Welcome And What We Cover

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 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 [0:37]

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. 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.riskpartyrader.com. Inconceivable. And all thanks to our friend Luke, our volunteer in Quebec. Zacosh. We'd be helpless without him.

Voices [1:36]

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, alright?

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 [1:53]

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 [2:05]

Really top drawer.

Mostly Uncle Frank [2:07]

Along with a host named after a hot dog.

Voices [2:10]

Lighten up, Francis.

Mostly Uncle Frank [2:13]

But now onward, episode 514. Today on Risk Party Radio, it's time for our weekly portfolio reviews of the eight sample portfolios you can find at www.riskparty radio.com on the portfolios page. And we're also going to talk about our monthly distributions for June.

Voices [2:32]

Put that coffee down.

Mostly Uncle Frank [2:35]

Won't that be exciting?

Voices [2:37]

Coffee's for closers only.

Mostly Uncle Frank [2:39]

But before we get to that, we do have an email to talk about. And this is one of these days we're gonna devote the entire time to just one email.

Voices [2:48]

There can be only one.

Mostly Uncle Frank [2:52]

There are three topics in the email. Well, there are two topics in the email, and one I added.

Voices [2:57]

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

Mostly Uncle Frank [3:02]

But you'll see soon enough what this is all about.

Voices [3:05]

That is the straight stuff, oh funk master.

Mostly Uncle Frank [3:09]

And so without further ado.

Voices [3:11]

Here I go once again with the email. And first off, second off, last off.

Rebecca’s Early Retirement Portfolio Dilemma

Mostly Uncle Frank [3:20]

First, second, and last off, we have an email from Rebecca.

Voices [3:25]

What is the mystery of Rebecca? What dread secret is hidden within the silent walls of Manderley?

Mostly Uncle Frank [3:31]

And Rebecca Wright.

Mostly Queen Mary [3:33]

Dear Frank, thank you and Mary for all that you do and helping us explore what it means to thoughtfully invest. We made a donation to both the Father McKenna Center and Fairfax Casa. In the spirit of your focus on small, high-impact organizations, we also made a donation to Wells for Wellness, a charity we've come to respect that is run by a local Utah family that helps build Wells in Niger.

Voices [3:56]

The best, Jerry, the best.

Mostly Queen Mary [3:59]

This question is in many ways a call for help after exhausting more conventional options. Last year, we set out to find a financial advisor who could help us think through transitioning from a traditional Boglehead style portfolio toward something more risk parity-oriented.

Voices [4:16]

Yes.

Mostly Queen Mary [4:17]

We specifically looked for advisors willing to work on an hourly or one-time planning basis. We reached out to 14 advisors. A third never responded.

Voices [4:28]

Watch out for that first step, it's and does it.

Mostly Queen Mary [4:32]

The next third told us our situation was too complex unless we were willing to work under a traditional assets under management arrangement.

Voices [4:41]

I drink your drink it up every day. I drink it up.

Mostly Queen Mary [4:54]

And the remaining third said we weren't a good fit for their practice. Reed, they were hell bent on the three fund portfolio. That's not an improvement. So, after striking out with the Financial Advisory Industrial Complex, we're coming to you.

Voices [5:10]

You're the gray rider.

Mostly Queen Mary [5:12]

My husband and I are early retirees in our mid-30s. We both stopped working about six years ago, have not earned an active income in that time, and don't anticipate needing traditional income again for a very long time. Possibly ever, though we're open to whatever life brings. Before a life event flipped our finances upside down, which I'll explain in a little bit, our portfolio looked roughly like this. In our taxable brokerage, we had approximately 85% VTI and 15% BD. This crazy market had us on an insane equity glide path and kept pushing our BD allocation lower and lower, despite efforts to rebalance organically. In our retirement accounts, we essentially have 100% equity since we expected not to touch those assets for decades. This is a split between the total U.S. stock and international a la the Bogleheads model. I know from your show they are not as inversely related as we originally thought. Overall, about 60% of our total investments sit in our regular brokerage account. It will be decades before we need to touch our retirement accounts. All of our stockholdings have appreciated significantly. He offered to sell it to us off-market, which meant we needed cash and we needed it fast before the baby came.

Voices [7:02]

Show me the money! Show me the money!

Mostly Queen Mary [7:07]

We used a margin loan to bridge the purchase and sold all of our taxable bonds at a loss to offset gains from the stock sales used for the purchase. The result? We are now accidental 100% equity investors. For better or worse, this is the decision we made. But as early retirees with a very long timeline, this feels less than ideal. My question is, how would you approach transitioning from here into a more diversified risk parity style portfolio without creating unnecessarily large capital gains taxes? Unlike people who still earn income, we can't simply direct new earned income into safer assets. And so any reallocation has to come from existing appreciated assets. Complicating matters further, we're mindful of ACA subsidy cliffs. I know that may earn me some side-eye, but healthcare is one of our largest expenses, and I'm trying to think rationally about whether accelerating taxable gains to diversify is worth potentially increasing healthcare costs or whether there's a more efficient path. In addition, if you were thinking about someone in our situation, mid-30s, early retired, no expectation of meaningful earned income for the foreseeable future, and a very long investment horizon, what sort of broad target allocation would you be aiming for? And what would those allocations look like across our regular brokerage account, which we draw down upon currently, versus our retirement accounts? I know personal finance is personal, but even a rough framework would be incredibly helpful. And once we know the target allocation, how quickly would you aim to get there? Should this be something we aggressively prioritize over the next year or two, even if it means realizing more gains and accepting some tax inefficiency? Or is this the kind of transition that can responsibly unfold over many years? It feels hard to transition when the equity glide path is out of control. Side note, we've historically reviewed our finances and rebalanced monthly, since that's also the cadence at which we evaluate spending needs. If dividends and interest from taxable accounts don't fully cover our expenses, we would typically sell assets that month to make up the difference. And, if you'll indulge one second question, I've listened to your thoughts on gold and have read quite a bit about its role in diversified portfolios. Intellectually, I understand the case, but I'm realizing I still have an emotional hesitation around it. I think part of that is that in my personal circles, the people most vocal about gold also tend to be heavily into crypto and other speculative assets. That makes my passive investment instincts want to run in the opposite direction. Some part of me still associates gold with a kind of doomsday tech broadjacent investing mindset, even though I know that's not the framework you're advocating.

Voices [10:11]

Do you expect me to talk? No, Mr. Bund, I expect you to die.

