide us SpongeBob.

Mostly Uncle Frank [3:50]

And either way you do that, you will get to go to the front of the email line. Now I want to thank all of our recent donors who gave in connection with the Financial Quarterback Matching Program. We did get over $10,000 in that. It was $11,774 or something like that. It wasn't the exact number, but it was close. For those of you who are in the Washington DC area, we are having our largest annual fundraiser this month, which is called the Walk for McKenna, and people make donations and then we all go down and have a Walk for McKenna on the streets that Father McKenna used to walk. He actually had a reputation for breaking up craps games and taking all the money and then giving it to other people who needed it, but he really was quite a character. Anyway, we have put in using the Patreon money. We're sponsors of the Walk for McKenna again. This year we will have the Risk Parody, radio name and icon on the t-shirt.

Not Uncle Frank [4:55]

Yeah, baby, yeah.

Mostly Uncle Frank [4:57]

And I think we're getting about eight t-shirts. So if you want one, let me know, since I can't wear eight T-shirts all at once. But anyway, if you are in town on September 28th that's the Saturday and would like to come down to I Street North Capitol and I Street at about 8 o'clock in the morning, you can join us on our walk and then Mary and I usually go out and have breakfast after that with whomever is around you on the motorcycle.

Not Uncle Frank [5:31]

You two girls Tell your friends Reparking, reparking.

Mostly Uncle Frank [5:36]

And so if you're interested, come on down. And if you are interested in making an additional donation for the Walk for McKenna, you can do that at their website and I will link to that in the show notes.

Not Uncle Frank [5:47]

We're on a mission from God.

Mostly Uncle Frank [5:49]

Now, since you are new here, I do invite you to go back and listen to the earliest episodes, in particular episodes 1, 3, 5, 7, and 9, which will give you an overview of what we're trying to do here. And others have found other episodes to be foundational and I've listed those in the intro, so you might go check those out. And, in addition to those, you might check out episode 109, which was our first rebalancing episode that I know a lot of people have gotten something out of. Episode 208 is for new investors.

Mostly Uncle Frank [6:23]

Episode 209 is one of my favorites, which addresses why some people seem to be very pessimistic about safe withdrawal rates and tend to make up reasons not to spend their money. And then episode 276 is a history of the financial independence movement that I know some people have enjoyed listening to. But you can also search all the episodes at the website. On the podcast page there's a search bar, but there's also a link to the RSS feed page, which is all of the episodes on one web page, and you can word search there as well, because there's a lot of episodes and so listening to every one may not be a good use of your time, although you are welcome to do so.

Not Uncle Frank [7:16]

So welcome aboard and thank you for your email.

Not Uncle Frank [7:34]

He likes it. Hey, mikey, second off, second off. We have an email from Garrison Jumper Curp Pup, harrington, harrington, thaddeus, hop, hopperdy, hopperdy, archibald Bane, the dog with the longest name in the world. The dog with the longest name Anne Garrison writes.

Mostly Mary [7:56]

Hi Frank, I am really intrigued by the Optra portfolio, but I'm having difficulty assessing how risky it is to hold 16% UPRO in a portfolio like this. I'm not worried about the gut-wrenching volatility, as we can see from the back test that when UPRO was down 95% plus, the Optra portfolio was only down about 20%. However, if the fund actually went to zero, there would be no way to rebalance into it and catch the three times returns on the way back up. In the UPRO prospectus it specifically says if the index approaches a 33% loss at any point in the day, you could lose your entire investment.

Mostly Mary [8:42]

Would the circuit breaker that halts trading after a 20% drop in one day prevent this scenario? It's my understanding that the circuit breaker only halts trading, but the true price could continue to drop and the market could open the next day down significantly. However, the 3x leverage is reset daily in UPRO, so maybe this wouldn't be an issue. What do you think Would circuit breakers prevent a 33% single day drop? All that being said, is this a dogs and cats living together type situation in which my portfolio would be the least of my worries? You?

Not Uncle Frank [9:18]

can't handle the dogs and cats living together.

Mostly Mary [9:21]

I would love to hear your thoughts on all this. Thank you so much for all you do. It's greatly appreciated, garrison.

