Mostly Voices [0:00]

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

Mostly Mary [0:18]

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

Mostly Uncle Frank [0:37]

Thank you, Mary, and welcome to episode 45 of Risk Parity Radio. Today on Risk Parity Radio, it is time for our weekly portfolio reviews and to discuss the distributions that we'll be taking out of our sample portfolios. for January. These are the sample portfolios you can find at www.riskparadioradio.com on the portfolios page. I am going to try and keep it brief today. My voice is still not recovered from this cold. But taking a look at the overall markets, we saw last week the S&P was up 1.43% Nasdaq was up 0.65%. Long-term treasury bonds represented by the ETF TLT were up 0.33%, and gold was up 1.01%. REITs represented by the Global REIT ETF R E E T were up 1.23%. Commodities represented by the fund PDBC were up 0.86%. and preferred shares represented by the ETF PFF are up 0.76%. This was an unusual week, maybe just because it's the end of the year, but everything went up and that doesn't happen very often. But it did result in some nice gains for the portfolios. And going through the sample portfolios, starting with the All Seasons portfolio, this is our most conservative portfolio. It is only 30% in stocks in the Vanguard Total Stock Market Fund, VTI. And then it's got 55% in long-term treasuries. I'm sorry, there's 40% in long-term treasuries and 15% in intermediate treasuries. And those are represented by the ETFs TLT and VGIT. And then the remaining 15% is divided into gold and commodities and the funds GLDM and PBDC. So this one was up 0. 57% for the week. It is up 4.6% since inception in July. And for January we will be removing $35 from the cash portion of this because it is accumulated there. We are removing at the rate of 4% annually on a monthly basis. For the history of these distributions, we have taken out $206 total from a fund that started with $10,200. And those distributions have come from a variety of sources. $35 has come from GLDM, $33 from VGIT, the intermediate treasuries. $69 has come from the stock fund VTI. and then $69 has also come out of cash as it has accumulated. Moving to our next portfolio, which is the Golden Butterfly, and this one is the one that is 20% Vanguard Total Stock Market, 20% small cap value using fund VIOV, and then it's got 20% in long-term treasuries represented by TLT, 20% in short-term treasuries represented by SHY, and the golden part is 20% in gold represented by GLDM. Now this one was up 0.69% for the week. It is up 12% since inception in July and we will be removing $46 for the distribution for January coming out of the cash which is also accumulated this month with all the dividends being paid and for the lifetime of it since July. We have removed $261 at the annualized rate of 5%, and that has come $43 out of the gold fund, $130 out of the small cap value fund, and $88 out of cash over that time period. Moving to our next portfolio, it is the Golden Ratio portfolio. And this one is 42% in stocks divided into three funds, USMV, which is a low volatility fund, small cap value, VIoV, and large cap growth, VUG, those are Vanguard funds. And then it's got 26% in long-term treasuries represented by TLT. It's got 16% in gold represented by GLDM and 10% in REITs represented by the Fund R E E T. It's also got 6% in cash from which we remove the distributions. It was up overall this portfolio 0.79% for the week. It is up 11% since inception in July and we are removing distributions from it at a rate of 5%. So we'll be taking out $45 from cash for the month of January 2021. It's nice to be able to say 2021. And then we are looking at $260 removed from cash for the lifetime of the portfolio since July. Now, moving to our next portfolio, it is the Risk Parity Ultimate. And this one has 12 funds in it. It is composed of 40% in stocks, 25% in long-term treasuries, 10% in REITs, 10% in gold, 12.5% in a preferred shares stock fund, PFF, and then 2.5% in a volatility fund, VXX. Now this one had a very good week. It also has a significant component of these low volatility funds. It's got two of them in their SPLV and USMV. And those were up 0.87% and 0.91%. And then also it's got a leveraged stock fund, UPRO, that was up 1.55%. So it all translated into this portfolio being up 1.1% for the week. it is up 10.5% since inception in July. Now we are going at this one a little harder than the last ones. We're taking out the distributions at a 6% annualized rate and that translates into $54 from cash that we'll be removing for January 2021. Overall since inception we've taken distributions of $311 on a portfolio that started with 10,000. and that has come $52 from gold, $105 from small cap value, $51 from large cap value, and $103 out of the cash that has accumulated over time. And now we're getting into our two experimental portfolios that involve these leveraged funds. And so we have in our next portfolio is the Accelerated Permanent Portfolio. Now this one started out with 27.5% in a leveraged treasury bond fund, TMF, 25% in a leveraged stock fund, UPRO, and then it's got 25% in preferred shares, PFF, and 22. 