Cold Open And Welcome

Voices [0:00]

A foolish consistency is the hard goblin of a little mind. A goblin by the little space and the philosopher of the mind. If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. A different drummer.

Mostly Queen 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 [0:36]

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. And the basic foundational episodes are episodes 1, 3, 5, 7, and 9. Yes, it is still in my memory banks. We have also created an additional resource, a collection of additional foundational episodes and other popular episodes.

Voices [1:07]

We have top men working on it right now.

Mostly Uncle Frank [1:14]

Top men. And you can find those on the episode guide page at www.riskpardyRadio.com. Inconceivable! All thanks to our friend Luke, our volunteer in Quebec. Sacosh. We'd be helpless without him.

Voices [1:35]

I have always depended on the kindness of strangers.

Mostly Uncle Frank [1:41]

Because other than him, it's just me and Marion here. I'll give you the moon, Mary.

Voices [1:46]

I'll take it.

Mostly Uncle Frank [1:48]

We have no sponsors, we have no guests, and we have no expansion plans.

Voices [1:52]

I don't think I'd like another job.

Mostly Uncle Frank [1:55]

Over the years, our podcast has become very audienced focused, and I must say we do have the finest podcast audience available.

Voices [2:03]

Top drawer. Really top drawer.

Mostly Uncle Frank [2:07]

Along with a host named after a hot dog.

Voices [2:10]

Light in the French.

Mostly Uncle Frank [2:14]

But now onward, episode 496. Today on Risky Party Radio. Yeah, that was the kind of the sound of the stock market last week. Par for the course this month, huh? But that means we'll be doing our weekly portfolio reviews of the eight sample portfolios you can find at www.riskparty.com on the portfolios page.

Voices [2:46]

But before we get to that I'm intrigued by this. I will say email.

Listener Email On Fund Choices

Mostly Uncle Frank [2:53]

And first off. First off, we have an email from Dustin.

Voices [3:00]

Just one word. Yes, sir. Are you listening? Yes, sir, you plastics.

Mostly Uncle Frank [3:09]

And Dustin, right?

Mostly Queen Mary [3:11]

Hi, Uncle Frank and Queen Mary. First time writing in. I was scared at first. It was awkward at the beginning.

Voices [3:19]

I cried.

Mostly Queen Mary [3:21]

I didn't have any questions, really, but I wanted to help you all reach your Fairfax Costa goal with what little we can, so I came up with a few. I'm probably not the typical crowd in this dive bar, as I definitely don't have a portfolio worth millions.

Voices [3:37]

I got a hundred dollar check from my grandma, and my dad said I need to put it in the bank so it can grow over the years. Well, that's fantastic. A really smart decision, young man. We can put that check in a money market mutual fund, then we'll reinvest the earnings into foreign currency accounts with compounding interest, and it's gone.

Mostly Queen Mary [3:55]

We are mid-40s, still in the accumulation phase, around 25% to our FI number, so not yet using a risk parity style allocation. Even though we won't be drawing down for quite some time, I love the podcast and never miss an episode since discovering it.

Voices [4:12]

A very sick man.

Mostly Queen Mary [4:14]

First off, I wanted to get your opinion on Fidelity Zero funds and if you think they are a good fit in a golden ratio style portfolio for the equities portion. They don't show up in Paul Merriman's best list, but perhaps that's because they have not been around long enough. Second off, I was also curious about your thoughts for using GLTR as a substitute for GLDM or IAUM, and it's gone. Boof. Is the higher expense ratio the main detractor for using a more diversified type of commodities fund that holds more than just gold but shares the uncorrelated principle for why we want gold? Last off, I love the clips.

Voices [5:07]

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

Mostly Queen Mary [5:13]

But I always wonder when I hear Mr. Walken, why are small cap value funds referred to as cowbell? Is there an episode I missed where this name originates that you can point me to?

Voices [5:24]

Babies, before we're done here, y'all be wearing gold-plated diapers. What does that mean? Never question Bruce Dickinson.

