Cold Open And Welcome

Voices [0:00]

A foolish consistency is the bottom of the little 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.riskparodyradio.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, right?

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 [2:05]

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 529. Titan Risk Party Radio. Welcome to season seven. Season seven, believe it or not. 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 also talk about monthly distributions for August. Won't that be exciting?

Voices [2:57]

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

Listener Question On Drawdowns

Mostly Uncle Frank [3:05]

And first off. First off, we have an email from Luke. Luke from Quebec.

Voices [3:14]

So I have to I have to share with you some of Quebec's wonderful culture. And Luke Wright.

Mostly Queen Mary [3:23]

Hi Mary and Frank. When you mentioned my name in episode 523, I couldn't remember writing to you recently. For a second, I worried I'd sent you an email in a drunken haze until I remembered that I don't actually drink. Anyway, thanks for the response. I agree that Ben Felix puts out great content, but the Canadian finance industry definitely loves its milkshakes. And as you pointed out with PWL Capital's fees, the straws are quite large.

Voices [4:03]

I'm going to drink your milkshake. What do you think of that? Um don't understand? Well, let me explain it to you. You have a milkshake, and I have a straw. Well, that's a really big straw. My straw goes across the room, and I drink your milkshake. I drink it up!

Mostly Queen Mary [4:34]

As you always say, we have to apply the Bruce Lee principle. Still, it can be really hard to separate the wheat from the chaff. A lot of finance experts build trust by sharing free, solid advice, only to cash in that goodwill later by sliding in self-serving marketing. Bing! Before you know it, the audience is hanging on every word, completely unaware they're being sold to. Bing again. Always be closing indeed. Because only one thing counts in this life. Get them to sign on the line which is dotted. But enough of my ranting. The audience is here for your rants, not mine. Let's get to my question. Many portfolios survived a 5% inflation-adjusted withdrawal rate, even for retirees who started in late 1999. But looking back at the actual numbers during the 2000s lost decade, I wonder if I would have had the nerve to keep withdrawing the full amount while watching my capital shrink. I lived through both the dot-com bust and the great financial crisis. I shamefully confess that I was a stock-picking cowboy during the great financial crisis. You have a gambling problem. Because of that, I didn't feel the same pain as the buy and hold crowd, but my stock picking days are definitely not a model to follow. Even with the drawdowns, I would have been better off methodically investing in an all-stock accumulation portfolio. So, how did you cope with those massive drawdowns in the 2000s? And going forward, do you have firm rules for when to cut back on withdrawals? How bad do things have to get before you actually reduce your spending?

Voices [6:20]

You're gonna end up eating a steady dying of government cheese and living in a new river.

Mostly Queen Mary [6:28]

Are you relying on fixed percentages, guardrails, guitenkler, or maybe just a crystal ball? I'd love to hear your thoughts. In closing, I want to say thank you again. To show my gratitude and to support a good cause, I've made another donation to the Father McKenna Center as part of the top of the t-shirt campaign. Yeah, baby, yeah. Your teachings have had a huge impact on how I think about investing, money, and life. I hope we get to meet in person someday. Until then, I'll be listening. All the best to you both, Luke.

Voices [7:04]

La, la la. In French, that means there. But in Quebec, we like to use it as something like an exclamation point, an emphasis, and we insert it everywhere. La la, Fait là, you've prone lala, ok là? La la, écoute moi là, ok là? Mais là, mais là, mais oui, comprenez-vous là.

Mostly Uncle Frank [7:24]

Well, first off, thank you for being a donor to the top of the t-shirt campaign at the Father McKenna Center.

Voices [7:31]

Yes!

Mostly Uncle Frank [7:32]

As most of you know, we don't have any sponsors on this program. We do have a couple of charities we support. Fairfax Casa for Mary and the Father McKenna Center for me. Full disclosure, I am on the board of the Father McKenna Center and am the current chairman of the board. And am I right, Stephen Eighty? Yes, you are, Frank.

Voices [7:50]

Absolutely, Frank! You bet I am.

