Welcome And Foundational Episodes

Voices [0:00]

A foolish consistency is the hobgoblin of little mind, 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 [0:36]

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 one, three, five, seven, and nine. 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.riskparty radio.com. Inconceivable! All thanks to our friend Luke, our volunteer in Quebec. Zach guy. 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 move, all 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 audience focused. And I must say, we do have the finest podcast audience available.

Voices [2:03]

Top drawer. Really top drawer.

Mostly Uncle Frank [2:07]

Along with a host named after a hot dog.

Voices [2:10]

Light in a friend.

Mostly Uncle Frank [2:13]

But now onward, episode 538. Which is attend to your email.

Voices [2:23]

Inconceivable!

Mostly Uncle Frank [2:26]

And so without further ado.

Voices [2:28]

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

Donor Email And Decumulation Goals

Mostly Uncle Frank [2:34]

First off, an email from David. And David Wright.

Mostly Queen Mary [2:47]

Dear Frank and Mary, please see the attached donation to the Father McKenna Center. I'm happy to donate to a charity helping hungry and homeless people anywhere in our country.

Voices [2:56]

Yes!

Mostly Queen Mary [2:58]

Earlier this year, I started exploring the portfolio rabbit hole, starting with portfolio charts, and then ultimately finding your podcast as the result of my local Choose FI group.

Voices [3:09]

Success is not a destination. It's a journey.

Mostly Queen Mary [3:15]

My journey to learning about portfolios started with J.L. Collins' Simple Path to Wealth, which we are currently using in accumulation, to William Bernstein's The Intelligent Asset Allocator, ultimately to risk parity style investing.

Voices [3:29]

You know what's fascinating. The same wind blows on us all, the same economy, the same opportunities, the same challenges. The wind of disaster, the wind of opportunity, the wind of change. It blows on everybody. What matters is not the wind, it's the set of your sale.

Mostly Queen Mary [3:51]

My interest in risk parity style portfolios is due to a couple of life circumstances. One, my 80-year-old parents have an AUM advisor who has them in a high-fee, actively managed portfolio with all kinds of crap in there, like active international bond funds, corporate bonds, muni bonds in an IRA, and several actively managed large cap blend funds.

Voices [4:29]

I drink your milkshake. I drink it up.

Mostly Queen Mary [4:38]

2. My sister-in-law's husband died suddenly and left her and her children with a large life insurance payout, and she knows nothing about investing. They require spending part of this money to maintain their current lifestyle. 3. My wife and I, both 38, are Bon Jovi Fi, so I'm preparing us for a better decumulation portfolio. All of this leads me to wanting to learn how to create a diversified portfolio for decumulation. The portfolio that I have settled on is 18% U.S. large cap growth, IWY, 15% U.S. small cap value, AVUV, 10% International Small Cap Value, 10% US P C insurance companies, KBWP, 15% Gold, GLDM, 15% Managed Futures, DBMF, 15% 25 plus year Treasury Strips, G O V Z, 2% Bitcoin, IBIT.

Voices [5:48]

Invention, my dear friend, is 93% perspiration, 6% electricity, 4% evaporation, and 2% butterscotch ripple. That's 105%. Any good?

Mostly Queen Mary [6:05]

My first question is: Should I recommend the same decumulation portfolio to my parents and my sister-in-law? Both have similar desires to draw as much from the portfolio as possible while keeping it sustainable. My parents probably have about a 15 to 20 year time horizon, and my sister-in-law has more like a 60-year time horizon. My second question is, if I believe this is a good decumulation portfolio for them, shouldn't I hold it myself and lever it up to similar risk characteristics as my current portfolio, 100% US total stock market? My third question is, I am trying to model the impact of leverage on the portfolio and testfolio. Is that the correct way of modeling it? You have a gambling problem. Suppose I have a gambling problem and settle on a leverage of 1.5x for our total portfolio while on our way to financial independence. We have roughly 50% of our portfolio in a taxable brokerage and 50% in retirement. That would mean our taxable brokerage would be levered up to 2.0x to get an overall 1.5x leverage. My last question is: given a higher leverage and just the taxable brokerage, should we reproduce the entire portfolio in the taxable account to decrease the likelihood of a margin call? It is less tax efficient, but I see two benefits. One, IBKR's portfolio margin account uses the portfolio itself to determine the maintenance margin requirement, so a more diversified portfolio would have a lower requirement. Two, the diversified portfolio would likely not drop as severely as if it was 100% equities with G O V Z, DBMF, and GLDM in the retirement accounts. Thanks for such a great show and informative podcast, David.