Mostly Queen Mary [5:36]

Thanks so much for all you do. Bows to my sensei, Dustin.

Voices [5:41]

Bowdy sensei. Bowdy or sensei.

Mostly Queen Mary [5:45]

Oh, the fidelity funds are not in Merriman's best list because they are not ETFs. Ha ha ha. Still interested in your thoughts on those funds. Thanks, Dustin.

Voices [5:55]

Would you like me to seduce you?

Mostly Uncle Frank [5:57]

What?

Voices [5:58]

Is that what you're trying to tell me?

Mostly Uncle Frank [6:01]

Well, first off, thank you for being a donor to Fairfax Casa. As most of you know who have not been living under a rock here, we are currently doing a promotion for Mary's charity, which is Fairfax Casa, the Fairfax County Court-appointed special advocates, of which Mary is one.

Voices [6:20]

The women of this country learned long ago.

Portfolio Principles Over Expense Ratios

Mostly Uncle Frank [6:27]

And the Cassas work with children who are going through the foster system and have been removed from their homes. We thought this would be a good time of year to do this because April is Child Abuse Prevention Month. And so we're doing this campaign in March and April. We have a very generous listener, Matthew 63, who wishes to remain anonymous, who has put up $20,000 in matching funds. And we are working on matching that. And I've made a lot of progress, but are not quite all the way there yet. So if you'd like to donate to Fairfax Casa, you can do that through the link I will put in the show notes, or on our support page at www.riskparty.com. And if you donate to Fairfax Casa, you get to go to the front of our email line. Just make sure you put that in your email so I can duly move you to the front of the line. You will also get to go to the front of the email line if you donate to my charity, the Father McKenna Center. But we're not promoting that very hard at the moment. In favor of Mary. But now getting to your questions, first I think you should step back because you're doing what I see a lot of amateur investors do, which is fixate on particular funds and fixate on expense ratios as if that's all that's important in the world. And that's really not the way you want to approach investing or portfolio construction.

Voices [8:00]

But that's not how it works.

Mostly Uncle Frank [8:02]

Because there are many funds that can fulfill particular roles and many funds that are essentially doing the same things. But the mistake lies in trying to build a portfolio around just some particular fund because you like it or it has a low expense ratio. And that's kind of backwards from the way you should be approaching this.

Voices [8:23]

You need somebody watching your back at all times.

Mostly Uncle Frank [8:26]

What you want to do is first focus on your goals for the portfolio. And then we're looking at three principles. Our principles are the holy grail principle, the macro allocation principle, and the simplicity principle. And I would go back to episode seven if you really want to get a background in that. But since you are in accumulation, the most important principle for you actually is the macro allocation principle, which says that it is the percentage of the big allocations such as stocks, bonds, and alternatives, that makes the most difference here in terms of long-term accumulation. And so applying that, you want your portfolio to be 80 to 100% in stocks. You are less concerned with the holy grail principle in accumulation because you don't care as much about the volatility. The holy grail principle is all about diversification. And it's the number one principle when you get to deaccumulation or talking about a retirement portfolio or trying to have a high safe withdrawal rate. Now, what people typically fixate on, particularly when they start, and unfortunately continue to fixate on often, is the simplicity principle. And some people take that to an extreme, saying, Well, I want the simplest portfolio possible. I want one fund or two funds or three funds max. That's not really a high value, honestly. The reason you would want to start with that is to make things less confusing for a beginning investor, for somebody who's never invested before, doesn't know what they're doing. Yes, you can accumulate with one, two, three, or four funds very easily and very nicely, and that's all you really need, in particular, for your accumulation phase. But that principle should never override the other two principles, the macroallocation principle and the holy grail principle when you need them. You need to follow Einstein when it comes to the simplicity principle and make things as simple as possible, but no simpler.

Voices [10:27]

Everything should be made as simple as possible, but not simpler.