Mostly Uncle Frank [9:29]

All right, just by way of background and to get everybody up to speed, the Optra portfolio is a new sample portfolio we introduced in July of this year and it's discussed in episode 349 in detail, so I'm not going to go through all of that again here. But the idea of it was to create a kind of return-stacked portfolio that would have similar risk characteristics to a 100% stock portfolio but be much more diversified and so have better risk-reward characteristics. And so it involves a bit of leverage, including 16% devoted to UPRO, which is a levered S&P 500 fund. Now everything you say is correct here, that it is designed to reflect the S&P 500 on a daily basis. So if the S&P 500 goes down 2%, you probably go down 6%, or if it goes up 2%, it'll go up 6% and vice versa. So you can imagine a scenario where if the S&P 500 were to go down by 33% in one day, yes, it could potentially wipe out this holding.

Mostly Uncle Frank [10:50]

Now the S&P 500 has never done that. The worst day on record is that 1987 crash, when I think it was down either 22% or 25%, and that would be fairly catastrophic. Now I'm not sure exactly how the circuit breakers would work in such a circumstance, just because it has not occurred in 37 years or so. We did have similar things occur, though, during the pandemic, where you saw extreme drops in the S&P 500, not quite that extreme and UPRO dropped accordingly, although it did recover very quickly. So, yes, it is kind of a dogs and cats living together kind of scenario.

Not Uncle Frank [11:35]

Real wrath of God type stuff Exactly.

Mostly Uncle Frank [11:38]

But I tell you that is the reason why the exposure of the portfolio itself is limited to 16%. I think that to the extent that you're going to use some kind of a levered fund in a portfolio, that you ought to reduce the exposure so that, even if it gets destroyed for some reason, the rest of the portfolio is not going to get destroyed.

Not Uncle Frank [12:03]

That dog's a menace to the community.

Mostly Uncle Frank [12:10]

I'm taking him to the sheriff and make going to get destroyed, and in fact I would imagine that either the treasury bonds or the managed futures in that portfolio would have a very good day on such an occasion or shortly thereafter. But yeah, what would happen is eventually you would rebalance the portfolio and buy back UPRO or whatever was put in upro's place, because I'm sure there would be something that would be put in upro's place, even if that fund itself did blow up.

Mostly Uncle Frank [12:34]

but this is also why I consider a number of these sample portfolios to be experimental it could work and are not something I'd be comfortable betting the farm on, although some of you, I know, are much more aggressive than I choose to be, but a lot of you are also much younger and have much time to recover should your crazy methods not pan out.

Not Uncle Frank [13:07]

You have a gambling problem.

Mostly Uncle Frank [13:10]

I do have at least one listener who just rode YouPro for the better part of the decade between 2010 and 2020 and reached financial independence that way rather quickly in fact.

Not Uncle Frank [13:22]

Well, you have a gambling problem.

Mostly Uncle Frank [13:25]

But we do have to attribute some of that to being lucky. Lucky, anyway, you can also get an idea of what kind of beating it might take after weeks like this, and you can see in that Optra portfolio that Upro has dropped to less than 15% of the overall portfolio, which is a significant drop, but on the other hand it's not that significant in relationship to the entire overall portfolio, to the entire overall portfolio, and it's been largely made up for in this circumstance by the performance of the Strip's Treasury Bond Fund in there, which is essentially up more than UPRO is down. Anyway, it should be an interesting ride.

Mostly Mary [14:07]

Uh, what it's gone, it's all gone.

Not Uncle Frank [14:27]

Hopefully that helps and thank you for your email, including the teacher. She asked for a river that started with G. At the blackboard he listed 103. When she held up a tidbit and told him to speak, he replied not in English but in Latin and Greek. Though the tricks that he mastered were cause for acclaim, he also possessed a remarkable name, mr Cobb. Would you mind if I try that name? Go right ahead. Mr Brown, harrison Garrison, bobbletee Bee, cornelius Aurelius Rover, miggy Daniel, nathaniel Hooligan, flea Horowitz, huntington, climber, mick Tree, snooper O'Flaherty, jumper Kerplop, harrington, arrington, thaddeus Hop, hopperdy, hopperdy, archibald Bane, the dog with the longest name.

Not Uncle Frank [15:19]

Last off.

Mostly Uncle Frank [15:21]

Last off, an email from Matt.

Not Uncle Frank [15:25]

My dad said he listened to Matt Damon and lost all his money. Yes, everyone did, but they were brave in doing so.