Mostly Queen Mary [10:17]

Can you help me think through whether that hesitation is grounded in skepticism or just an outdated mental association I need to get over? Sincerely, Rebecca and Joe, accidental 100% equity investors seeking portfolio enlightenment.

Voices [10:34]

There is mystery, love, and laughter in Rebecca.

Mostly Uncle Frank [10:38]

Well, first off, Rebecca, thank you for being a donor to the Father McKenna Center and Fairfax Casa. As most of you know, we do not have any sponsors here. We do support a couple of charities: the Father McKenna Center for yours truly, and Fairfax Casa for Mary.

Voices [10:55]

I'm voting for yours truly.

Mostly Uncle Frank [10:57]

The Father McKenna Center supports hungry and homeless people in Washington, D.C. Full disclosure, I'm the current treasurer. And Fairfax Casa supports children in the foster system in Fairfax County. I'm voting for yours truly too. If you give to either charity, you get to go to the front of the email line. And so Rebecca has gone to the front of the email line twice already. Which means she's at the front of the line.

Voices [11:26]

You keep using the horse. I don't think it means what you think it means.

Mostly Uncle Frank [11:32]

And you can do that at the links I'll put in the show notes, or you can go straight to the support page at www.riskperiator.com, and you can also give through Patreon, which you can find at the support page there if you prefer that method. But make sure you mention your donation in your email so we can duly move you to the front of the line. Now, second off, congratulations on your new baby. I've actually seen pictures of this baby. With her big brother. They look quite cute together.

Voices [12:05]

Stop crying.

Mostly Uncle Frank [12:07]

But I'm sure you're exhausted and I'm surprised you had time to write an email at all, given you also just bought a house and everything.

Voices [12:15]

What if children ever done for me?

Mostly Uncle Frank [12:17]

Now, Rebecca and I are relatively new friends, which we're kind of kindred spirits.

Voices [12:28]

I can't help it. I just can't help it.

Mostly Uncle Frank [12:36]

Rebecca has a website called Yield and Spread, but what she's really known for is philanthropy, or encouraging people who are financially independent or on their way to financial independence to give to charities.

Voices [13:39]

It's not that I'm lazy, it's that I just don't care.

Philanthropy-Friendly Portfolios And Safe Withdrawal Rates

Mostly Uncle Frank [13:44]

But it struck me that before we got to the guts of your email and in the spirit of philanthropy, we might talk about what kinds of portfolios would be useful or helpful for people to be able to meet these philanthropy pledges, particularly in retirement.

Voices [13:59]

Surely you can't be serious. I am serious, and don't call me surely.

Mostly Uncle Frank [14:03]

And fortunately, we do have a nice tool for sorting portfolios by various metrics that we can talk about. This is the portfolio matrix tool that is over at portfolio charts, and I'll link to it in the show notes. But it has loaded into it 21 portfolios ranging from total stock market, classic 6040, Boglehead 3 funds, Merriman Ultimates, Rick Ferry Core 4, and then the kinds of portfolios we talk about here, like the Golden Ratio and the Golden Butterfly, Risk Parity style portfolios. And it allows you to look at them all in one place on one page and then sort them by various metrics, including compounded returns and average returns, 30-year safe withdrawal rates, standard deviation, ulcer index, deepest drawdown, and then it's got a weighted score. But I thought if we're talking about philanthropy and giving money, which kinds of portfolios would be the best suited for that using these common metrics. And we can just go through and sort some of them by common metrics. First one, obviously, you want to have a higher safe withdrawal rate so you can take more money out of the portfolio. Did you get that memo? Rebecca talks about if you're following the four percent rule, you had a portfolio you could take four percent out of, that maybe you would give 0.5% to charities or something like that. In my mind, the better approach would be simply to have a portfolio that allows you to take more money out of it, and then you can spend the four percent and give half or another one percent to your favorite charities or other organizations or whomever else you'd like to give it to.

Voices [15:42]

Yeah.

Mostly Uncle Frank [15:42]

Didn't you get that memo? In my mind, charity begins at home, so I don't limit giving to just formal charities.

Voices [15:52]

From now on, I want to try to help you to raise that family of yours, if you'll let me.

Mostly Uncle Frank [15:59]

But if we sort these portfolios by safe withdrawal rate and look at these metrics, so the best portfolio on the list for safe withdrawal rate is the golden ratio portfolio, followed by the weird portfolio and then the golden butterfly, and then something called pinwheel portfolio. Golden ratio. The golden ratio. What's the answer?

Voices [16:20]

What's the answer? What's the answer?

Mostly Uncle Frank [16:23]

Now, what do those portfolios have in common? They're all risk parity style portfolios. So the risk parity style portfolios have the best safe withdrawal rates and would allow you to give the most money in support of your philanthropy pledge. Uh, correspondingly, we can look at what are the worst portfolios for this purpose.

Voices [16:40]

Gosh!

Mostly Uncle Frank [16:42]