5% in gold. Now this one has been moving away from its original configuration right now the UPRO comprises 32.59% of the fund if that is continuing through the middle of the month we will rebalance this portfolio in January. But for the week it is up 1.9% pretty big pop there it is up 13.2% since inception in July and we are taking out of this portfolio at a higher rate of 8% annualized. And so that translates into $73 for January 2021. And that will come from cash because the cash has accumulated in this portfolio as well. We have taken out $419 out of a $10,000 portfolio since inception in July. And that has come $71 from the LevEragEd Treasury Bond Fund, $210 from the LevEragEd Stock Fund, $65 from the Preferred Shares Fund, and now $73 in cash. And finally our other experimental portfolio, the Aggressive 5050. This one is set up with 33% in the LevEragEd Stock Fund, UPRO. It has 33% in the LevEragEd Bond Fund, TMF, and and then it has 17% in Preferred Shares Fund PFF and 17% in the Vanguard Intermediate Treasury Bond Fund VGIT. This one also popped last week on the strength of UPRO, which was up 1.55% itself. The fund was up 2% for the week and is up 13.5% since inception in July. I should say that UPRO was actually up 1.55% just on the last trading day on Thursday. It wasn't for the week, it was more than that for the week. So anyway, we are up 13. 5% since inception in July, and we are also taking distributions out of this portfolio at the rate of 8% annualized to put it through its paces. We're taking out $73 from cash that is accumulated for our distribution in January. And for the history of this fund since July, we have removed $417 out of a portfolio that started with $10,000. It has $70 TMF was one distribution. We've removed $139 from UPRO. $63 from the Preferred Shares Fund PFF and then $145 in cash. And this portfolio was rebalanced in November. It is not close to being rebalanced again, but it could get there later this year. We'll see how these funds shake out. Now just taking into account a couple other metrics here. This is the sixth month we've been taking distributions out of these portfolios. In total we have taken out $1,874 out of collective portfolios that started with $60,200 in them. Now all of those portfolios have continued to grow and so if you add up all six of them they started with $60,200 in them and now have $65,130 in them total. and so they are still growing even though we've taken out the $1,874. The distributions have been 3.1% for the six months so annualized. They are taking distributions out of these risk parity style portfolios at the combined rate of 6.2% annualized. The total for January was $326. which is also about 6.2% annualized. But now I see our signal is beginning to fade on this first day of the new year. We'll be picking up with our next show hopefully in the middle of the week, although we may be skipping this week for the midweek show, but that we'll be analyzing Another fund that was requested by one of our listeners, and we will be taking that through the 10 questions from J. David Stein, 10 questions for analyzing any investment. We will also be having our monthly rant on the next one. Sorry I wasn't able to do that today, but I have a good one in mind for those who like those sorts of things. And if you'd like to contact me, please do. I like getting your suggestions and like putting them together into new episodes to see what you're interested in. And so you can send those to frank@riskparityradio.com that's the email frank@riskparityradio.com or you can go to the website www.riskparityradio.com and fill out the contact form there. You'll also find on the Portfolios page all of the information that I was talking about today in terms of the distributions and everything else about those sample portfolios, including their latest printout of where they are as of December 31, 2020. Thank you for tuning in, and Happy New Year. This is Frank Vasquez with Risk Parity Radio, signing off.

Mostly Mary [14:34]

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.