Mostly Mary [15:31]

And Matt writes Hi, uncle Frank and Aunt Mary. I wanted to send my thanks for all you do. Earlier this year, I discovered your podcast. You've helped fill in some missing pieces to my financial puzzle. A little bit of history In 2008, my wife and I were introduced to the book the Total Money Makeover from Dave Ramsey. This book helped us with budgeting and getting out of debt basic, foundational stuff that many struggle with, including us. At that time, however, once we progressed through the first few baby steps, we felt like something was lacking. We weren't satisfied with being debt-free and investing 15%. That's not an improvement. In 2017, I discovered the financial independence movement through Chisify and Mad Scientist. It was like manna from heaven. The concepts discussed in those two podcasts were exactly what we were looking for. However, I couldn't fully get behind going into retirement with just total stock market and total bond market funds, as is often discussed in the financial independence community.

Mostly Uncle Frank [16:36]

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

Mostly Mary [16:40]

I think they are a great starting point but, as with Dave Ramsey, I felt there had to be more.

Not Uncle Frank [16:46]

You are correct, sir. Yes.

Mostly Mary [16:49]

Fast forward to earlier this year, when I discovered your podcast Once again, manna from heaven. You filled in the missing pieces with the concepts discussed in Risk Parity Radio. Our eternal thanks. Over the years, there have been discussions on who should be included in the Mount Rushmore of financial independence. In my opinion, your name has to be included. Although Risk Parity Radio is focused on portfolio allocation and related topics, I would argue that having a portfolio which allows a higher drawdown with less concern over major market drops allows a person to reach financial independence sooner.

Not Uncle Frank [17:36]

That was the equation. Existence Survival must cancel out programming.

Mostly Mary [17:48]

Keep on rockin'. Ps. I love all the sound clips. As a child of the 80s and 90s, they bring back many good memories.

Mostly Uncle Frank [17:57]

Well, thank you for the compliments, Matt. You're too kind.

Not Uncle Frank [18:00]

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

Mostly Uncle Frank [18:06]

Just considering your journey, I think it is kind of a typical journey I see a lot of people go through in terms of their understanding of personal finance, and it seems to have essentially four steps that you can take.

Mostly Uncle Frank [18:21]

And the first one is that baby step kind of thing you do when you don't know how to do something and so somebody just gives you a list and says do this, then do this, then do this, and it's relatively easy to follow and you kind of get your bearings and get your sea legs, as it were.

Mostly Uncle Frank [18:39]

So I call that the baby steps, for obvious reasons. Now, of course, the problem with the baby steps is it doesn't get you where you need to be. You do need to become a financial adult at some point, need to become a financial adult at some point, but I think the financial services industry and Mr Ramsey would prefer that you not go beyond the baby steps, because what they want you to do next is to hire somebody who they are affiliated with and will hopefully pay them advertising money or some kind of kickback or remuneration, and that's a lot of the way the financial services industry actually works. They put out these articles that say just do these four things, or just do these five things and then, if you need to do more than that, go consult a financial advisor, who is conveniently advertising at the bottom of this page.

Not Uncle Frank [19:33]

A, b, C, a, always B, b, c. Closing, always be closing, always be closing.

Mostly Uncle Frank [19:45]

A lot of Forbes articles and Kiplinger articles are like that now.

Not Uncle Frank [19:50]

Because only one thing counts in this life Get them to sign on the line which is dotted.

Mostly Uncle Frank [19:57]

And so, yes, it's a great place to start, but you're not going to get where you need to go just by doing that. Now, the second phase I see people go through after that is usually what I call the shiny object syndrome phase, and it looks like you may have avoided that or at least sidestepped it. Mostly, what happens there is, after you learn a little bit about finance, you start seeing all these things out there that people are promoting, and these include robo-advisors and target date funds and various methodologies for using insurance products as investment vehicles.

Not Uncle Frank [20:36]

Are you stupid or something?

Mostly Uncle Frank [20:39]

And all of these things have in common, as here is the magic button solution just do this and you're on your way to financial nirvana.

Mostly Uncle Frank [20:51]

Mama says stupid is as stupid as it is, and I should also include in this category sort of retail formulations that you'll get at O'Mara Jones or a place like that or something like Personal Capital will put you in Some kind of complicated formulaic thing that they say is sort of the financial solution to everything, and a lot of people are drawn into that kind of marketing and that is what goes on mostly in the financial services industry. Come over here and we'll give you this magic formula and then you'll be done.

Not Uncle Frank [21:27]

A guy don't walk on the lot lest he wants to buy.

Not Uncle Frank [21:30]

He's sitting out there waiting to give you their money. Are you going to take it?