Mostly Uncle Frank [8:44]

As most of you know here, we don't have any sponsors on this program. We do have two charities we support. The Father McKenna Center for me, which supports hungry and homeless people in Washington, D.C. And full disclosure, I am the chairman of the board of that august institution. And for Mary, we support Fairfax Court Appointed Special Advocates, Fairfax Casa. But if you give to either one of the charities, you get to go to the front of the email line, as David has done here. If you're interested in doing that, I suggest you check out our support page at www.riskparty.com. But do make sure that you do mention it in your email so I can duly move you to the front of the line. And now getting to your email.

Stress Testing A Risk Parity Mix

Mostly Uncle Frank [9:24]

First, let's just talk about what you've constructed here. I mean, I think it looks pretty good to me, but just for the audience's benefit in going through how I would evaluate this, at least on a top-line evaluation. When I'm looking at something like this and I'm thinking about is this likely to have a high safe withdrawal rate, I generally the first thing I do is compare it to the guidelines that we've set up, and that is in that afford anything blueprint that Paula Pant created for us, and I will link to again in the show notes. And what that says is it gives some broad guidelines that a portfolio with a high safe withdrawal rate generally has between 40 something and 70 something percent in stocks and it divided into growth and value with at least half a value tilt to it. It's got between 15 and 30% in intermediate and long-term treasury bonds, and then it's got between 10 and 25% in alternatives that are uncorrelated with either stocks or bonds, and then it's got less than 10% in cash. Now, when I'm looking at something like this, you've got a couple things in here that essentially have an implied leverage to them. So your 2% in Bitcoin these days that behaves mostly like a levered NASDAQ fund. So I would treat that as if it behaved like 6% in QQQ or 6% in large cap growth. And then the other thing you have that it has some implied leverage to it is the Treasury Strips Fund, G-O-V-Z. That tends to behave as if it were one and a half times a long-term Treasury bond fund. So for the purpose of looking at macro allocations, I consider that to have, in this case, 7.5% extra. So instead of having a portfolio that is 100%, what you end up with here is a portfolio that I would view as 111%. 111.5%, because you add the 7.5% implied leverage for the GOVZ and the 4% implied leverage from the IBIT Bitcoin fund. And then you use that as the denominator when you're looking at what are the overall macro allocations for this portfolio. So in stock funds, it looks like you have 53% in straight stock funds, and then this 2% in Bitcoin, which behaves like another 6%. And so we'll call that a total of 59%. And 59% divided by 111 is an effective macro allocation of 53% in stocks, which is right in the middle of where you would want to be for something like this. We'll talk about the growth versus value in a minute. In terms of the bonds, that is behaving like 22.5% in the long-term treasury bond fund, that GOVZ you've got there. You divide that by 111, it comes out to 20.27% equivalent in long-term bond fund. And since that's well between 15 and 30, that's right in the ballpark as well. Then the other thing you have is 30% in alternatives and golden managed futures, divide that by 111, and it comes out to 27% in alternatives, which is slightly high, but it's just over 25%. It's very close to where you'd want to be. And since you don't have any cash in this portfolio, that sort of fills in there, if you will, for that. So just looking at the macro allocations of this portfolio, I would say, yeah, it looks pretty good in terms of something that's likely to have a high safe withdrawal rate. Now, if I were actually going to hold this, I'm going to go analyze it over at testfolio and portfolio charts and probably portfolio visualizer and anywhere else I can analyze it to get other metrics comparisons for this kind of portfolio. But I know a lot of our listeners do have portfolios like this, so it's very similar to something I've seen before. Now looking at the stock funds, you effectively have 24% in growth funds when you include the 18% in large cap growth and the 2% in Bitcoin on a leverage basis. And then you have 25% in small cap value. So those are nicely balanced out. Now you've also got 10% in KBWP, the property and casualty insurance companies. And that technically is a value tilt. And so technically you were overweighted towards value. However, that fund and that allocation does seem to perform like its own animal, if you will, almost like a complete alternative allocation. At least that's what I found. I've held property and casualties for over seven years now, I think. And I've been very happy with their diversification properties. However, they're not very exciting. So you should be aware of that. That for instance, in a year like this, they are underperforming the stock market. They're positive, but they're not performing, for instance, like small cap value, which is knocking out of the park this year. On the other hand, what you see oftentimes is when everything else is going down in value, the property and casualty companies are going up in value. It's that well diversified from the rest of the market. So I don't see any problem with holding what you're holding. You should just be aware that that makes your portfolio probably slightly more conservative than it would be if you were split between growth and value. But maybe that's what you'd like. And just a side note on KBWP, I've always wondered why there weren't more people who allocated specifically to that, because the reason I do it is I stole it from Warren Buffett. Berkshire Hathaway is at base, a lot of insurance companies. But there is somebody that does really recommend that and focuses on that now, and it is actually Steve Eisman, a big short fame. His character was played by Steve Corell in the movie.