And the worst three portfolios on this list are the total stock market portfolio, the 6040 portfolio, and the Boglehead 3 fund portfolio. So total stock market, 6040, and Boglehead 3 funds are the worst portfolios for people who want to be generous and participate in philanthropy, at least according to this chart and sorting by the safe withdrawal rate. This is all data going back to 1970, by the way. Okay, another thing you might be concerned about or interested in as a philanthropist is what is the standard deviation of the portfolio? Because this basically is how volatile is it? How messy is it going to be to hold a thing? And so if we sort these portfolios by that metric, the portfolio with the lowest standard deviation is the permanent portfolio. That's the old Harry Brown thing that is one quarter stocks, one quarter bonds, one quarter cash, and one quarter gold. So it's extremely conservative. Then we have the Larry portfolio, followed by the golden butterfly, the all seasons, and the golden ratio portfolio, which are all risk parity style portfolios. Now, what is on the bottom of this list? Again, we see the total stock market portfolio, which isn't surprising because it's very volatile. And the next worst one is the Boglehead 3 fund portfolio again, and then what is called the No Brainer Portfolio. I'm not going to go through all of these lists, but all of these portfolios are on this website, and you could explore them there and where they came from and who originated them. So another metric you might want to consider as a philanthropist would be something called the Ulcer Index. The Ulcer Index is an interesting measurement. What it's measuring is how far does this portfolio go down in bad times and how long does it stay down? So it's kind of how much pain would you have to go through or how many ulcers would you get watching this thing go down and up because we know all these portfolios are going to go up and down. And so a philanthropist might want to be assured that they're not going to have too many ulcers, giving some of their money away. And if we look at what are the top-rated portfolios as having the lowest ulcer indexes, we see the golden butterfly, the permanent portfolio, and the golden ratio portfolio, and then the 712 portfolio are the top four with the lowest ulcer indexes, again, dominated by risk parity style portfolios. And what do we see at the bottom of the list? Well, it's kind of a theme here. The portfolios that will give you the most ulcers and probably make you not want to give money away because you're having an ulcer would be the total stock market portfolio, the Boglehead 3 Fund portfolio, and the Rick Ferry Core 4 portfolio. So those will give you the most ulcers if you're trying to be a philanthropist. We also might care about in that vein just the deepest drawdown itself over the past 50 odd years. And what do we see there? Well, the portfolios with the shallowest drawdowns, being the highest rated on this scale, are the golden butterfly portfolio, the golden ratio portfolio, and the permanent portfolio followed by the weird portfolio. Again, these are all these diversified risk parity style portfolios. What are the worst portfolios on the list in terms of having the deepest drawdowns? They are the total stock market portfolio, the Boglehead 3Fund portfolio, and the no-brainer portfolio, which I believe is a Bill Bernstein-inspired portfolio. So again, if you're going to be a philanthropist and not suffer deep drawdowns, you're probably going to be better off with the first three that I mentioned and the worst off or the worst off making it more difficult for you to be a philanthropist if you're using those latter three that I mentioned. So which kind of begs the question why would anybody hold a total stock market portfolio or a no-brainer portfolio or three fund portfolio? To answer that, you need to look at another metric, in particular, average return, because we know people want to have long-term growth, and average return helps that. And that's why people hold total stock market portfolios while they're in accumulation. And so if we sort by average return, what do we get? The top-rated portfolio is the total stock market portfolio, followed by the weird portfolio, which is actually a risk parity style portfolio, followed by the no-brainer, then the three fund, then the core four, and then the golden ratio in sixth place.

Voices [21:02]

A number so perfect.

Mostly Uncle Frank [21:04]

Perfect. You find it everywhere. And what's at the bottom of this list as far as average returns, we have the Larry portfolio, the permanent portfolio, and the all-seasons portfolio, which are all very conservative, bond-dominated portfolios. These portfolios are good for long-term accumulation. So if you didn't want to give money while you were alive and wanted to wait until you were dead, death stocks you at every turn. These would probably be the way to go. To go with a total stock market, don't spend much money, a three-fund portfolio, a no-brainer portfolio, then you can maximize the amount of money you have when you're dead, and you can give the money to charity when you're dead.

Voices [21:47]

Dead is dead.

Mostly Uncle Frank [21:49]

But it's not going to help you to be a philanthropist if you're wanting to give every year. It's just a different portfolio serving a different purpose and a different goal. So what is this telling us? Well, maybe we should rename this podcast and these portfolios instead of calling them Risk Parity Style Portfolios or the Risk Parity Radio Podcast, we could call them philanthropy-friendly portfolios. I mean we can call this the philanthropy-friendly radio podcast. Oh, that is a mouthful. In fact, I had to say it like six times just to get the two F's out of my mouth.

Voices [22:26]

I award you no points, and may God have mercy on your soul.

Mostly Uncle Frank [22:31]

But ultimately, you need to determine how important philanthropy is to you, and maybe if it's important to you and you want to take the pledge, you might consider also choosing a portfolio aligned with those goals. That would probably make a lot of sense.

Voices [22:48]

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

Mostly Uncle Frank [22:55]

But if you don't want to do that and you want to die with the most money and give it away then, then you should choose something else. One of the more common, popular portfolios you hear about.

Voices [23:05]

If you don't start making more sense, we're gonna have to put you in a home. You already put me in a home, then we'll put you in a crooked home and saw in 60 minutes. I'll be good.

Mostly Uncle Frank [23:16]

But you can see just how aligned we are, Rebecca. This is gonna be perfect, you understand? Straight down the line. Straight down the line. But now let's get to your main personal question here, or questions.

Why Traditional Advisors Say No

Mostly Uncle Frank [23:32]

First, my condolences for having to deal with the financial advisory industrial complex. I think a lot of our listeners here do have forms of PTSD from dealing with such people.

Voices [23:45]

Am I right or am I right or am I right?

Mostly Uncle Frank [23:49]

I've heard many, many horror stories over the life of this podcast. Advisors who are conflicted, lazy, greedy, incompetent, they run the gamut.

Voices [24:13]

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

Mostly Uncle Frank [24:20]

But I think your experience is very common because advisors don't run into people like us that commonly. The kinds of people they typically run into are either people they can just sell because they're kind of uninformed, level two kind of people that are fear-based, so they can either exploit those fears or just manage the fears, give them cupcakes and things, make them feel better.

Voices [24:44]

As we're adding a little something to this month's sales contest, as you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? Second prize instead of steak knives.

Mostly Uncle Frank [24:58]

Have some Christmas cards with your single premium life insurance policy.

Voices [25:03]

You know, whenever I see an opportunity now, I charge it like a bull. Ned the bull, that's me now. Tell me, have you ever heard of single premium life? Because I think that really could be the ticket for you.

Mostly Uncle Frank [25:14]

Or most commonly, particularly people your age, you're dealing with people that are really focused on accumulation and just not spending money or avoiding spending money. Because an advisor's greatest client is one that never spends money, particularly if they're an AUM advisor, because then their fees just keep going up.

Voices [25:33]

I drink it up, I drink it up, I drink it up, I drink it up.

Mostly Uncle Frank [25:46]

So many advisors do set very low bars for themselves, tell people they can't spend money or they shouldn't spend money, because it makes their job a whole lot easier. They don't have to try very hard, they can use a cookie-cutter solution, and then they get paid more. So it's all win-win for them.

Voices [26:12]

And starts to drink your milkshake. I drink your milkshake. I drink it up.

Mostly Uncle Frank [26:24]

Might not be win-win for philanthropy if you're interested in that.

Voices [26:27]

No, Will Robinson.

Mostly Uncle Frank [26:30]

But let's talk about your options here because you do have some low-hanging fruit here, if you just change your orientation a little bit. And then there are some more complicated and esoteric solutions that I will mention, at least in passing.