Mostly Uncle Frank [21:38]

Thankfully, it appears you've sidestepped that quagmire, but then you did get into 2017, into the formulas that work stage. What I mean by formulas that work are things that DIY investors can commonly do that make sense, because they reduce their fees and do actually get people where they need to go, because they are actually applying good financial principles and practices. And so you end up with two fund portfolios and three fund portfolios and a bunch of portfolios named after a bunch of different people, and this is typically heavily guru-centric and, frankly, most people just stop there for the most part, at least most people I've seen in financial independence communities Because, in truth, yes, that is all you may need, especially if your tendency is not to spend that much money anyway relative to how much you've accumulated. If that is the case, then any one of these kinds of formulas out of a personal finance book are probably going to work just fine for you.

Not Uncle Frank [22:48]

That is the straight stuff. Oh funk master.

Mostly Uncle Frank [22:51]

I think the latest and greatest invention in this department are finance clubs of some kind run by somebody or some group of people.

Not Uncle Frank [23:01]

Please accept my resignation. I don't want to belong to any club that will accept me as a member.

Mostly Uncle Frank [23:07]

And the good things about these formulaic approaches is that they do work. Formulaic approaches is that they do work. The bad thing about them is they encourage a kind of groupthink or belief that whatever they are following is kind of some Dead Sea Scroll. That is the secret to the universe of finance and to deviate from it is going to be a problem.

Mostly Mary [23:29]

That's not how it works. That's not how any of this works it works.

Mostly Uncle Frank [23:37]

That's not how any of this works, and so people in this category often have trouble grasping ideas that are outside of what they've essentially signed up for in their book or club or whatever they're doing Now in order to get beyond that. Then you are getting to the fourth stage, which is to understand the principles that you're applying, because these formulas come out of principles and represent one way to apply them. What are those principles? The ones we talk about here are the Holy Grail principle, which goes back to Harry Markowitz's basic idea of diversification and how that applies, not only within asset classes like a stock portfolio, but across asset classes like stocks, bonds and alternative investments. That's one principle we apply. Another one is called the macro allocation principle, which is actually described in chapters 18 and 19 of Jack Bogle's Common Sense Investing, which is probably the least referred to part of that book, but I think is one of the most important ideas to get across that all portfolios with similar macro allocations are going to have similar performances over time in terms of their overall returns. What's going to be different about them is how those returns are expressed and also the volatility involved, because the more diversification you can get into a similarly risky portfolio, the better risk-reward characteristics it'll ultimately have by being less volatile. And then the third principle that we like to apply here is the simplicity principle, which goes to trying to use the fewest components you need, but also making sure that they are not overly expensive, and doing things like using ETFs because they are more efficient than mutual funds, so on and so forth. That is actually the least important of those three principles.

Mostly Uncle Frank [25:33]

The problem I see in the people that are applying formulaic versions of these principles is that they fixate on simplicity above all else, and if you do that, that's how you end up with a one, two or three fund portfolio and refuse to look beyond that because it's quote not simple enough, or my version is simpler. That is putting one principle ahead of the more important one, which is about diversification, that holy grail principle. And as Joe Salcihai of Stacking Benjamins has recently quipped in a couple of things I've heard him talk about, it's really not that hard for a do-it-yourself investor to be able to manage a few more funds than one, two or three. It's not a big leap to be managing between five and ten funds, and so the simplicity principle is not an excuse, or should not be used as an excuse not to look beyond the simplest formulation, to other things that work better for other reasons.

Mostly Uncle Frank [26:36]

And this application of principles is the way that we try to run this podcast. On that idea, we are applying financial principles to portfolio construction and not simply coming up with a formula and saying this is the best thing for everybody to do because it's simpler and easier and you don't need to look at anything else. We're going to look at other things here. We're going to look at what else is there, and that's why the sample portfolios are just that they are just samples. They are not intended to be the last word in anything, and some of them are just experiments, as we've talked about earlier.

Not Uncle Frank [27:18]

Look away, I'm hitting you.

Mostly Uncle Frank [27:21]

And the purpose of that experimentation is to learn more about this over time, and hopefully we will never stop learning. We will never say this is the be-all and end-all of portfolio construction. What we will say is this is the best we think we can do right now, today, in the year 2024. And it's probably different from the best you could do in 2016 or 2010 or 2006. Because personal finance is also an evolving technology.