Mostly Uncle Frank [10:32]

Now that is also where expense ratios come in when you're applying the simplicity principle, because obviously, if there are two funds and they do pretty much exactly the same thing, you might as well pick the cheaper one. But if they're not the same and they're not doing exactly the same thing, you should not be using the simplicity principle or expense ratios to govern your choices in funds. Because close enough is not good enough here.

Voices [10:57]

Forget about it.

Mostly Uncle Frank [10:59]

You want to be picking your asset classes first and then looking around at funds that fulfill those asset classes, not looking at funds and trying to shoehorn them into some kind of a plan where they don't actually fit. All right, now let's take a look at these funds. These are the four funds that Fidelity has put out, mutual funds that offer zero fees. Now, as you pointed out or recognized, these are mutual funds, not ETFs. And in general, we prefer ETFs for several reasons. First of all, they're more generally efficient and more tax efficient in particular. They typically have a lower expense ratio than their corresponding mutual funds. So VTI is a slightly lower expense ratio than VTSAX on the Vanguard side. These are the exception to that rule. They are advertised as having 0% expense ratios to suck you in, if you will. They're less tax efficient, though. And also the reason that Fidelity wants you to hold their mutual funds is that you're kind of captive at Fidelity. Because if you have ETFs, it's very easy to move from one brokerage to another if you're dissatisfied with the service there. But once you're locked into a mutual fund, it's much harder to move it because there might be fees or other issues where you move it in terms of selling it. Now, in order to understand why these funds exist, it's because they're a loss leader for Fidelity. They're designed to get people in the door, in particular to get Vanguard subscribers in the door, because these funds tend to correspond to funds that Vanguard holds. So FZROX is kind of like VTSAX. FNILX is kind of like an SP 500 fund, like VFIAX or VOO. FZIPX, this smaller mid-cap fund, is like Vanguard's extended market fund. And FZILX is kind of like Vanguard's basic international fund, which is VXUS in the ETF version. Now Vanguard's funds are extremely low fee too. So Fidelity to market undercuts them with the 0% fee figuring. We'll get you in the door and then we'll sell you other things. That's what Fidelity's business model is, which is why you need to be able to say no if you go to Fidelity, because they'll try to sell you things, either services or all kinds of other things. They have everything anybody could want at Fidelity. So the way you want to use them is to use their free services and everything they've got there, but just say no when it comes to being sold something else. And they'll generally leave you alone if you make it clear you don't want to be bothered, because they have plenty other people to market to there.

Voices [13:43]

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

Mostly Uncle Frank [13:49]

So whenever you're trying to figure out what a fund actually is, what's in it, the easiest thing to do usually is go to Morningstar and put your fund in there, and then you can look at a variety of metrics, including what's actually in the portfolio in terms of the kinds of companies that are in there and their percentages. But also you can just look at what are called the style boxes, which is this tic-tac-toe-looking thing that measures growth versus value on the horizontal axis and large versus small on the vertical axis. And so FZROX and FNILX are essentially large cap blend funds, and sometimes they lean towards growth, although they're not really these days because the market's been going down and value tends to outperform growth in that circumstance. FZIPX is actually a small cap blend fund, is how you would characterize that. And FZILX is an international blended fund. So the first question here is not what their expense ratios are, but do you actually want these funds in your portfolio, these asset classes? Do you want a large cap blend fund? Do you want a small cap blend fund? Because if you don't want that in your portfolio, that's not in your asset class mix that you've already chosen. You choose the asset classes first, not the funds. If you've chosen those asset classes, then you could use these funds to fulfill those holes. If you haven't chosen those, you wouldn't choose these funds. So I would never choose FZIPX, the small cap blend fund, because I don't want a small cap blend fund. I don't want small cap growth in my portfolio in particular. So if I want a small cap fund, I want a small cap value fund. And this doesn't do that.

Voices [15:37]

It doesn't work for me. I gotta have more cowbell. I gotta have more cowbell.