One Unified Portfolio Plus Asset Swaps

Mostly Uncle Frank [26:44]

I think the main problem you're having is you're following some kind of a rigid bucketeering kind of strategy that really isn't serving you very well at all. And I know these kinds of things are popular, but they really don't work very well. And good advisors do not use them and tell their clients to use a total return approach. I'll give you a nice outline from a recent tenant financial Andy Panko's podcast talking about this very problem. The reason people typically use bucketeering kind of strategies is to deal with people's behavioral problems. But they tend to be very inefficient and cumbersome when it comes to actual management, particularly tax management, because what you should be doing is treating all of your assets like one big portfolio, not a separate taxable portfolio you're going to use now and a retirement portfolio you're going to use later. We're going to treat them all as one big portfolio because this is going to help you rebalance things quite easily and not suffer from tax problems. And in terms of the withdrawals, that can be dealt with later through asset swaps and other mechanisms. Because you don't need to take money out of your retirement accounts to use them in an efficient portfolio structure that can be rebalanced. What this means is the first approach you should take is to take all those retirement assets, sell them, and then put those in the diversified retirement assets you need, which if we're following a risk parity style portfolio, are going to be bonds, gold, and perhaps managed futures. And some of them are still going to be in stocks. You can do almost all of this that way because you say you have 60% in your taxable account, which can still stay there, and then you take the 40% and you manipulate that because you do have a very long retirement, so you probably want to tilt your stocks to the higher side. What I mean by the higher side is a good portfolio for withdrawal rates has between 40 some percent in stocks and 70 some percent in stocks. If you were to go to a 60% in stocks kind of portfolio, that would go a very long way towards ameliorating your volatility problems. So that is probably the first thing I do, and what generally most of our listeners do as they get towards retirement is the first place you make adjustments are in the retirement portfolios because you can do it without suffering any tax consequences. So I think probably your next question is, well, then how am I gonna manage this? Because that's usually the question people have, and why I think you're probably wondering how all this is gonna work in practice. Well, most of the time your stocks are gonna go up in most years, in which case you're just gonna sell out of your stocks from your taxable account where they are, and there won't be any issue there. Now, suppose your stocks go down, suppose there's a recession and your stocks go down. If that occurs 100% of the time when there's a recession and your stocks go down, treasury bonds go up in value. So what you want to do is sell the treasury bonds, but you don't want to actually take money out of your retirement account. So you use what's called an asset swap. I'm gonna give you a link to a video made by one of our listeners, Justin at Risk Parity Chronicles, that shows you exactly how to do this. But I'll describe it in brief. So suppose your stocks go down, your treasury bonds go up, your treasury bonds are in your retirement account. What you would do, you would sell some stocks in your taxable brokerage account, you would use that to live on, you would sell an equal number of bonds in terms of dollar figure in the retirement account, and then rebuy the stocks in the retirement account. So at the end of the day, the number of stocks you have will be the same. The number of bonds you have will be less by the amount you had planned to live on. But you did not take any money out of your retirement account.

Voices [30:45]

Excellent!

Mostly Uncle Frank [30:46]

Because you don't have to do that. You're just using it as a rebalancing mechanism to keep the whole global portfolio balanced and in line. And chances are you're gonna be able to do that all the way to retirement, and you'll never have to take any money actually out of the retirement accounts until you get there. It's possible you might have to use some other mechanism like 72T. I honestly really doubt that in this circumstance, because you have roughly equal proportions in the taxable account versus retirement accounts. I think you can asset swap your way all the way through to retirement and beyond.

Voices [31:23]

To infinity and beyond.

Mostly Uncle Frank [31:28]

And I do have other 30-some-year-old retirees who listen to this podcast who are doing exactly what I'm talking about, and they're doing fine.

Voices [31:38]

Groovy baby.

Mostly Uncle Frank [31:40]

So it's been done, and you can do it very simply and very easily.

Voices [31:45]

So let it be written. So let it be done.

Mostly Uncle Frank [31:50]

Alright, let's talk about a couple other options just so you know what they are. One is simply to sell more things in the taxable account and take the tax hit. The tax hit will be less if you sell designated lots instead of just selling. What I mean by that is some of the funds you bought, you bought more recently at a higher price than the ones you bought way back when. And you are allowed to sell those instead of the oldest ones. It will default to the oldest ones if you just sell out of the account. But you are allowed using your brokerage, and each brokerage has a different procedure for doing this, to actually go back and sell, say, the ones you bought a year and a half ago, as opposed to the ones you bought 10 years ago. That will lower the capital gains taxes that you have to pay on that. You may want to do some of this anyway, because you probably want to diversify out of your total stock funds and get some value-tilted funds in there, because that's also an important component of diversification in terms of lowering your overall volatility and having a higher safe withdrawal rate. So I would be looking at that as a potential way to reduce your capital gains taxes if you do need to sell some of that taxable account immediately. Make sure you do take things that are at least a year old so they qualify for long-term capital gains taxes, but not the oldest thing. You literally do need to go back and figure out when you bought all of these lots, separate lots, which ones are which, and then use the procedure that your brokerage will have to sell those specific lots. All right, moving down to less desirable concepts or ideas, you also could decide, let's just take a bigger tax hit in one year. And what I mean by that is your 15% capital gains tax rate goes all the way up to something like half a million dollars. So you could decide in one year, all right, let's just blow through the ACA subsidy, let's just pay for the insurance out of pocket, spend the extra money on that, but then also fill up the entire 15% bracket. Now, I don't know how this would affect your taxes in Utah. I haven't even looked at that. So this may be undesirable for that reason. But in theory, at least, if you were going to worry about the ACA tax credit and you just wanted to say, all right, I'm just gonna bite the bullet one year, you could potentially realize a whole bunch of capital gains in just that one year, but then stay under the ACA cap for the rest of your years, most likely. You can see why I say that's an undesirable idea. But it's there as a possibility. I'll give you an even more esoteric possibility, which is to use what is called a collar, an options collar. This is what Mark Cuban did when he got a bunch of Yahoo stock. I think they bought out his company. He ended up with a whole bunch of Yahoo stock. He didn't want to sell it all at once, but he was worried about it going into the tank, which eventually it actually did. So, what you do there is you buy put options on whatever you're holding, say 20% lower than the price right now, because you're worried about the more than 20% decline in your holdings. Now, that's expensive insurance, but you would buy some of it to cover part of your portfolio. In order to fund that, typically what you do is sell call options that are somewhere above the price, say 10% above the price, and use that money to fund buying the put options. That's why it's called a collar. You have the sold call option above your holding price, and then you have these put options that you bought below your current holding price. That can act as a form of insurance. That is a very advanced strategy. I would say most people should not attempt to do that unless they're like Mark Cuban and end up with millions and millions of dollars of Yahoo stock or something like that. I thought I would just mention it because some of my listeners actually will do things like this.