Voices [15:26]

So let me get this straight. Is that right? Yeah. That's hilarious. Because only one thing counts in this life. Get them to sign on the line which is dotted.

Mostly Uncle Frank [15:53]

And he's got his own podcast now, and he talks about all sorts of things. It's actually a very interesting podcast. He's really sharp. There's a large signal to noise there. But one of the things he talks about a lot is a good allocation to help diversify you away from concentrations in big tech and in artificial intelligence now. He's saying one of the good things to hold would be KBWP or property and casualty insurance companies themselves. And he just had a podcast last week where he's just talking about all of these companies. These are like travelers and Chubb and all state. So I've been taking that as an imprimatur of approval for my practices of holding an allocation to that. Because I was especially happy with it in 2022 when it was up 10% for the year, and I was like, well, I'll just sell some of this. That and managed features that year kind of made my day. So I will link to his podcast in the show notes so you can check that out. But now getting to your specific questions. So I think this portfolio looks reasonably good to me on its face, although I have not done any detailed analysis of it. And you should do that if you haven't already.

Parents And Widow Planning Comes First

Mostly Uncle Frank [17:04]

So looking at your first question, should you recommend the same decumulation portfolio to your parents and your sister-in-law? And the answer to that is I really can't answer that because there are too many other factors at play here.

Voices [17:20]

Well, whenever I'm confused, I just check my underwear. It holds the answer to all the important questions.

Mostly Uncle Frank [17:28]

And what your parents and sister-in-law need most actually is basic planning before you get to portfolio construction, because I'm not sure exactly what their situations are and what they are trying to do. So with your 80-year-old parents, yes, I would get them away from their milkshake drinking AUM advisor that's got them in some very complicated nonsense.

Voices [17:55]

Milkshake, I drink it up every day, I drink it up.