Why GLTR Is Not Gold

Mostly Uncle Frank [15:43]

If you listen to the last episode, I've talked more about that. You could use one of these large cap funds if you were thinking of holding a large cap blend fund as your kind of large cap blend growth fund. I would prefer just to hold a straight large cap growth fund, like a VUG or an SCHG, and pair that with a small cap value fund. However, if you were just holding one stock fund in your portfolio, both FZROX and F N I L X could fulfill that role. So you could do that. However, bear in mind at some point in the future, you may wish to diversify this fund, in which case you're gonna have to sell it. And if it's in a taxable account, you're gonna have to pay taxes on it. So at least with respect to your taxable accounts, you probably want to line those up so you don't have to necessarily sell things when you get there. And I realize that's a couple decades hence, but there it is. So what I would prefer to hold is a large cap growth fund paired with a small cap value fund, something like VUG or SCHG or IWY paired with AVUV on the domestic side. And then I don't like these large cap international blend funds. They tend to hold too many Morbund banks and things like that. What I would prefer on the international side is to also hold a large cap growth or momentum fund like IDMO paired with a small cap value fund like AVDV, because those tend to perform better. And you'll also find some more of these on the list at Merriman's best in class list if you're looking for particular asset classes. But you'll note that the way he's got things organized is by these sub-asset classes, because you're supposed to pick that first and then pick a fund in the class, not pick a fund and then try to build something around it or MacGyver it into something. Look, it's MacGyver! Do you know how to pick locks? And all of these funds I've been talking about have low enough expense ratios that that should not really be the deciding factor. Because whether it's 0% or 0.05 or even 0.1 or 0.2, that's probably not going to matter that much. That the actual performance of the portfolio and your ability to rebalance it are going to be far more important than those fractions of an expense ratio. The reason why people think that's really important is because you used to be having expense ratios on basic funds that were 1% or more. And in that case, it made a huge difference. This is what Jack Bogle was talking about in common sense investing. When you start talking about a bunch of funds with really low expense ratios to begin with, that's not really a deciding factor and should not be a deciding factor over what asset classes you actually want in the portfolio. All right. Then you also had a question about GLTR. And whether you could use that as a substitute or for GLDM. And the answer is no.

Voices [18:53]

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

Mostly Uncle Frank [18:56]

Because that fund is a composite fund that holds gold, silver, palladium, and platinum. So it's a different investment.

Voices [19:03]

Forget about it.

Mostly Uncle Frank [19:05]

And gold is a different investment from the other precious metals. The reason gold is different from everything else in this class that you might think it's related to is because it is held by central banks as essentially a backup currency. And so central banks are buying and selling gold. They are not buying and selling these other precious metals. And that creates a very unique demand function and a very unique position for gold in the world, that it functions more like an alternative currency than it functions like a metal, particularly a more base metal like palladium. And again, this is an example of not fixating on funds, but picking your asset classes first and then picking the funds. So never think that you can substitute something that looks kind of like something else.

Voices [19:55]

That's not how any of this works.

Mostly Uncle Frank [19:57]

There's no reason to do that in the age we live in. You can find an ETF that is specifically exactly what you want, and that's what you should be picking, not something that's close to what you want.

Voices [20:07]

Wrong? Wrong! Right? Wrong!

Mostly Uncle Frank [20:10]

And your last question about the cowbell.

Voices [20:13]

Guess what?

Mostly Uncle Frank [20:15]

Well, the way this podcast happened is that it's just kind of evolved over the years.

Voices [20:20]

This is pretty much the worst video ever made.

Mostly Uncle Frank [20:23]

If you actually want to hear a history of it from a listener, go back and listen to episode 445, where our friend John in Charlottesville talks about his romp through the old episodes.

Voices [20:35]

Inconceivable!

Mostly Uncle Frank [20:37]

But I think the first time we used the cowbell clip with respect to small cap value in particular was in episode 168. There are a couple of references to those clips before that. But no, there wasn't any rhyme or reason to it. It's just kind of the organic way things grow around here. So, we're glad you're enjoying the podcast. Thank you so much for being a donor to Fairfax Casa. And thank you for your email.