Mostly Uncle Frank [7:53]

So we are running the Top of the T-shirt campaign as we introduced in episode 518. This is in coordination with the fundraiser called the Walk for McKenna. We do at the end of September every year, and we have t-shirts that go with that, and the top donors get to get their logos on the t-shirt, and the higher you are on the t-shirt, it means the more money you gave. And we were on the top of the t-shirt last year, and we're hoping to do that again. We have two generous listeners, Matthew 63 and 4J, who have put up $25,000 in matching funds for this effort. Now I've been pretty busy recently, so I haven't actually checked on how far we are along in matching all of the $25,000, but I know we've made a lot of progress, and I will hopefully get that information by next week sometime. But if you do make a donation, you get to go to the front of the email line here. Just make sure you mention it in your email so I can duly move you to the front of the line. And I'll put that link in the show notes again so you can find it. But now getting to your email.

Modeling Worst Cases With Backtests

Mostly Uncle Frank [8:55]

I guess there are two answers to give, one being what did we actually do in the 2000s, and then what are some ideas as to how to cope with it or think about it in advance. And like you, we were nowhere near financial independence in the 2000s. In fact, we were in the middle of accumulation. We spent the 1990s really getting out of our student debt, so other than putting money into retirement accounts and maxing those out, we didn't do a whole lot of other saving or investing until the student debts were cleared. My salary went up a lot during the first decade of the 2000s because I became a partner at the firm in 2002, and that's when your salary goes up a lot. So we were mostly just shoveling money into these accounts and weren't really thinking about what the market was going to do because we figured we weren't going to get anywhere near financial independence until like 2015 or something anyway. The other odd thing we did, which I'm not sure was the best idea in retrospect, but it worked out for us, was when we bought our house, which we're still in in 2002, the interest rates were pretty high. They were at least as high as they are now, I think. And so our strategy for that was to take out a five-year arm loan and try to pay off as much of that in the next five years or five or six years. Because believe it or not, at that time people thought that interest rates are going to go back up to like 1980s levels just any day now. That's what people were saying from about, I don't know, 1990 until the great financial crisis itself. So in retrospect, we shouldn't have been paying down our mortgage so fast, but we didn't know there was going to be a great financial crisis and interest rates were going to go into the floor and that we could have refinanced then. Say la vie. On the other hand, since we were putting extra money towards that, we weren't putting the extra money in the market at that time. We really put a lot more money in the market after we got the mortgage paid off in about 2008. It sure did feel good in 2008, though, to know that all that money we put into the mortgage and wasn't in the stock market was actually beneficial to us, at least at that point in time. So we just basically kept investing and kept our head down. It did profoundly affect me though later on when I was trying to plan what to do when we became financially independent, because obviously I was worried about having that come back and having that kind of experience again. And so that is actually one of the reasons that led me to risk parity style investing. Because I did want to make sure that we'd have a portfolio that would hold up in those kind of circumstances if they came around again, as well as the circumstances of the 1970s, which were also well publicized. I think Ben Carlson does make this point well in his recent book that you are correct that just shoveling more money in the market during accumulation, regardless of what's going on, is really the way to go. And if you're early on in your accumulation, you actually hope the stock market is going to crash because then you're buying things at lower levels. I think he talked a lot about this in the podcast interviews I've heard of him recently. There's a good one at Catching Up to Fi, I can link to in the show notes, where he's just talking about the difference between investing at quote the wrong time and quote the right time is not as much as you might think. So you might as well just get invested during accumulation and not be fiddling around with guessing or worrying about what's going to happen in the near term. So I think then we get to the second part of your question is, well, let's presume you are financially independent and you are worried about a 2000 scenario or a 1970s scenario happening again. Well, there there's a good way to just model that and kind of look at what it might feel like, and that is simply to use the simulators that we've got, such as test folio, putting in sample portfolios, and then just looking and see how they performed under some kind of withdrawal that you apply to them, and you can compare various portfolios and see how that would have been. And I'll put a link to that in the show notes starting at the year 2000. Put a golden butterfly portfolio and a golden ratio portfolio and then a 6040 and a three fund. And you can see which you'd prefer to hold in that circumstance. But I'm guessing you already know the answer to that.

Voices [13:18]

That is the straight stuff, oh funk master.