Voices [36:08]

Real wrath of God type stock. Exactly.

Mostly Uncle Frank [36:11]

And it is a possibility, even though I don't think there's any reason you would really want to take that approach. All right, so those are your main options. Let's talk about some of your other questions

Long Horizon Myths And Target Allocations

Mostly Uncle Frank [36:22]

here. One of the questions you had is about the longevity issue. And this is something that most people in personal finance get wrong.

Voices [36:30]

Wrong!

Mostly Uncle Frank [36:31]

In fact, most advisors get this wrong. There's a misperception that going out 40, 50 years, 60 years makes things way more volatile and way more complicated and way more everything, and it's just a completely different thing.

Voices [36:47]

Fire and brimstone coming down from the skies, rivers and seas boiling. 40 years of darkness, earthquakes, volcanoes, a dead rising from the grave, human sacrifice, dogs and cats living together, mass hysteria.

Mostly Uncle Frank [37:00]

And the answer is no, that's not. That's wrong. Those people aren't doing math.

Voices [37:05]

Forget about it.

Mostly Uncle Frank [37:06]

If you want to see what the math looks like, go get Bill Bangin's new book. Or go to Portfolio Charts and look at the withdrawal charts there. And what you'll see is that as time goes on, your withdrawal rate goes asymptotic, which means it goes down, but it doesn't keep going down. And typically on a forever time frame, I'm talking about a forever time frame, it's only about 0.6 less than a 30-year time frame. So it's not that big a difference. Generally, that is easily made up by the fact that you're not going to be experiencing CPI-related inflation in the last 30 years of your life if you're talking about a 60-year time frame. You're going to be experiencing higher inflation while your children are young. Once they're out, you're going to be experiencing lower inflation than CPI. That is actually going to make up for the difference between a 30-year time frame and a forever time frame, believe it or not. But this is one of the biggest myths of personal finance is that because people are retiring early, their situation is totally different. And they're not going to be able to do anything and they need to have 2% withdrawal rates or something ridiculous like that. These people are not doing math. They're not doing math. They're panicking and they're finding reasons to hoard their money. That is what this is really about when people say, oh, 30 years, 40 years, 50 years, 80 years. It's an excuse for hoarding money. It's panicking as an excuse to hoard money.

Voices [38:33]

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

Mostly Uncle Frank [38:36]

And you shouldn't be doing it, and nobody else should be doing it. But you got to look at the math first. Once you look at the math, you'll see this is not a big problem. You do need to have a good portfolio that is a higher safe withdrawal rate, and this is not going to be an issue for you. All right, now you asked about target allocation also as one of your last questions. And as I mentioned, the portfolios with the higher safe withdrawal rates have somewhere between 40 something and 70 something percent in stocks. Bill Bangin likes to focus on 55 to 60%. That is actually a pretty good place to be. I think at a minimum you should be at 50% in stocks. I wouldn't go any lower than that with what you're talking about here. Because the portfolios with a higher percentage in stocks tend to have a little bit higher percentage in compounded annual growth rate. So something like the weird portfolio that is on that portfolio charts website is 60% in stocks. I wouldn't go over 70% in stocks. So somewhere between 50 and 70% in stocks, and then the rest in bonds and alternatives. Also, do not hold too much cash, more than 10% in cash, and you are putting a cash drag in your portfolio. That is what would actually hurt you on those 40, 50, 60 year timeframes, is holding too much cash right now, believe it or not. Then you last asked in this part of your email about what's the time frame for doing this. I would do your retirement account stuff immediately. As soon as you come up with what your plan is, move that stuff out of stocks and into the bonds and other alternatives. That is going to take a lot of your risk off the table immediately. Poof. The rest of it has to be done in a tax-optimized way. And so you do have to look at what taxes you'll be paying, what brackets you'll be in, these ACA issues, all of those sorts of things. I'm not sure you need to sell a whole lot of things out of your taxable account right away. Ideally, you would, though, diversify your stock holdings so that at least half of them are in value-tilted things, whether that's small cap value or larger cap value, that it's not all in these total stock market large cap funds. And the same is true on the international side. Regardless of how much international you decide to hold, you want at least half of that in the value-tilted kind of funds. Fund like AVDV is a good fund to use for the value-tilted part of the international portfolio. And in terms of a rough framework, I'll give you what I gave to Paula Pant on the Afford Anything podcast since you created a blueprint out of this. If you want a portfolio with a higher safe withdrawal rate that has somewhere between 40% in stocks and 70% in stocks, it has half of that value tilted. The easiest way to do that is have half of it be in your total stock market fund or your growth fund or whatever is on the top there that you already have, and then half of it in a small cap value fund, but there are infinite variations of that. All of the Paul Merriman kind of portfolios follow that for the stock portion of the portfolio. You need between 15 and 30% in intermediate and long-term treasury bonds. Don't use total bond funds, don't use any corporate bonds. The sole purpose of the bonds in this portfolio is to be recession insurance. And the best recession insurance is intermediate and long-term treasury bonds in funds. Because those funds, in 100% of cases since the 1950s, have gone up during a recession when stocks were going down. Now, as far as alternatives are concerned, like gold or managed futures or something like that, the percentage is between 10 and 25%, is a good percent for that. The more you have, the more you would want more than one thing. If you just had one thing, it could be 10 to 15% in gold. And then the last basic concept is less than 10% in cash or cash equivalents or really short-term bonds. Because again, that is actually your biggest danger really long term is having too much cash in the beginning.

Voices [42:41]

Danger, Will Robinson.

Mostly Uncle Frank [42:44]

So those are your guidelines. I know it's a lot to absorb. I will put a lot of links in the show notes. And I'm sure we can have a chat or two about the details in the future if you'd like. But I can tell you you are on well-trodden ground here. And many others have already done what you're about to do.

Voices [43:02]

Now, my third question I'd love to ask you in person. Why not you starting to change and setting goals? And so I want to say it to you personally. Why not you? You've got the brains, you've got the stamina, you've got the vitality, you've got the interest, you've got your life ahead of you. You've got the future. You can do it. If anybody can do it, you can do it. And now here's my last question. Why not now? This is a good time. What a good time to get it together. What a good time to start this process. Having a good plan for your money and for your life and for your future. Why not now? I want all that I've gotten to be yours and much, much more. But now onward to part three.

Gold’s Baggage And Its Real Job

Mostly Uncle Frank [43:50]

Gold.

Voices [43:53]

I love gold.