Voices [21:11]

Guess what? I got a fever. And the only prescription is more cowbell. Second off.

Asset Location And Cash Swaps

Mostly Uncle Frank [21:22]

Second off, we have an email from Bill, aka Optimus Prime. We just like to shorten that. I am Optimus Prime. And Optimus Bill writes.

Mostly Queen Mary [21:36]

Frank, I'll keep it short. My 3% cash allocation is in my brokerage held in BOXX and is in the LTCG 15% tax bracket. Would it be prudent to asset swap this cash for equities, A V U V in this case, and place the cash allocation in a pre tax solo 401k in an MMF or cash equivalent? Like SGOV. It would obviously then be taxed as ordinary income at that point. How much cash would you leave in our checking account? One to two months expenses? It is fixed income that could be best suited to be located in pre-tax and below growth to ameliorate RMDs. I would then have all LCG Blend and SCV in the brokerage. Interested in your thoughts, I can handle the truth. Bill, aka Optimus Prime. You can't handle the Crystal Bull.

Mostly Uncle Frank [22:32]

Well, thank you also for being a donor to Fairfax Casa and the Father McKenna Center. And being one of my best friends in the world these days. The best, Jerry. The best. Okay, so Bill is using the ETF Box BOXX, which is very similar to a short-term bond fund, but it's built on options, so it's actually more tax efficient for those of you in the highest tax brackets, and that's its attraction. Otherwise, it's just kind of like SGUV or one of those. B I L is another one.

Voices [23:04]

Say, Mr. Bill, where are you going? I'm on the went to a big Hollywood party at Ken and Bobby's.

Mostly Uncle Frank [23:10]

So I agree, if you have a lot of cash or cash equivalents like this, and you don't really need that cash right away, it is better to store it in a traditional retirement account, because then you're not having to pay taxes on it whenever it pays something. And yes, you can swap it out later. So I would probably do that, put it away in one of these other accounts so it's not throwing off taxable income. And for those of you who don't know what an asset swap is, we will link to that again in the show notes. This is a nice instructional video from our friend Justin at Risk Parity Chronicles that shows you how you can easily keep your assets in the right tax locations to minimize taxes, but still have access to them when necessary. So, how much cash do you leave in the checking account?

Voices [24:01]

100 billion dollars.

Mostly Uncle Frank [24:05]

And is it one to two months expenses? Yeah, I would say it typically is for us that every month we sit down and project out what our expenses are going to be for the month and usually look ahead another month to see whether there's something lumpy there, like a tax payment or insurance payment or some other annual payment, and then bring that over from some other account and sell some asset if necessary in that process. And if you charge most of your expenses on credit cards, this actually becomes relatively easy to do month to month because what you find is that you always have enough in your checking account to cover the last credit card bills, and you get kind of a free look back as to what that was so you can keep track of your ongoing expenses. Since you're not actually taking the money out of your checking account to pay the bill, you put it on a credit card and then you basically have a few weeks or up to a month before that actually becomes a bill that needs to be paid out of your checking account. So that provides you with a little extra liquidity. We also have a margin account at our main taxable brokerage account at Interactive Brokers. And that's also useful for liquidity because you can bring money over without actually having to sell something right away and then figure out what you're gonna sell next week or even next month. You will have to pay a little bit of interest on the margin, but it's a pretty low rate. It's around 5% right now. But the general idea is you don't want to have months or years worth of cash sitting around in checking accounts or other places not growing and throwing off ordinary income that you have to pay taxes on. You'll also find that if you've turned off your dividend reinvestments in your taxable account like you should, that cash is going to be building up that way as well, and that's the easiest source of new cash, and you don't have to have to sell anything to access that. So you will have to do a little trial and error here, but fortunately it takes only a few months to kind of get in a groove as to figure out what you need and when you need it. The trick really is just being reasonably on top of what you would normally expect to spend in the next one to three months. So we are hoping you can handle that truth.