Mostly Uncle Frank [18:00]

When I look at things like that, the first thing I think is this person would probably be better off with just the Vanguard Wellington fund in a lot of cases, or a combination of the Vanguard Wellington and Wellesley funds. Never mind getting to a risk parity style portfolio. They certainly really don't need any international bond funds or corporate bonds, and muni bonds, you would do not put it in an IRA. The reason you would hold those is to reduce taxes in a taxable account. So there's a lot of bad things going on there, and regardless of what they plan to do, getting out of some of that makes sense to me. But we would need to know a whole lot more about their actual situation before coming up with a series of recommendations. Because, for instance, one of the things we need to know is what kind of health they're in. Are they likely to live to age a hundred or are they likely to be gone in the next ten years? Because believe it or not, if they're likely to live to age a hundred, one of the things they should be considering is a simple annuity, a single premium, immediate annuity. Because something like that is going to just gush cash at those ages now. And so that might be something they'd be interested in if they think they are going to live well into their nineties, or at least one of them is going to live well into their nineties because you can buy that as a joint life product. But that would not be for their whole portfolio, it'd be for a small part of their portfolio, usually probably to cover whatever their expenses are beyond social security or whatever they just want to be spending every year. But then you also get to tax issues. We don't know how much they have in their IRAs, what their RMD situation is. All of that is going to play into however you restructure this. And then there's a question of, well, how much do they actually want to spend? And how much do they want to leave? And maybe they want to start giving you and any siblings you have some of this money now.

Voices [19:59]

Why? What have children ever done for me?

Mostly Uncle Frank [20:03]

So there's a whole lot of questions about just how much they're spending, what their goals are, their health, all of these basic planning issues before you even get to talking about portfolios. Then the next question with somebody like that is a very practical one is who is going to manage this for them? Because I'm assuming since somebody else has been managing it for them, they are really not capable of doing it themselves. I'm just making that as an assumption. And it's likely even if they're capable of doing it now, at some point in the near future, they're not going to be capable of doing it anymore. Now, I suppose your first reaction might be, well, maybe you can do it for them. And the answer to that is they probably don't want you to do it for them. In fact, they might be very resistant to you commenting on their finances at all. And if you want to hear more about that, go back and listen to episode 477, where we talked about another situation where somebody was dealing with a parent and trying to get them out of an expensive and bad situation, such as many of these parents find themselves in with these overly complicated portfolios with advisors that are charging them too much money.

Voices [21:18]

Drink, drink, drink, drink, your milkshake, drink, drink, I drink, drink, drink, drink, your milk shrink. I drink it up.

Mostly Uncle Frank [21:30]

So you would probably want to move them to another advisor. Hopefully somebody that charges a flat fee. But that is going to be another process to select that person. And obviously, they are really the ones retaining them, so they need to be comfortable with whomever you would choose. So there are your technical and practical obstacles to moving away from what they're doing right now. If it was just about a portfolio, yes, they could hold something like that, like you're suggesting there. I doubt people who are AD. Years old would want to hold any Bitcoin at all, and you wouldn't want to have to explain it to them either. So I'd probably just get rid of that part of that allocation. But allocating to the portfolio is actually the last thing you do after dealing with all of these technical planning and management issues that I just talked about. Now, you might have more luck with your sister-in-law, but there are the same issues there that the first and foremost issue is planning here, because this accumulated money or this life insurance policy money needs to be managed in the context of whatever else she has going on in terms of income and other things. And then the planning needs to occur since you've got children involved.

Voices [22:44]

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

Mostly Uncle Frank [22:48]

Her expenses are likely to peak when those children are in high school or in college if they're going to college. And so all of this needs to be planned out in a reasonable manner, especially since the amount being spent is likely to change over time. And some of that money may just need to be pulled out and reserved for a college education or something like that. So maybe that goes in a $529 or some other account. You can see this is a much different situation from somebody that was not dealing with children or anything other than just spending out of a portfolio. But even after you've got the plan in place, then somebody does also need to manage this unless she's capable of managing it on her own. And nothing you've told me suggests that at this point in time. So either you need to do it or you need to find somebody to do it. And hopefully it is a flat fee advisor who can help with both of the planning and setting this up, and somebody that you can work with as an advisor who is helping you and not just telling you what to do.

Voices [24:04]

Stop trying, you sniveling. Stop your nonsense.