Mostly Uncle Frank [13:21]

A nice place to look at a graph of that in colored format is also at portfolio charts. Use what's called the heat map, and then you put in your portfolio, and then you can see what it was like starting at each year going back to 1970. That if you started your withdrawals on a particular year, what would the outcome be like and how long would you be underwater and all those kinds of things? But I think that's definitely an exercise you want to go through with whatever plan or portfolio you have. You do want to understand how it performed in the worst historical scenarios. This is a basic kind of testing that most financial advisors do. It's a required kind of testing to do if you are using a Monte Carlo simulation that isn't already based on historical data. If you just do Monte Carlo's based on parameterized data, which means an average return and a standard deviation, your results are not necessarily going to be that accurate. And so you also need to do the historical analysis. You're going to be better off using the historical data and then doing the Monte Carlo simulation. But that is also another way to get a feel for how bad it's going to be. Because ultimately it's going to come down to choosing essentially between two or more plans. And the real question is, would I feel better with plan A or plan B? And so you keep iterating plan A and plan B until you find something that would be acceptable in the worst-case scenarios. Now you

Spending Flexibility Beats Fixed Rules

Mostly Uncle Frank [14:52]

also asked it what point or fixed percentages would we consider reducing our spending. And I think that the reality of it is trying to use these things like guardrails where you have this fixed percentage in your mind, I don't think that's actually all that helpful in real life. What tends to make more sense in real life is you have discretionary expenses and you can adjust them year by year pretty easily. And what I'm thinking comes off the top, the first thing would be are we going on the really expensive vacation this year or just a more moderate vacation? That's one easy way to pull back, even when you're just feeling a little bad. And the same thing with planned home renovations or buying the new car or other things like that, it's very easy to just postpone some discretionary expenses in a given year or even a couple of years to deal with feeling bad about something for a bit. And if you do it the way we do, where we have 60% of our spending is mandatory, that's the 3%, 1% is comfort expenses, and 1% is extravagances. Basically, we have 40% of our spending every year that's discretionary in some way, shape, or form. So it's just not as big a deal as you might think. If I had to put a percentage on it, I would say maybe 30%, because that would be greater than any percentage that I've seen using these portfolios. But ultimately, this is actually more on the expense planning side of things than it is on the portfolio management side of things. Even though I know people like to just put these variable withdrawal strategies into their models, which is fine and it's good, but just recognize that real life is a bit different and actually a lot more flexible, at least if your mandatory expenses are in a reasonable range of not more than about 60%. The other thing you should recognize is that your personal rate of inflation is also flexible because you can change what you're spending on. And chances are your expenses are going to peak around the time your kids are 19 or 20 years old, high school, college age type stuff. Our experience has been that our nominal expenses have gone down for the past five or six years. And that's mostly just pushing the kids out of the nest.

Voices [17:10]

I don't care about the children. I just care about their parents' money.

Mostly Uncle Frank [17:14]

But again, that doesn't require a whole lot of planning on the portfolio side of things. It's more just planning not to inflate your lifestyle and at least in any significant form. I mean, ultimately, if you're really having anxiety about your monetary situation or any situation, you may need some therapy about that, or at least a financial advisor that focuses on keeping their clients sane, which is largely what financial advisors actually do. It's more about the psychology of things than it is about the actual finances. I like to say the retail financial services industry is not about finances at all. It's really about fear, either exploiting fear to sell things or managing fear in this case or catering to fear, depending on what kind of thing that they're setting up for you.

Voices [18:08]

A B C A Always B B C closing. Always B closing. Always be closing.

Mostly Uncle Frank [18:19]

But in general, getting a little therapy on the side is going to be way more efficient, cost-wise, and effectiveness-wise than paying some giant AUM milkshake drinking fee. So make sure you're using the right tool for your psychological job there. So those are some of my thoughts.

Voices [18:52]

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

Mostly Uncle Frank [18:57]

I also need to thank you for being our top man that takes care of our website. SACOSH. Which has made things so much better for everybody involved, especially me. I just stare at my desk, but it looks like I'm working. Because I can now actually find the things that I remember talking about at some point in time. At least most of the time.

Over Diversification In Risk Parity

Mostly Uncle Frank [20:32]

Second off, we have an email from Nick.

Voices [20:35]

Hey look, mister, we save hard drinks in here for men who want to get drunk fast, and we don't need any characters around to give the jump a catmosphere. Is that clear?

Mostly Uncle Frank [20:48]

And Nick writes.