Voices [26:22]

You can't handle the dogs and cats living together!

Mostly Uncle Frank [26:25]

With your Transformer minions over there. My first lieutenant. Designation jazz.

Voices [26:32]

This looks like a cool place to kick it. What is that? How do you learn to talk like that? We've learned Earth's languages through the World Wide Web. My weapons specialist Iron Eyed. You feeling lucky, punk? Easy, Ironhide. Just kidding. I just wanted to show him my cannons. Our medical officer, Ratchet. The boy's pheromone levels suggest he wants to mate with a female.

Mostly Uncle Frank [27:03]

And hopefully that helps. Thank you again for being a donor to both of our charities. And thank you for your email.

Voices [27:12]

Gentlemen, I want to introduce you to my friend, Optimus Prime. Prime, make something of yourself. Last off.

Mostly Uncle Frank [27:24]

Last off, we have an email from Scott.

Voices [27:30]

Great Scott!

Mostly Uncle Frank [27:33]

And Scott writes.

Mostly Queen Mary [27:35]

Hello, Frank. I'm wondering when I'd want to change my portfolio to the golden ratio or golden butterfly relative to my retirement year. So, if I want to retire in five years, is now the time to make the switch? I'm currently basically 100% in index funds.

Voices [27:53]

Hi, sir. Before they went into warp, I transported the whole kitten caboodle into the air engine room where there'll be no triple at all.

Mostly Uncle Frank [28:00]

Well, yes, Scott, if you are looking for kind of a general guideline as to when to transition a portfolio, being 80% to your FI number, or whatever you think you need out of your portfolio for retirement, and five years or less out is a good time to make your transition. And you can do that all at once or incrementally. Sometimes it makes more sense to do it incrementally for tax reasons. In reality, these things tend not to line up that neatly, because usually people make it to their FI number or have more than they need in their Phi number. The truth is basically as soon as the part of your portfolio you plan to live on gets close to that financial independence number, you might as well transition at least that part of the portfolio so it's all set up and ready to go. And then if you have extra money, you can either just spend it, keep it in cash, or maybe you want to put it away for the long term, in which case you could just invest it in regular index funds. There's a lot of flexibility here. But the idea, the general idea is that once you've won the accumulation game, you want to stop playing with all of your chips because what you don't want to have happen is you go all the way up to your retirement date or close, then we have a 40 or 50% market crash, and then you're kind of stuck and you probably can't retire at that point. If you had already transitioned your portfolio, you're not going to have a 40 or 50% market crash. It'll be more like a 20% market crash, and it'll recover a lot faster. But it really is that phi number or the number you need to support your spending. That's the important thing, not the timing. Too many people say, Well, I want to retire in five years or 10 years, and you ask them, Well, how much money do you have and what are your expenses? And have you done those calculations? And they say, No, what do I need to invest in? And that doesn't make any sense. You have to go back and look at your current expenses and then project that forward to figure out what your retirement expenses are likely to be, and use that as a basis for deciding when you're going to retire and when you want to transition the portfolio. Because it's really the dollars that matter, and that's how you do your planning, not around a particular date.

Voices [30:20]

That is the straight stuff, oh funk master.

Mostly Uncle Frank [30:24]

We started doing our transitioning around 2016, and had transitioned most of everything by 2017 or 2018, and I retired in 2020. But I had been doing some experimenting with various things going all the way back to 2012 or 2013 at the time. And if you want to hear more about that, go listen to the Afford Anything podcast number 618, where Paula Pant interviewed me about this little history and how we got here.

Voices [30:53]

I looked at her, looked straight into those big blue eyes. I remember you who killed Johnson. Then you try to get me. Trying to get me to turn my back. Unless you're turned sweet hot. Now you're taking the phone. Yeah, well, something like that.

Mostly Uncle Frank [31:18]

So hopefully that helps. And thank you for your email.