Mostly Uncle Frank [24:08]

And yes, there are flat fee advisors who would take what you've suggested there and say, yeah, we can do something like that, and probably make some more suggestions for you. In fact, our friend Optimus Bill has such an advisor. I am Optimus Bill. But there are other ones out there, in fact, some of them listen to this podcast, believe it or not.

Voices [24:29]

Shirley, you can't be serious. I am serious. And don't call me Shirley.

Mostly Uncle Frank [24:33]

So I think probably the best thing you can do for her, unless you wanted to take all this on yourself, which I don't think I would suggest, unless you've got some experience on the planning side with the kids and everything, is to go find somebody that you can actually work with, and that will construct something like you've suggested there. Because yes, that can work.

Voices [24:55]

That is the straight stuff, oh funk master.

Mostly Uncle Frank [24:58]

Alright, getting to your situation.

Leverage Modeling And Margin Call Risk

Mostly Uncle Frank [25:01]

Talking about leverage, sounds like somebody's got a gambling problem here.

Voices [25:07]

You can't handle the gambling problem.

Mostly Uncle Frank [25:10]

So you say you and your wife are Bon Jovi5, which means you're halfway there, by the way, for those who don't get that reference. And that's going to come sooner than you think. So I don't think I would be going from some other kind of accumulation portfolio than the one you have to like a different accumulation portfolio and then to a retirement portfolio. I think I'd be thinking more in terms of how can I transition this to a retirement portfolio when we get there or as we get closer. At this point, I would at least tilt out of a hundred percent US total stock market to add some value tilted stuff because your biggest risk now is a dot-com style crash. And you know you're gonna want to do that anyway. Now you do need to be mindful of your tax situation. I'm not sure where you're holding all of this stuff, but to the extent you want to make changes, do it in your IRAs or places like that in the first instance. Now, if you are going to experiment with taking something like this and levering it up, I would do it on a small scale first. I wouldn't just jump right in a whole hog and do something like that.

Voices [26:41]

Change the polls from plus to minus and from minus to plus.

Mostly Uncle Frank [26:48]

So I would go and create kind of a test account or a test portfolio, put a relatively small amount in there and then lever it up and do whatever you're going to do with it.

Voices [27:00]

I alone succeeded in discovering the secret of bestowing life. Nay, even more, I myself became capable of bestowing animation upon lifeless matter.

Mostly Uncle Frank [27:16]

We do do something like that with our Roth IRAs, but our Roths are only about 7% of our total assets. So we're comfortable knowing that we're probably never going to be spending them and we can take a lot more risk in there. What our Roths look like because you can't take margin in a Roth account is something that looks akin to the Opter portfolio, but as a higher overall exposure to stocks and a lower all overall exposure to bonds in that portfolio. Go check out the Superman portfolio we talked about in episode 511. You can get in a lot of trouble with leverage, and I don't want to see people get into a lot of trouble.

Voices [28:33]

And the next thing you know, your son is playing for money in a pinchback suit. And listening to some big out-of-town Jasper, hearing him tell about horse race gambling. Not a wholesome trotten race, no, but a race where they sat down right on the horse. Like to see some stuck-up jockey boy sitting on Dan Patch, make your blood boil, well, I should say.

Mostly Uncle Frank [28:52]

Even though I know some of you out there have done 100% you pro for a decade and loved it.

Voices [29:00]

Winner winner, chicken dinner. Those words have been dancing around my head all night. Oh, it's Vegas lore. That phrase. It was a Chinese dealer of Binions who was first credited with the line. He would shout it every time he dealt Blackjack. That was over 40 years ago. And the words still catch. Winner winner chicken dinner. There it is. Winner winner chicken dinner.

Mostly Uncle Frank [29:27]

But we have a lot of gambling problems around here.

Voices [29:30]

I'd sell my soul for a donut. Well, that can be arranged. You're the devil? It's always the one you least suspect.