Mostly Uncle Frank [43:57]

This is a very peculiar asset from. An American perspective. Because only Americans have these very emotional debates about this. In pretty much the entire rest of the world, gold is accepted as a common reserve asset held by wealthy people, particularly if you go to Asia. But we are very parochial in this country, and there's this weird history that I'm going to talk about that colors how people view it and causes them not to be entirely rational about what they're saying or doing with it. So if you want a big summary of this, I did a gold episode for the Catching Up to Fi podcast. I will link to that in the show notes I did it. Last fall at Bill and Jackie's request, and that's all we talked about for an hour.

Voices [44:41]

This is pretty much the worst video ever made.

Mostly Uncle Frank [44:44]

I'm not going to talk about her for an hour right now. But first, let me give you a simple analogy. In my mind, gold is kind of like a bow tie. What do I mean by that? So when our youngest was younger before he went to high school, he preferred to wear bow ties because they were less likely to get caught in things and he just liked the way they looked. And that was fine, and we encouraged him to wear whatever tie he wanted to wear. But when he went to high school, he found that the other kids that liked to wear bow ties were all very politically motivated and they tended to want to be miniature Tucker Carlsons. And so it was almost like a club.

Voices [45:23]

I've got a good mind to join a club and beat you over the head with it.

Mostly Uncle Frank [45:26]

And if you wore a bow tie, it kind of identified you as a member of that club. And he didn't really want to be a member of that club. That's not why he was wearing a bow tie. So he stopped wearing it. And I think that is the problem that a lot of people have with gold and that you mentioned in your email. They're viewing it like this bow tie that it has some symbolism with something that they do not want to be associated with, that has nothing to do with whether the tie itself is good or bad, or useful or not. And that is how a lot of people think about gold. They think about its association with people they don't want to associate with, as opposed to thinking about it as just another financial asset, like most of the world thinks about it. Because in the United States, gold has this kind of socio-political baggage that comes out of its more recent history. And what is that history? So between the 1930s and the 1970s, it was illegal in the United States to hold gold, to own it. The dollar was also on a gold standard, both before and after the Bretton Woods meeting in 1944. Now around 1970, Richard Nixon took us off the gold standard and we went to a fiat money standard, in which case gold was no longer tied to the dollar at a fixed rate, and gold could float in price. Shortly after that, gold became legal to hold in the United States, and you saw a political upswell amongst many people, such as people like Harry Brown, who is a famous libertarian, who wrote How I Found Freedom in an Unfree World and ran for president on the libertarian ticket, and also founded what is called the permanent portfolio, which is one of the antecedents to risk parody-style portfolios, believe it or not. And that portfolio had a quarter in gold in it. But a lot of people of that political persuasion at that time wrote a lot of polemics about why we should go back on the gold standard. There are people that are more in mainstream personal finance or professional finance, like Jim Grant is somebody like that, who have been urging the United States to go back on the gold standard ever since and theorizing that the U.S. financial system was going to implode or explode if we were not on a gold standard and stayed on a fiat standard. And there were other people, or there are other people, who believe that the U.S. government is about to collapse in many different ways. Many of them calling themselves preppers and other related things like that. And they also believe in holding gold. Now, a lot of these people wanted to hold actual physical gold because they were foretelling an actual breakdown of society.

Voices [48:16]

I I blame society.

Mostly Uncle Frank [48:57]

I view it as a racket. Go listen to the catching up to five podcast for more on that.

Voices [49:02]

Bing!

Mostly Uncle Frank [49:04]

They just have a different audience with another different, very inefficient product that they profit from.

Voices [49:10]

Bing again.

Mostly Uncle Frank [49:12]

To me, those people are no different or no better than annuity salesmen.

Voices [49:16]

Am I right or am I right? Am I right? Am I right? I gotta go.

Mostly Uncle Frank [49:21]

So a lot of the people I've been talking about came became known as gold bugs, is what they became known as. And they're looked down upon by a lot of traditional personal finance and other finance. And so you ended up in these two camps, essentially, pro-gold and anti-gold. But it's more like wearing this bow tie or not wearing this bow tie than it is actually about the gold. It's more about the stories they tell about whether the country's going to collapse or not collapse and how that's going to happen and socio-political debates, if you will. But it's also interesting that part of the kind of general opposition to gold and retail personal finance has to do with their business models and what they're trying to sell you and how they manage their practices.

Voices [50:19]

Always be closing. Always be closing.

Mostly Uncle Frank [50:25]

Now, how do we know this? Well, first let's think about the history of retail personal finance going back to the last century. You really didn't have people that called themselves financial advisors until the 1970s. People were stockbrokers. And that mostly persisted really all the way through the 80s and into the 90s. But most of what retail finance was doing, the retail financial services industry was selling products, insurance products, fund products, other products that they could create and sell.

Voices [51:00]

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

Mostly Uncle Frank [51:03]

That is how that industry basically works. They create financial products, then they sell them often at commissions. We didn't really get to index fund investing really until this century in a serious way, where advisors were actually doing that. So gold really didn't have a role for the most part in that world because it wasn't a financial product or thing you could sell. It was also very inconvenient to package and sell because either it was done physically or you had to do it through things like futures contracts, which are not easy for most people to use. So gold did not become a useful thing for retail personal finance until 2004. And what happened then? We had the first gold ETF, GLD, and it became one of the most popular ETFs within the next few years because it became the most easy and convenient way for people to invest in gold, including all the hedge funds. They mostly abandoned their futures contracts and things like that and just started using GLD and then similar funds. And we have cheaper funds and more funds these days to do that with. But because that wasn't really available until 2004, whereas the financial services industry was all growing around that before that, they were always fixated on stocks and bonds, and that persists to this day in many quarters, although it's breaking down recently. Because people in the financial services industry, at least the honest ones, are now having to admit that gold actually does have a good place in a lot of portfolios as a diversifier. And the reasons they don't use it do not have to do with whether or not it's a good asset to use. Doesn't have anything to do with whether a bow tie is good or not. It has to do with how they run their practices and whether they can get away with something more cookie-cutter because their clients aren't going to demand it. How do we know this? I've cited to this twice in episodes 431 and 480. This is an interview of Bob Elliott, who is the former, I think, chief investment officer, somebody on the committee at Bridgewater, the hedge fund. And he was being interviewed on the Compound podcast. The Compound Podcast is run by Josh Brown and Michael Batnick, who are high-level, well-known financial advisors with Rittholtz Asset Management, who are well respected and well regarded. Everybody knows who they are and what they do, and they're the kind of people that other financial advisors will follow because they have that cache about them. So in this podcast, and I'll link to it again in the show notes, they're discussing gold. And Bob Elliott uses gold in his personal portfolio, recommends people use gold in their portfolios as a good diversifying asset. And he was presenting the case for that with the data and statistics that show that that is true. And Josh Brown and Michael Batnick wisely had to agree with him because what he was saying was true. But then the question became, and Elliot pressed them on this. So do you guys use gold in your portfolios? And why or why not? And so Josh Brown kept just sitting there saying for a while, yeah, we don't need it.