Voices [31:30]

Another something completely different.

Mostly Uncle Frank [31:49]

Yes, March really has been a month for the bees. At least for the large general stock indexes, which are by far the worst performers of all the assets that we look at here.

Voices [32:03]

Uh, what? It's gone. It's all gone. What's all gone? The money in your account. It didn't do too well, it's gone.

Mostly Uncle Frank [32:11]

But what that means is while traditional portfolios are generally down by about 5%, most of our portfolios are about flat. Unfortunately, they've lost all their gains they got in January and February. But if you would have said at the beginning of the year that we're gonna have a war and oil is gonna be over $100 a barrel, I would have thought we'd have even a lot worse performance for a lot of these portfolios and the stock market in general.

Voices [32:38]

I'm Daniel Plainview. This is my partner in Son HW. I'm an oil man, but I also love milkshakes. And now I'm going to drink your milkshake. What do you think of that?

Mostly Uncle Frank [32:54]

We're just looking at these markets first. The SP 500, represented by VOO, is now down 6.74% for the year so far. The NASDAQ, represented by the fund QQQ, it's the NASDAQ 100, is down 8.31% for the year so far. So it's the big laggard and worst performer.

Voices [33:14]

Well, let me explain it to you. You have a milkshake, and I have a straw. Well, that's a really big straw. And my straw goes across the room, and I drink your milkshake. I drink it up!

Mostly Uncle Frank [33:36]

Small cap value is holding up pretty well, actually, considering. Our representative fund VIOV is actually up 2.64% for the year so far.

Voices [33:46]

I'm telling you, fellas, you're gonna want that cowbell.

Mostly Uncle Frank [33:50]

So if you have large cap growth and small cap value, they are showing about a 10% difference. That's a little bit of diversification and action. Gold continues to be up.

Voices [34:01]

I love gold.

Mostly Uncle Frank [34:04]

Representative fund GLDM is up 4.65% for the year so far. It went way up and came back down, but it was interesting. It did go back up on Friday when the stock market was going down. I keep reading articles about various sovereigns selling their gold to deal with the current crisis. Evidently, Turkey sold 58 tons of it in the past couple of months. Next one is long-term treasury bonds. Representative fund VGLT is down 1.27% for the year so far. REITs, represented by the fund REET, are now also down. They are down 0.52% for the year so far. Commodities, of course, are the big winners led by the oil.

Voices [34:46]

I'm an oil man. I travel from state to state searching for oil-rich fields which I can drill on. But when I'm not doing that, I'm on a countrywide quest for my second love. The perfect milkshake.

Sample Portfolio Results And Leverage

Mostly Uncle Frank [35:01]

Representative Fund PDBC is up 31.32% for the year so far. Preferred shares represented by the fund at PFFV are down 0.50% for the year so far. And managed futures are managing to be up. Representative fund DBMF is up 7.73% for the year so far. It's interesting watching that one as it picks up these various trends. Moving to the sample portfolios. First one is this reference portfolio we call the all seasons. It's only 30% in stocks and a total stock market fund, 55% in intermediate and long-term treasury bonds, and the remaining 15% in gold and commodities. It is down 4.65% for the month of March. It's up 0.06% year to date and up 23.35% since inception in July 2020. Moving to these kind of bread and butter portfolios, first one's golden butterfly. This one is 40% in stocks and a total stock market fund and a small cap value fund. 40% in treasury bonds divided into long and short, and the remaining 20% in gold, GLDM. It's down 6.97% for the month of March. It's up 0.14% year to date, and up 59.77% since inception in July 2020. Next one's the Golden Ratio. What's the answer? What's the answer, Mr.

Voices [36:24]

Sacred Geometry? Sacred Geometry. The Golden Ratio.