Mostly Uncle Frank [27:56]

So, while I appreciate your reference to Mount Rushmore, I actually in some ways do not approve of that, that idea that we should be looking to certain guru people who had all the answers and that it's set in stone. But I wouldn't mind having a kind of Mount Rushmore that you could continue building on, that had not only the people but the principles up there, and so I'd rather be Gutzon Borglum than any of the people on Mount Rushmore, because Gutzon Borglum was the sculptor who designed the whole monument and oversaw its construction, and that was not the only famous project he did. So we want to be builders and architects and artists as we work on our own versions of Mount Rushmore because you're entitled to make your own and I would always apply the principles of Bruce Lee that we mentioned here, which are when you are given some teachings of an expert or a manual from an expert. You need to be able to look at that critically and ultimately, what you want to do is take what is useful from those teachings, discard what is useless, or at least useless for you, and then add something uniquely your own. Now that something you add could come from another expert, and I suggest that that's the way you combine things, because you don't need to reinvent the wheel here either.

Mostly Uncle Frank [29:28]

That's the way you combine things, because you don't need to reinvent the wheel here either, and I like to say that almost nothing I say on this program is original to me.

Mostly Uncle Frank [29:35]

I stole it from somewhere else, from somebody who had studied it much longer and much harder, and all we are really trying to do here is combine the best ideas that we can find with respect to personal finance, portfolio construction and the goal that we have here, which is to try to spend as much money possible out of a portfolio and still keep it sustainable, which is different from many, if not most, of the people in the FI community, but I am hoping, as you observed, that we can get people to financial independence more quickly, at least the ones who are willing to actually spend their money once they get there, because not everybody started out saving and investing when they were 19 years old in a disciplined manner, and so if we can get people to financial independence more quickly and then keep them there, that would be a goal I would hope to accomplish, at least for those who are interested.

Not Uncle Frank [30:36]

Once you look back on it, you will never turn back.

Not Uncle Frank [30:39]

You'll never go back to the old ways and the old language and the old neglect Never.

Mostly Uncle Frank [30:46]

And I'm glad you like the sound clips.

Not Uncle Frank [30:48]

All we need to do is get your confidence back, so you can make me more money.

Mostly Uncle Frank [30:54]

And thank you for your email.

Not Uncle Frank [30:57]

And now for something completely different.

Mostly Uncle Frank [31:00]

And the something completely different thing we're going to do now Is our weekly portfolio reviews, of the eight sample portfolios you can find at wwwriskparityradarcom on the portfolios page. As I mentioned before, it was a horrible week for the stock market, probably the worst in the entire year. Just looking at what happened the S&P 500 was down 4.25% for the week. The NASDAQ was down 5.77% for the week. Small cap value, represented by the fund VIOV, was down 4.25% for the week. The NASDAQ was down 5.77% for the week. Small cap value, represented by the fund VIOV, was down 4.54% for the week. Gold was down also.

Not Uncle Frank [31:40]

I love gold.

Mostly Uncle Frank [31:43]

Not down so much. Gold was down 1.14% for the week and the only bright spot here was long-term treasury bonds. Our representative fund VGLT was up 2.86% for the week. Reits were actually flat. They're probably benefiting by lower interest rates. Our representative fund REET was down 0.19% for the week. Commodities also took a big hit. Representative fund PDBC was down 3.97% for the week. Preferred shares were almost flat. Our fund PFF was down 0.97% for the week. Preferred shares were almost flat. Our fund PFF was down 0.03% for the week and managed futures managed to be down a little. Representative fund DBMF was down 1.64% for the week.

Mostly Uncle Frank [32:43]

Now moving to these sample portfolios. First one's the all seasons portfolio. This is a reference portfolio that's only 30% in stocks, 55% in intermediate and long-term treasury bonds and 15% in golden commodities. It was barely down this week. It was down 0.13% for the week. It's up 7.94% year-to-date and up 9.59% since inception, july 2020.

Mostly Uncle Frank [33:10]

Moving to our bread and butter kind of portfolios. First one's 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 GLDM. It was down 1.07% for the week. It's up 8.63% year-to-date and up 30.93% since inception in July 2020. Next one's golden ratio this one's 42% stocks in three funds, 26% in long-term treasury bonds, 16% in gold, 10% in a REIT fund and 6% in cash in a money market. It was down 0.87% for the week. It's up 10.31% year-to-date and up 29.11% since inception in July 2020. Now moving to our kitchen sink kind of portfolio the risk parity ultimate. I will not go through all of these funds. There are about 15 of them. It was down 1.38% for the week. It's up 11.39% year-to-date and up 19.28% since inception in July 2020. Now moving to our experimental portfolios that employ levered funds.

Not Uncle Frank [34:29]

Surely you can't be serious. I am serious.