Voices [54:21]

Yeah, we don't need it, yeah, we don't need it. We have bonds. We just use bonds for diversification.

Mostly Uncle Frank [54:27]

But Michael Badnik eventually broke down and really explained what was going on here. And I think this is the case for most financial advisors. He said they recognize that gold is a good diversifier, but it's too difficult to explain it to their clients. They've already got their clients kind of trained on these stock-bond portfolios, and they don't like to introduce anything new besides stocks and bonds into these portfolios because their clients tend to panic when they see something and maybe it doesn't perform as well, or maybe they don't understand why it's there. But it's a completely a client management problem, it's a bowtie problem. It has nothing to do with whether gold is a good diversifier or not. It's because it's easier for them to manage their clients that way. And if you think about the kinds of clients that use these expensive financial advisors, they're usually what we call level two people who are always running around looking for shiny objects and magic investing buttons and think that if they appoint the right guy or I have my guy, that that guy is going to be somebody they can brag about at the club, like these guys.

Voices [55:40]

They're sitting out there waiting to give you their money. Are you gonna take it?

Mostly Uncle Frank [55:45]

So Batnik admitted this is all behavioral, not only behavior on the client side, but also behavior on the financial advisor side. That's what they're really worried about is putting something in a portfolio, not having explained very well to the client. Then the client sees it, maybe it goes down next year, the client panics, has a fit, and leaves. That is really what's going on here. That is what is generally going on with most financial advisors. They found a cookie-cutter way of doing their financial side of things. They realize that the value they're providing has everything to do with behavioral risk and bad behaviors by clients and not that much to do with the finances. They can just get away with something on the cookie cutter side. And so that's what they do.

Voices [56:56]

Drink, drink, drink, drink, your milkshake, drink, drink, eye, my drink, drink, drink, drink, your or milk shake, drink, drink it up.

Mostly Uncle Frank [57:08]

Now it's interesting when I say they're breaking down. So this was from last year. Since then, we've seen a lot of the Merrill Lynches and other people start saying, yeah, you should have something like gold in your portfolio. That 6040 is no longer working very well. We need alternative assets besides bonds to diversify these portfolios with. So you're seeing some official pronouncements like that. But what was more interesting to me was a recent interview of Ben Carlson by Jim Dalliott, the White Coat Investor. And Ben Carlson is also with Rid Hole's Asset Management, so they're all part of the same thing over there. And he asked Ben Carlson just last week about putting gold in a portfolio. And Carlson said, Yeah, it can be a useful diversifier. A lot of clients don't understand it, but it can be a useful diversifier, but you really need to have something in the double digits that 2% is not gonna be useful, needs to be more like 10 or 15%, which is typically what we put in the portfolios around here, by the way. So it's like these people are finally coming around to this.

Voices [58:08]

Come around to my thing. Come around to my face.

Mostly Uncle Frank [58:54]

So it's not that this stuff was ever not useful, ever not appropriate, ever not good diversifiers. It's because it didn't fit the business model being run by a lot of these AUM guys in particular. Certainly doesn't fit the business model of people selling annuity products or people working on commissions from funds and other kickbacks to LB1 fees, all the sewage and sludge we talked about a couple episodes ago.

Voices [59:32]

Needle-nosed Ned Ned the head. Come on, buddy, Case Western High.

Mostly Uncle Frank [59:41]

But that is why I think you're more likely to see alternative assets being used by advisors who charge flat fees and similar, because they are not hemmed in by these older business models.

Voices [59:55]

Ned Ryerson, I dated your sister Mary Pat a couple times till you told me not to anymore.

Mostly Uncle Frank [1:00:00]

Ned Ryerson.

Voices [1:00:01]

Bing!

Mostly Uncle Frank [1:00:02]

Bing. And once you see a few of these big boys start doing this, the clients are gonna see this. They listen to these podcasts, they read this stuff, they're gonna start going to their personal advisors asking for this. There's going to be a demand for it, and more people are gonna start doing it. My view of retail personal finance is it's always at least 10 to 15 years behind best practices. The best practices are explained to you by people like Bob Elliott or people like David Stein of Money for the Rest of Us, people who come from more institutional backgrounds who aren't weighed down by the baggage of these retail financial services models, who have been doing the right thing for a long time.

Voices [1:00:46]

Am I right or am I right? Or am I right? Am I right? I gotta go.

Mostly Uncle Frank [1:00:50]

And people outside the United States who have never been burdened by these socio-political debates and bowtie problems.

Voices [1:00:59]

Anyway, I was gonna go through some of the spurious objections that we hear to using gold in a portfolio that are commonly battered around, including it doesn't have intrinsic value and I can't use a discounted cash flow analysis to evaluate it, therefore I can't invest in it.

Mostly Uncle Frank [1:01:15]

That just shows you somebody is ignorant about valuation. That's what it shows. I'll talk about that some other time, but I have a couple of decades of experience in that area.

Voices [1:01:26]

Do you think anybody wants a roundhouse kicked to the face while I'm wearing these bad boys? Forget about it.

Mostly Uncle Frank [1:01:32]

Anyway, this has definitely gone on long enough, so I'm gonna curtail it here, even though I could talk more about it. I would go listen to the Catching Up to Fi podcast if you want some more history and details and why people use gold, what they use it for, and where the demand comes from. It's mostly international, actually. But thank you for being a donor to the Father McKenna Center and Fairfax Casa. Thank you for being one of my newest best friends. Congratulations again on your baby and your house. And thank you for your email.

Portfolio Reviews And June Distributions

Mostly Uncle Frank [1:02:03]

Now we are going to do something extremely fun. And if you've stayed with us this long, the extremely fun thing we get to now is our weekly portfolio reviews of the eight sample portfolios you can find at www.riskparty.com on the portfolios page. We also get to talk about our distributions for June. And it's all pretty much wine in roses here now. Far cry from what it was a couple months ago. So the SP 500 represented by VOO is up 11.26% for the year so far. The NASDAQ 100, represented by the fund QQQ, is up 20.34% for the year. Small cap value, represented by VIOV, is up 15.29% for the year.