Mostly Queen Mary [20:50]

Hi, Frank. First off, I just wanted to let you know that I recently made a donation to Fairfax Casa. Thanks to you and Mary for championing such a great cause. The best, Jerry. The best. I'm writing in because I'd love to get your thoughts on a portfolio construction question. Is it possible to be overly diversified in a risk parity setup? My plan is to use a framework similar to the Golden Ratio portfolio, but I'm looking at splitting my equities into domestic and international sleeves. Here's my proposed target allocation: Equities 50%, 15% SPMO, U.S. large cap momentum, 15% AVUV, U.S. small cap value, 10% IDMO, Internum, 10% AVDV, International Small Cap Value, Bonds and Alternatives, 50%, 25% TLT, long term treasuries, 10% GLD, gold, 10% managed futures, 5% cash. This creates a dual barbell approach for the equities, size and style across both US. US and international. My main concern is whether this leaves my overall equity engine too weak to drive the necessary growth. Should I just have more conviction in the U.S. market and dump the international holdings altogether? Additionally, do you think using momentum funds, SPMO and IDMO, is a fine substitute for traditional large cap growth on the heavy end of the barbell? Thanks for all the great content and insights, Nick.

Voices [22:28]

Well, that's another thing. Where do you come off calling me Nick? Well, Nick, that's your name. What's that got to do with it? I don't know you from Adams off us.

Mostly Uncle Frank [22:38]

Well, Nick, thank you for being a donor to Fairfax Casa. That's Mary's charity. The Fairfax Court Appointed Special Advocates. And you can also find that at the support page at www.riskparty.com. But if you donate to that, you also get to go to the Farm of the Email line as Nick has done here. Wow woo is very nice. So just looking at this proposed portfolio you've got here, yeah, this looks pretty good. It looks like what a lot of people hold, and it's actually kind of similar to what we hold in practice. We just have less on the international side than you do. Because instead of having six percent in cash like the sample golden ratio portfolio, we just don't feel we need to hold that much cash. So we allocate that six percent to international stocks. And IDMO and AVDV are also the ones that we've chosen because I found that that international momentum fund, IDMO, tends to capture international growth and perform a little bit better than the international growth funds that are out there. Because the truth is there isn't a whole lot to pick from on the international growth side, all things considered, and compared to what is going on in the US, because all the really big important growth companies are US-based. That's just the way of the world. I know, I know, I'm not including TSMC and ASML, but they're not the biggest. So, yes, if you're looking for a portfolio that is likely to have a high safe withdrawal rate, this one fulfills all of those basic guidelines that are in that risk parity blueprint that Paula Pant created out of the interview that I did with her episode 618 of the Afford Anything podcast. And I'll see if I can link to that again in the show notes, both the podcast and the blueprint. And that means you have somewhere between 40-ish percent and 70-ish percent in equities in the portfolio. You have between 10 and 25% in intermediate and long-term treasury bonds, and then between 15 and 25% in alternative assets that are not correlated with either stocks or bonds, and then less than 10% in cash. And what you've described here fits well within those parameters. And I guess your main question whether this leaves your overall equity engine too weak to drive the necessary growth. And the answer is no, but you could have more equities if you wanted them. You're gonna have a more volatile portfolio overall. But you also should remember that you are getting some more effectively growth, even though you really wouldn't call it that out of managed futures and gold. Because those are generally going to have returns that are somewhere between stocks and bonds. And that's really the main problem with a lot of these bond-heavy portfolios, like a 60-40 or 50-50, that there's just too many bonds in them, and bonds are very low yielding and tend to be much lower yielding than actually things like golden managed futures. Now I should note you didn't say what you were doing with this portfolio. I was assuming that you were using it for decumulation or that you were taking money out of it. If you were actually trying to accumulate, then yes, I think this portfolio would be too conservative, and you do want to have more equities in that kind of portfolio. In fact, if it was long term, you'd want to have all equities in this portfolio. Because an accumulation portfolio is just a different animal from these sorts of well-diversified portfolios that are designed for higher safe withdrawal rates. Just two different purposes, so two different approaches. If you do accumulate in a portfolio like this, yes, you'll get there. It'll probably just take a little longer. And I'll link to an article by Tyler at Portfolio Charts called Minimizing Your Miss, which compares sort of what it's like to hold an all-stock portfolio versus one of these kind of portfolios. I think that's kind of instructive.