Mostly Uncle Frank [34:33]

And don't call me Shirley they were not nearly as hideous this week as they are some weeks when the stock market is down. First one wasn't hideous at all. The first one is the accelerated permanent portfolio. It's 27.5% in a levered bond fund TMF, 25% in a levered stock fund UPRO, 25% in a preferred shares fund PFF, and 22.5% in gold, GLDM. It was down all of 0.28% for the week. It's up 14.53% year-to-date and up 4.96% since inception in July 2020. Next one's the aggressive 50-50. Inception in July 2020.

Mostly Uncle Frank [35:14]

Next one's the aggressive 50-50. It's our least diversified and most levered portfolio. It's one-third in UPRO, the levered S&P 500 fund, one-third in TMF, a levered bond fund, treasury bond fund, and the remaining third divided into an intermediate treasury bond fund and a preferred shares fund, kind of as ballast. It was down 1.05% for the week. It's up 12.42% year-to-date and down 7.81% since inception in July 2020. Next one is the levered golden ratio. This one's 35% in a composite fund called NTSX, 35% in a composite fund called NTSX that is, the S&P 500 and Treasury bonds levered up 1.5 to 1. It's got 25% in a gold fund, GLDM, 15% in a REIT O, 10% each in TMF, a levered bond fund, and TNA, a levered stock fund. It's a small cap fund. The remaining 5% in a managed futures fund, KMLM. It was down 2.09% for the week. It's up 10.87% year to date and down 4.05% since inception in July 2021.

Mostly Uncle Frank [36:23]

And the last one is this new Optra portfolio One portfolio to rule them all. A portfolio, one portfolio to rule them all. All shall love me and stand in a levered stock fund Upro. 24% in a composite value-tilted fund called AVGV from Avantis that has both domestic and international components. 24% in a Strips treasury bond fund GOVZ, and the remaining 36% divided into gold, GLDM, and a managed futures fund, DBMF. It was down 2.04% for the week. It's up 1.87% year-to-date and up 1.87% since inception in July 2024. So it's actually only been around for two months.

Mostly Uncle Frank [37:42]

And that concludes our portfolio reviews. And what you see here is kind of the typical performance of these kind of portfolios. As you go into a recession and as interest rates begin to fall, Particularly if the stock market is having trouble, in that kind of environment, you do see treasury bonds increase in value, which tends to smooth out the overall performance of these portfolios. We actually haven't had this kind of environment yet since we started these portfolios, since we started them after the 2020 recession. So it'll be interesting to see them go through this, Because we know now that interest rates are going down. We just don't know by how much and how quickly, or any of that other stuff.

Not Uncle Frank [38:25]

You don't know, I don't know, nobody knows.

Mostly Uncle Frank [38:29]

But we don't really need to know. All we need to know is that we have things that do at least okay in that kind of environment, even if the stock market doesn't, which it usually doesn't forget about it. It's also interesting to note that REITs, although they're part of the stock market, are not suffering nearly as much, and that is likely due to the fact that interest rates are going down, which does tend to benefit REITs, as they are often used as a kind of bond substitute by many people. But now I see our signal is beginning to fade. We are actually going on hiatus for the next couple of weeks here, so you will not hear from us until the end of the month.

Mostly Mary [39:09]

Uh, what it's God? It's our God.

Mostly Uncle Frank [39:13]

We got things to do, places to go, people to see.

Not Uncle Frank [39:16]

As they shake hands with the devil, when they scream to the burning gates of hell.

Mostly Uncle Frank [39:20]

But never fear, we'll be back at it by the end of September.

Not Uncle Frank [39:25]

And you won't be angry. I will not be angry.

Mostly Uncle Frank [39:44]

We'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 follower of you, that would be great, okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Parody Radio Signing off.

Not Uncle Frank [40:07]

We taught him gin rummy. The dog was astute. He not only learned it, but he beat us To boot. We taught him to mumble At night. In disguise, he entered a contest and won the first prize. He mastered astronomy, botany too. There was hardly a thing that the dog couldn't do. Amazed by his genius, we enrolled him at Yale, where he died of the croup. That's the end of my tale. Oh, that's a very sad ending. Although the weather in New Haven is notoriously damp, I remember in my undergraduate days Harrison Garrison, bubble, tv, cornelius Aurelius, rover, mcgee, daniel, nathaniel, a hooligan, flea Barowitz, huntington climber mctree, snooper, o'flaherty, chopper, putter, plop, harrington, harrington, thaddeus, hop, hopperdy, hopperdy. Archibald Bain, the dog with the longest name. The dog with the longest name.

Mostly Mary [41:06]

The Risk Parod 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.