Mostly Uncle Frank [36:30]

The Golden Ratio. This one is 42% in stocks divided into a large cap growth fund and a small cap value fund. 26% in long-term treasury bonds, 16% in gold, 10% in managed futures, and 6% in cash in a money market. It's down 7.33% for the month of March. It's down 0.91% year to date, and up 53% since inception in July 2020. Next one's the Risk Parity Ultimate, our kitchen sink portfolio. I'm not going to go through all 12 of these funds, but it's down 8.12% for the month of March. It's down 1.69% year to date, and up 37.38% since inception in July 2020. Now moving to these experimental portfolios. These all involve levered funds and lots of volatility. So don't try this at home. Even though I know some of you do.

Voices [37:28]

Well, you have a gambling problem.

Mostly Uncle Frank [37:31]

First one's this accelerated permanent portfolio. This one is 27.5% in a levered bond fund TMF, 25% in UPRO, that's a leverage stock fund, 25% in PFF VA Preferred Shares Fund, and 22.5% in gold. It's down 13.52% for the month of March. It's down 5.78% year to date and up 16.3% since inception in July 2020. It is suffering from all that leverage in the SP 500 and bonds.

Voices [38:02]

I've officially amounted to check you squat.

Mostly Uncle Frank [38:08]

But now let's look at something even worse. The aggressive 50-50. This is the most levered and least diversified of these portfolios. It's one-third in Levered Stock Fund UPRO, one-third in Levered Bond Fund TMF, and the remaining third in ballast in a preferred shares fund and an intermediate treasury bond fund.

Voices [38:27]

Look away, I'm idiot.

Mostly Uncle Frank [38:30]

It's down 13.24% for the month of March. It's down nine point five percent year to date, and down eleven point zero five percent since inception in July 2020. That's what lots of leverage and not much diversification will do for you.

Voices [38:45]

Gosh! Idiot!

Mostly Uncle Frank [38:47]

But I always say the most interesting experiments are the ones that don't work out so well.

Voices [38:55]

I picked the wrong weight, quick sniff and blue.

Mostly Uncle Frank [39:05]

Moving to our next one, the levered golden ratio. This one's a year younger than the first six. It is 35% in NTSX, that is a composite levered fund of the S P 500 and Treasury bonds, 15% in AVDV, it's an international small cap value fund, 20% in GLDM, that's gold, 10% in KMLM, that's managed futures, 10% in TMF, a levered bond fund, and the remaining 10% divided into UDOW and UTSL, that's a levered Dow fund and a levered utilities fund. It's down 11% for the month of March. It's down 1.01% year to date, and up 18.66% since inception in July 2021. Now moving to our last one and newest one, the OPTRA portfolio. One portfolio to rule them all. It's not ruling them all this year at the moment. After March. This one is 16% in UPRO, that's a levered SP 500 fund that's really been hit hard in the past month. 24% in AVGV, which is a worldwide value fund that's actually held up pretty well. I think it's up about 4% right now. 24% in GOVZ, that's a Treasury STRIPS fund, and the remaining 36% divided into golden managed futures. It's down 10.9% for the month of March. It's down 1.09% year to date, and up 27.62% since inception in July 2024. It's still not even two years old yet.

Voices [40:40]

Oh aye, baby! The other other weight meat! Baby, it's what's for dinner!

Mostly Uncle Frank [40:48]

So there they all are, big and ugly. At least for the month of March since the war began. But not so bad for the year altogether so far. And not so bad, relatively speaking, either.

Voices [41:01]

What a filthy job. Could be worse. How? Could be raining.

Mostly Uncle Frank [41:19]

But with that, now I see our signal is beginning to fade. We will be concluding our presentation with a nice little tune that our eldest son Frank sent us this past week. And in the meantime, if you have comments or questions for me, please send them to Frank at RiskPartyRadio.com. That email is frank at riskparty radio.com. Or you can go to the website www.riskpartyradio.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, a review. That would be great. Okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Party Radio signing off.

Voices [42:10]

Looking at me, you can see that I would call myself an oil man. I'm here to explain to you five people the nature of my drilling plan.

Mostly Queen Mary [43:42]

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.

Voices [44:00]

Uh