Momentum Funds And Fund Hopping Risks

Mostly Uncle Frank [26:30]

And you can see the trade-offs there. Now I think the most interesting choice you've made goes to this last question: whether you can use SPMO, this US large cap momentum fund, essentially as your large cap growth fund or large cap growth y kind of fund. The answer is I think yes you can because it does fit in that category. It does change over time because it's a more active fund in terms of swapping things in and out. If you look at, for instance, what's in that fund right now, the only really like Mag 7 company I think that's prominent is NVIDIA. Other than that, it's got things like Micron and Western Digital and all these chip companies, and then a bunch of other things. I think caterpillars in there, all of these things that are basically on a tear because that's what that fund is designed to do. And I have to admit, I have been skeptical of that kind of strategy just because there's so many different kinds of momentum strategies, and our friend Alexi the Dude was the one who started talking about this many years ago in this podcast, really. And I wasn't sure that that was the right way to go, even though I couldn't say it was the wrong way to go. What has put me more in the camp that thinking that SPMO might be a good or better choice than say a large cap growth fund is the fact that we now have more data to look at. And in particular, if you go to test folio, they've simulated that fund SPMO SIM all the way back to the 1970s, and it does perform extremely well over time, better than a large cap growth fund. So it's hard to say that would be a bad choice, and in fact, it may be a better choice than just a straight large cap growth fund. You can tell I'm hemming and hawing because I really don't know the answer as to whether it is or not. I'm not a smart man. But if you're not confident about it, you could also split that allocation. So it'd be like 7.5% SPMO and 7.5% something like VUG or the Schwab variant SCHG or any other number of large cab growth index e funds. But do just make sure you're committed, whatever you decide to do, because the one thing you should not be doing is thinking you can go to SPMO and then if it underperforms another large cab growth fund, you jump to that one, and then maybe you jump back. You don't want to be doing anything like that. You do want to come up with a relatively static allocation and just rebalance in or out of it and not be fun jumping or fun hopping. That's pretty much the the worst thing you can do, and is really why amateurs tend to underperform indexes and even their own investments because of this tendency to fund hop when something has not performed well for a year or two or five. So hopefully that helps. And thank you for your email.

Exercise As The Missing Asset

Voices [29:31]

Last off.

Mostly Uncle Frank [29:33]

Last off, we have an email from Isaiah.

Voices [29:37]

Off we go into the Bible into the song.

Mostly Uncle Frank [29:45]

And Isaiah writes.

Mostly Queen Mary [29:47]

Hi, Frank and Mary. I wanted to share a few thoughts I've had recently with the Risk Parity Radio community. Many of us have plenty of money, but not enough health and physical vitality. If there were a wonder drug that could radically reduce my risk of metabolic disease, heart disease, and cancers, and at the same time improve my ability to hike, play with kids, and work around the house, I would pay dearly for it and millions of others would too. Now how much would you pay? This drug, of course, exists. It is exercise. Unfortunately, you can't buy it directly with dollars. You have to pay in time, effort, energy, and discomfort.

Voices [30:27]

You get the Ginsu knife, the matching carving fork, the versatile six-in-one kitchen tool, a set of six-stake knives, and the spiral slicer. You get them all. Guaranteed in writing for 50 years for only $9.95.

Mostly Queen Mary [30:41]

These costs lead many of us to severely underweight exercise in our life activity portfolio. Of course, you don't need to spend money to exercise. There are many ways to do it for free or very little. Running, calisthenics, and low-cost gyms are available, as are YouTube programs and library books. However, despite all of those resources and more being available to me throughout my adult life, I never invested the time and effort in physical exercise that I should have, given its immense value. Over the past few years, I have found a few ways to leverage my relative financial strength, learning to be less frugal as I achieved my savings goals, to overcome my weaknesses and discipline and motivation around exercise.

Voices [31:24]

That's what I'm talking about.

Mostly Queen Mary [31:26]

To keep this message somewhat concise, I'll offer two specific tactics. If anyone is interested in more, they can leave a comment on Facebook for this episode and I can share with others. The thing that is currently giving me the highest bang for the buck is an in-home smart gym called Tonal. The combination of quality hardware, extremely good software, and a large integrated content and programming library have made both developing consistency and achieving highly efficient fitness output per time input better than any other approach I've found. It is expensive, both in the initial purchase and the ongoing content subscription fee, but the convenience and flexibility of having it at home, the persistence from having an app integrated on my phone to remind me not to fall off, and the software and programming that remove the mental strain of deciding which movements to do today or what weights to select for each rep and set have made it an extremely effective system for me. Well worth the money. I started using the tonal when I moved cross-country into a suburban house with a few square feet that I could dedicate to it. Before the move, I lived in an urban townhouse with no spare square feet. I did have a CrossFit gym nearby that had a friendly and welcoming culture and several class offerings per day. If you're starting from zero and both in-home and good commercial gyms are options, I'd recommend the gym with a social component route. If you've already got somewhat of a fitness routine, but aren't giving it enough rigor and effort, I'd recommend going the in-home tonal route. Lastly, if you're curious about how much and what kind of exercise you should be doing, I'd recommend the book Outlive by Dr. Peter Atiya as a starting point. Isaiah.