Mostly Uncle Frank [29:41]

No, I do see that you have run this in test folio at various leverage rates, and yes, the way you've done it is how you would typically model margin interest by taking a negative exposure to cash, essentially. What you should recognize from that is look at those drawdowns. Because as you go up past two times leverage, you're getting into 70%, 80% drawdowns in some of these portfolios, and that would break the bank. You would get a margin call if you were holding something with all that kind of leverage in it. So that's not something you would ever want to do.

Voices [30:19]

Forget about it.

Mostly Uncle Frank [30:20]

At least not on a margin basis.

Voices [30:22]

No more flying solo. You need somebody watching your back at all times.

Mostly Uncle Frank [30:28]

Now, even the one that's only levered up 1.5 to 1 that you're thinking about does have a 40% drawdown in there. Of course, that's over the past 64 years. And that should keep you away from a margin call or ever getting a margin call, but there's no guarantees there. Fortunately, if you're doing this at Interactive Brokers, it lets you take lots and lots of margin. And I think you are also correct that you do want to put either put the entire portfolio or at least a good part of the diversified parts of the portfolio into the taxable account for two reasons. As you say, it's less likely to be facing a big drawdown. Whereas if you just put all stocks in there and margin it up, then you would potentially be facing an 80% drawdown.

Voices [31:14]

That's not an improvement. Truck door strikes again.

Mostly Uncle Frank [31:20]

The other reason that you would want to put bonds or managed futures or something in there that is paying ordinary income is because then you can offset that against the margin interest. And that will make the margin interest tax deductible. So I would at least put some of those diversifiers, if not all of them, into the margin account if you're going to margin it up the way you suggest. So if you want to try this out, go right ahead, but don't do it with everything. I would take five or ten percent of your portfolio, put that into a margin account at Interactive Brokers, and then try it out with that, because you won't get hurt that way. I would also consider as an alternative to using some of the levered funds, such as UPRO, and there are other ones coming out, simply because then you avoid the possibility of a margin call, even though they're not as efficient in some ways. And you could even take a hybrid approach if you'd like to do that.

Voices [32:27]

It cuts whack.

Mostly Uncle Frank [32:40]

Hopefully this helps. You do need to be careful out there, and I hope you are able to help out your parents and your sister-in-law. Thank you once again for being a donor to the Father McKenna Center. And thank you for your email.

Voices [33:11]

Second off.

UK ETF Options For Growth And Value

Mostly Uncle Frank [33:13]

Second off with an email from Olavo.

Mostly Queen Mary [33:16]

No way.

Mostly Uncle Frank [33:18]

And Olavo rates?

Mostly Queen Mary [33:20]

Hi Frank. I'm from the UK and just found you. I've been watching all your videos. However, I have a question, and I suspect you will find lots of people in my situation.

Voices [33:30]

Hi, no to me, notam, notch, notch, notamin, sign them all.

Mostly Queen Mary [33:34]

I'm in the accumulation phase, but want to follow your approach of 50% on large cap growth and 50% small cap value, specifically examples like VUG and AVUV. The issue is that I can't find any platform to buy these funds in the UK. Do you have any suggestions for someone in my situation? I'm 50% away from my number. Thank you in advance. You have lots of followers from the UK.

Voices [34:02]

Oh, wicked! You're wicked, you're wicked. I nudge nudge. Are you not as good as a wink to a blind bite?

Mostly Uncle Frank [34:08]

Well, Olavo, I did not have a suggestion off the top of my head, but I did take the time to use Gemini to go get you one. These are actually very good questions to ask your favorite artificial intelligence chatbot because the number of funds is changing and is growing, particularly internationally. And I found it's just easier to go ahead and ask a chatbot. The prompt I put in for this one was for an investor in the United Kingdom, what are good low-cost choices for a large cap growth fund and a small cap value fund? And for the large cap growth, it came back with some Vanguard Russell 1000 US growth usits. So on the London Stock Exchange, that is VRGG or VRGU. One is in pounds and one is in dollars. And then there's also an Amundi fund that is ticker symbol MWOT. So you might want to check those out. They'll be similar to the fund IWY in the United States. Oh, it also gave me a Nasdaq 100 fund, which is EQQ. That is a higher expense ratio, but still reasonable for the United Kingdom. Now, going to small cap value.