Voices [1:02:57]

I gotta have more cowbell. I gotta have more cowbell.

Mostly Uncle Frank [1:03:01]

Gold has finally calmed down, representative fund. GLDM is now up 5.34% for the year so far, which is more normal for that asset class.

Voices [1:03:12]

This is gold, Mr. Barton. I think you've made your point, Goldfinger. Thank you for the demonstration.

Mostly Uncle Frank [1:03:19]

Long-term treasury bonds, represented by the fund VGLT, is down 0.23% for the year. REITs, represented by the fund REET, are up 9.84%. Commodities, represented by the fund PDBC, are up 32.98%. Still leading the way. I'm an oil man.

Voices [1:03:40]

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.

Mostly Uncle Frank [1:03:52]

Preferred shares represented by the fund PFFV are up 3.08%, and managed futures are still managing to be up 10.91% for the year so far. So moving to these portfolios, first onesie all seasons, this is a reference portfolio. It is only 30% in stocks and total stock market fund, 55% in intermediate and long-term treasury bonds, and remaining 15% in golden commodities. It was up 1.06% for the month of May. It's up 6.05% year to date and up 30.74% since inception in July 2020. For June, we'll be taking $35 out of it. It'll come out of accumulated cash. It's at an annualized rate of 4%. It'll be $207 year to date and $2,281 since inception in July 2020. These portfolios basically started with about $10,000 each for reference. Next one's Golden Butterfly. This one is 40% in stocks divided into 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. It's up 0.91% for the month of May. It's up 6.53% year to date, and up 69.96% since inception in July 2020. For the month of June, we'll be taking $53 out of it from accumulated cash. It's at a 5% annualized rate. It'll be $315 year to date and $3,178 since inception in July 2020. Next one's 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 the remaining 6% in cash and a money market fund. It's up 1.7% for the month of May. It's up 7.40% year to date, and up 65.83% since. Inception in July 2020. For the month of June, we'll be taking $52 out of it. It always comes out of cash from this portfolio. That is how its investor policy statement is structured. That'll be $304 year to date and $3,107 since inception in July 2020. Next one is the Risk Parity Ultimate. I'm not going to go through all 12 of these funds. It's kind of our kitchen sink portfolio. It's up 1.95% for the month of May. It's up 7.54% year-to-date and up 50.28% since inception in July 2020. For the month of June, we'll be withdrawing $55 out of it. It's going to come out of UPRO, to which there is a 5% allocation in this portfolio. That is a leveraged SP 500 fund. That's at a 6% annualized rate, so that'll be $324 year-to-date and $3,560 since inception in July 2020. Now we're moving to these experimental portfolios.

Voices [1:07:06]

Tony Stark was able to build this in a cave with a bunch of scraps.

Mostly Uncle Frank [1:07:13]

These all involve leveraged funds.

Voices [1:07:15]

You have a gambling problem.

Mostly Uncle Frank [1:07:18]

And are very volatile, so don't try this at home. Even though I know some of you do.

Voices [1:07:23]

You can't handle the gambling problem.

Mostly Uncle Frank [1:07:27]

So the first one's the accelerated permitting portfolio. This one is 27.5% in TMF, that's a leverage bond fund. 25% in UPRO, that's a levered SP 500 fund. 25% in PFFV, a preferred shares fund, and 22.5% in gold, Jill EM. It is up 3.81% for the month of May. It's up 8.23% year to date and up 33.59% since inception in July 2020. For the month of June, we are taking out $45. It's coming out of that UPRO. That's at a 6% annualized rate. It'll be $264 year to date and $3,371 since inception in July 2020. Next one's the aggressive 5050. It is one-third in a leverage stock fund UPRO, one-third in TMF, a levered bond fund, and the remaining third in ballast and a preferred shares fund and an intermediate treasury bond fund. Did have a good May though. It's up 5.58% for the month of May. It's up 8.10% year to date, and up 6.26% since inception in July 2020. For the month of June, we are taking out $36. It's coming out of UPRO, that Levered Stock Fund. It's at a 6% annualized rate. It'll be $205 year to date and $3,268 since inception in July 2020. Next one's a levered golden ratio. This one's a year younger than the first six. It has 35% in NTSX, that is a composite levered fund consisting of the SP 500 and Treasury bonds in a 6040 kind of portfolio levered up 1.5 to 1. 15% in AVDV, that is a international small cap value fund. 20% in GLDM, gold, 10% in KMLM, that is a managed futures fund, 10% in TMF, the Levered Bond Fund. The remaining 10% in UDOW and UTSL, which are a levered Dow Index Fund and a Levered Utilities fund. It is up 0.73% for the month of May. It's up 8.45% year to date, and up 30.00% since inception in July 2021. For the month of June, we're taking $59 out of it. It's coming out of AVDV, that International Small Cap Value Fund. It's at a 7% annualized rate. So we're really pushing it there. It'll be $314 year-to-date and $2,274 since inception in July 2021. Now moving to our last one, the Opter Portfolio. One portfolio to rule them all. It is ruling them all. It has 16% in UPRO, that levered SP 500 fund, 24% in AVGV, which is a worldwide value tilted fund, 24% in GOVZ, Treasury Strips Fund, and the remaining 36% divided into gold and managed futures. The interesting thing about this fund is actually the fact that we have it on a almost never rebalanced schedule. It only rebalances when the Fed changes direction on the interest rates. And other than that, it just takes from the highest valued asset. So in this case, you know, the UPRO is 6% above where it started. So it's at 22% instead of 16%. And things like the Treasury Strips Fund are about 10% below where they started, mostly because the other assets have grown so much. But it's an interesting experiment on that score. So it is up 3.54% for the month of May. It's up 12.45% year to date, ruling them all, and up 45.09% since inception July 2024. For the month of June, we'll be taking $65 out of it. It's going to come out of that UPRO, that levered SP 500 fund. It's at a 6% annualized rate. It'll be $373 year to date and $1,268 since inception in July 2024. And that concludes our weekly and monthly portfolio reviews.

Voices [1:11:58]

You fool! Is there an antidote? Of course there is. Right here. But it'll cost you a guinea.

How To Reach Us And Support

Mostly Uncle Frank [1:12:05]

But now I see our signal is beginning to fade. If you have comments or questions for me, please send them to Frank at RiskPartyRadio.com. Then email us Frank at RiskPartyRadio.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.