Voices [34:22]

We have the capability to make the world first.

Mostly Uncle Frank [35:04]

That's the other way to give to the charities associated with this program. You can become a donor on Patreon at the link at www.riskparty.com on the support page. And then you'll be a monthly donor, and we do sweep up all of that money and either give it to the Father McKenna Center or Fairfax Casa, depending on the season.

Voices [35:26]

Who elected you leader of this outfit? Well, Pete, I figured it should be the one with the capacity for abstract thought. But if that ain't the consensus view, then hell, let's put it to a vote. Suits me. I'm voting for yours truly. Well, I'm voting for yours truly too.

Mostly Uncle Frank [35:43]

But that has also moved you to the front of this email line. But getting to your email, I think these are good suggestions.

Making Fitness Easier To Sustain

Mostly Uncle Frank [35:50]

I am certainly not an expert in this area and don't have a lot more to say about it. I do tend to do what's called satisficing here because I've kind of decided that what's most important to me is to live a long, healthy life like they describe in that book Outlive that you mentioned. But I really don't want to make more effort or time into that than is necessary, and I really want to do it doing things that I enjoy doing for the most part.

Voices [36:18]

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

Mostly Uncle Frank [36:22]

And I do think that probably is one of the ways to succeed at this, or the most common way to succeed at this, is just to make sure that you actually like doing whatever you're doing in terms of fitness so that you actually keep doing it. And some of those things may not sound a whole lot like quote fitness, unquote. So, for instance, my father's 97 years old and was really doing well both physically and mentally until just a couple of years ago. His short-term memory has really declined over the past few years. But he was very healthy into his 90s. And what did he do? He didn't do anything special, honestly. He did retire relatively early, I mean in his 60s, and then spend a lot of time working in a large yard. They had five acres of land out there in Montana when they moved out there. And then he spent a lot of time fishing, fly fishing, and he spent a lot of time backpacking with my brother. And he was backpacking into his 80s. I suppose you can do rucking now if you just want to simulate that. But he never participated in any kind of you know large-scale fitness program or effort or anything like that. And if you do do a lot of hiking, you will find these people in their 70s and 80s who are just like billy goats jumping from rock to rock. And it's just because they've been out there walking around and carrying things for so long, and that's how they've stayed fit. My own journey since retirement has been a bit tortured, honestly.

Voices [37:50]

Let's face it, you can't talk them out of anything.

Mostly Uncle Frank [37:54]

And I don't think I'd necessarily recommend it, at least not the gout part. Because that is what really slowed me down for two or three years after I retired, I was having repeated gout attacks and various changes in medication until finally we got that under control about two and a half years ago. It's been much better since then, but that really impacted my ability to do a lot of exercise because I found that if I did a lot of strenuous exercise, it could trigger a gout attack. It was just no fun. I don't have that problem anymore. But for me, to the extent that I do a lot of lifting, we have a lot of weights in our basement, as you can imagine, from growing up with three high school and college athletes. We end up with a lot of training equipment. So I use that, and then I like to ride my bike. And I try to do that a hundred miles a week when the weather's nice. Now Mary's much more organized and diligent about this. She probably spends about two hours at the gym almost every day, and she swims, and she's got a personal trainer, and they lift weights, and she does cardio, and she also attends yoga classes, so she's got it all dialed in. But again, she really enjoys doing that as part of her day. But there is better living through chemistry, too, especially after age 60.

Voices [39:19]

It's like I picked the wrong week when I'm filming.

Mostly Uncle Frank [39:22]

So during my entire retirement over the past, I guess, five or six years here, I'd been overweight starting at retirement. I weighed about 225 pounds, and I kept promising myself I would lose about 20 pounds. And I failed miserably at that for pretty much the whole time until last year.

Voices [39:41]

You're not going to amount to jack squats.