Voices [35:29]

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

Mostly Uncle Frank [35:33]

The suggestions are USV, that's in pounds, or USSC. These are both USIS traded on the London Stock Exchange. The latter one is in US dollars. But even better than that, there is an Avantis Global Small Cap Value USIS available now. And Avantis has been rolling these out over the past year or two. And that is ticker symbol AVWS, which is probably gonna be your best bet here.

Voices [36:05]

Guess what? I got a fever, and the only prescription is more cowbell.

Mostly Uncle Frank [36:12]

So I would go check those out, but I would also get on your favorite chat bots and start asking more questions about these things because you may dig up some other ones. Then you do have to analyze what exactly is in these funds. But I'd be pretty confident in anything that is tied to an index or is a Vontus product or a DFA product, but I don't think DFA goes outside the US at this point in time. At least not that I'm aware of. So hopefully that helps. And thank you for your email.

Voices [36:43]

Your wife interested in uh photography, eh? Photographs, eh? He asked him knowingly. Photography, yeah? Yeah. Snap, snap, green, green, wink, wink, nudge, nudge, say no more. Holiday stamps. Could be could be taking on holiday, could be swimming costumes, nudge, snudge, candid, candid photography. No, I'm afraid we don't have a camera. Oh. Still. Hey, hey? Last off.

How Much Managed Futures Is Enough

Mostly Uncle Frank [37:13]

Last off, we have an email from Nick.

Voices [37:16]

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 get the joint atmosphere. Is that clear? I don't have to slip you my lip for a convincer.

Mostly Uncle Frank [37:29]

And Nick writes.

Mostly Queen Mary [37:31]

Hey Frank, do you think allocating 5% to DBMF is enough to make a meaningful difference in a decumulation portfolio alongside 10 to 15% gold? 7.5%? Or do you think 10% is really the minimum needed to make a meaningful difference? Thanks.

Voices [37:50]

Looks like I picked the wrong week, but I'm philometch.

Mostly Uncle Frank [37:54]

Well, the short answer is yes in this circumstance. That probably would be a useful allocation. Because I'm thinking more of what is the macro allocation here to alternatives. And you want that to be generally somewhere between 10 and 25%. So if you've already got 10 or 15% gold and you add 5% DBMF on that, I think that puts you squarely within what you want that macro allocation to be like. But I think you do want to analyze this as an entire portfolio. So I would construct the rest of the portfolio as well, and then start looking at, well, if I swap this 5% in and out, what effect does that have on the portfolio? I wouldn't expect it would have a large effect, but 5% is probably a meaningful effect when you combine it with an allocation to gold, like you suggest. So that was short and sweet.

Voices [38:46]

The fog is getting thicker. And Leon's getting larger.

Mostly Uncle Frank [38:53]

Hopefully that helps. And thank you for your email.

Voices [38:58]

I guess you could say things are getting pretty serious.

Listener Email And Subscribe Requests

Mostly Uncle Frank [39:01]

But now I see our signal is beginning to fade. If you have comments or questions for me, please send them to Frank at RiskPartyr.com. Email is frank at riskpartyware.com. Or you can go to the website www.riskpartyrador.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.

Voices [39:35]

Signing off the best.

Mostly Queen Mary [40:38]

The Risk Parody Radio Show is hosted by Frank Vasquez. The content provided is for entertainment and informational purposes only and does not constitute financial, investment, tax, or legal advice. Please consult with your own advisors before taking any actions based on any information you have heard here, making sure to take into account your own personal circumstances.