Mostly Uncle Frank [39:46]

And in fact, I actually gained weight, and so I was up between 235 to 240 pounds in November of last year, and so I went on the terzepitide, a GLP1 drug science. And since last December, I am now down about 35 pounds, and so I'm weighing more like 200 pounds right now. And when I had my checkup with the doctor, which is something you should be doing, all of my markers, the ones that Peter Atia talks about and outlive, had improved. You know, my resting glucose had gone from pre-diabetic down to low normal. My blood pressure was down. I had two medications for that. I got off one of them. Hopefully, I'll get off the other one. And everything else is just looking better. So I think that's going to be a solution for a lot of people going forward, or at least a partial solution. So your mileage may vary. But I would make sure you get all that stuff checked and take whatever medications you need to keep your cholesterol in line and your blood pressure in line and whatever your doctor tells you to keep in line with whatever pills they've got there.

Voices [41:04]

You're on drugs! I don't know, mom. Oh, I'm sorry, I'm okay, I've been thinking, you know? Why don't you get your daddy? You're like, no, you're on drugs! I'm not, I'm okay, I'm just thinking, you're like, no, you're not thinking, you're not drugs. No, no, people don't act that way.

Mostly Uncle Frank [41:19]

Hopefully you won't need too many. And of course, I had to put this into artificial intelligence, which I was fiddling around with last year, basically asking it, what is kind of the minimum

Weekly Portfolio Review And Distributions

Mostly Uncle Frank [41:30]

effort I need to make to make sure that I live for a long time and are reasonably healthy at it in terms of what kind of exercises to do.

Voices [41:39]

Let me ask you a question, Joanna. What do you think of a person who only does the bare minimum?

Mostly Uncle Frank [41:47]

And it gave me these two odd, interesting exercises. This one where you're sitting on the floor and you're just moving your legs back and forth like 90 degrees. They're bent already. And that is supposed to keep your muscles in your hips more limber. And the other thing it says to do is practice getting up and down. Suppose if you want to formalize that, it would be something like Turkish ghetto to the kettlebell. But that is actually one of the tests that people use to see how healthy somebody is in old age and how long they're likely to live is can they get up or down without supports? So you can literally practice getting up and down off the floor as one of your exercises for longevity purposes. At least that's what artificial intelligence tells me.

Voices [42:33]

Are you stupid or something?

Mostly Uncle Frank [42:36]

Anyway, this has just been a frolic and detour. Don't rely on anything I have to say in this area. Because I'm at a much lower level of competence in it than a lot of people. Thank you for being a donor to Father McKenna Center via Patreon. Thank you for your suggestions. And thank you for your email.

Voices [43:14]

Now we are going to do something extremely fun.

Mostly Uncle Frank [43:18]

And the extremely fun thing we get to do now is our weekly portfolio reviews of the eight sample portfolios you can find at www.riskpartyrader.com on the portfolios page. And also talk about our monthly distributions for August, since it's that time. But just looking at the markets last week and for the year. The SP 500, represented by the fund VOO, is now up 10.16% for the year so far. The NASDAQ 100, represented by QQQ, is now up 12.26% for the year so far. Small cap value is kicking their butts. Representative fund VIOV is up 20.4%. 0% for the year so far. And funds like AVUV are up even more than that. Gold is now the big laggard for the year. Representative fund at Gil DM is down 6.13% for the year so far. But it was actually up a half a percent last month. Long-term treasury bonds represented by the fund VGLT are now down 3.25% for the year so far. REITs represented by the fund REET are up 15.12%. Preferred shares represented by the fund PFFE are up 2.93%. Commodities continue to be the big winner this year. Representative fund PDBC is up 32.53% for the year so far. And managed futures are managing to do quite well. Representative fund DBMF is now up 11.18% for the year so far. Now moving to these portfolios, first one's the all seasons. It's a reference portfolio. We keep around for reference in comparison with the next two, really. It is only 30% in stocks in a total stock market fund, VTI. It's 55% in intermediate and long-term treasury bonds. And the remaining 15% divided into golden commodities. It was down 0.89% for the month of July. It's up 3.57% year to date and up 27.68% since inception in July 2020. For the month of August, we'll be withdrawing $34 out of it, out of cash, which is left over from our rebalancing. Instead of 4% annualized rate, and that'll be $286 year to date and $2,350 since inception in July 2020. Now moving to more bread and butter kind of 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 20% in gold, GLDM. It is down 0.75% for the month of July. It's up 4.46% year to date, and up 66.66% since inception in July 2020. For the month of August, we are withdrawing $51 out of it again out of cash left over from the rebalancing last week, or rather a week and a half ago. That'll be $418 year to date and $3,281 since inception in July 2020. Next one's Golden Ratio. It 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 a managed futures fund, and 6% in cash, out of which we take our distributions. It was down 1.02% for the month of July. It's up 4.62% year to date, and up 61.53% since inception in July 2020. And for the month of August, we are taking $50 out of it, out of the money market fund. Set a 5% annualized rate, that'll be $405 year to date, and $3,208 since inception in July 2020. Let me just go back for a minute. I made a mistake on the golden butterfly because we are using a reverse glide path to modify that portfolio over the next 10 years. So it is actually 20.5% in VTI, 20.5% in VIOV, and 19% in the short-term treasury bond fund, SHY. Just for clarification, since our rebalancing. Moving to our next one, the Risk Parity Ultimate. It's kind of a kitchen sink portfolio, where we just put a whole lot of different things so people can check them out really. I'm not going to go through all 12 of these funds, but it was down 1.28% for the month of July. It's up 4.59% year to date and up 46.15% since inception in July 2020. For the month of August, we are withdrawing $53 out of it, out of cash from the rebalancing. That'll be $431 year to date and $3,667 since inception in July 2020. Moving to these experimental portfolios. These all involve leveraged funds. So don't try this at home.

Voices [48:12]

You can't handle the gambling problem.

Mostly Uncle Frank [48:15]

First one's the accelerated permanent portfolio. This one is 27.5% in a levered bond fund TMF, 25% in UPRO, that's a levered SP 500 fund, 25% in PFFV, a preferred shares fund, and 22.5% in gold. It is down 3.64% for the month of July. It's up 1.23% year to date, and up 24.95% since inception in July 2020. For the month of August, we are withdrawing $42 out of it. It's going to come out of UPRO as the current best performer. Let's set a 6% annualized rate. That'll be $350 year to date and $3,457 since inception in July 2020. Next one's the Aggressive 50-50. This is the least diversified and most levered of these portfolios and worst performer by far. It's been quite an experiment. It's one-third in a levered stock fund UPRO, one-third in TMF a levered bond fund, the remaining third in ballast divided into a preferred shares fund and an intermediate treasury bond fund. It was down 4.54% for the month of July. It's up 2.2% for the year so far, and up 0.46% since inception in July 2020. We'll be withdrawing $34 out of it, out of UPRO for the month of August, so at a 6% annualized rate. It'll be $275 year to date and $3,338 since inception in July 2020. Now moving to the next one, which is a year younger than the first six. This is the Levered Golden Ratio Portfolio. It is 35% in NTSX, that is a composite fund of the SP 500 and Treasury Bonds levered up 1.5 to 1. 15% in AVDV, that's an international small cap value fund. 20% in gold, GLDM, 10% in KMLM, that's a managed futures fund, 10% in TMF, it's a levered bond fund, and the remaining 10% divided into two levered funds that follow the Dow and the Utilities Index. It is down 0.73% for the month of July. It's up 4.77% year to date and up 25.58% since inception July 2021. For the month of August, we'll be withdrawing $56 out of it. It's going to come out of the Levered Dow Fund, UDOW. It's coming out at a 7% annualized rate. That'll be $427 year to date and $2,387 since Inception July 2021. And now moving to the last portfolio and youngest of the eight. This is the Opter Portfolio, one portfolio to rule them all. It is in fact ruling them all. This one is a return stack portfolio. So it's 16% in UPRO, the levered SP 500 fund, 24% in AVG, which is a worldwide value tilted fund, 24% in GOVZ, a Treasury Strips From the remaining 36% divided into Gold and Managed Futures. It is down 0.86% for the month of July. It's up 8.3% year-to-date, and up 39.73% since inception in July 2024. For the month of August, we'll be withdrawing $62 out of it instead of 6% annualized rate. It's going to come out of UPRO, the Levered SP 500 fund. That'll be $498 year to date and $1,393 since inception in July 2024. And with that, we have concluded our weekly and monthly portfolio reviews of the sample portfolios for the first episode in season seven of Risk Parity Radio.

How To Write In And Support

Mostly Uncle Frank [51:59]

But now I see our signal is beginning to fade. If you have comments or questions for me, please send them to Frank at RiskParityRadio.com. Then email us frank at riskparty radio.com. Or you can go to the website www.riskparodyradio.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 and give some stars a follow, a review. That would be great. Okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Purdy Radio. Signing off.