Welcome, Resources, And Ground Rules

Voices [0:00]

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

Mostly Queen Mary [0:18]

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

Mostly Uncle Frank [0:37]

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. Ooh.

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. Zachos. 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.

Voices [1:44]

I'll give you the moon, right? 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]

Light in the French.

Mostly Uncle Frank [2:14]

But now onward, episode 439. 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 portfolio's page. And yes, it's still the year of the cowbell.

Voices [2:30]

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

Mostly Uncle Frank [2:35]

And the oil man.

Voices [2:37]

I'm an oil man. I travel from state to state searching for oil-rich fields which I can drill on. But when I'm not doing that, I'm on a countrywide quest for my second love, the perfect milkshake. Welcome to my show. But before we get to that, I'm intrigued by this. How do you say email?

Mostly Uncle Frank [3:16]

And first off.

Sample Portfolios Aren’t Recommendations

Mostly Uncle Frank [3:19]

First off, we have an email from Stephen. Steve and Stephen Wright.

Mostly Queen Mary [3:26]

Hi, Frank. Your podcast is great. I have learned a tremendous amount of information. I do have a question. You mentioned that as we build a risk parity portfolio, we should check the correlations of our asset classes and aim for negative correlation to stock market for our bonds and also negative or close to zero correlation to stock market for alternatives. Then we should back test the portfolios as far back as we can to make sure we have reasonable perpetual yearly distributions of at least 4% and preferably 5 to 6%. My question to you is Did you do your homework on the aggressive 50-50 portfolio before you started investing in it? And what were your back testing results?

Voices [4:12]

I'll get you a Steve if it's the last thing I'll do.

Mostly Uncle Frank [4:18]

Well, I'm glad you're enjoying the podcast.

Voices [4:21]

Johnny, what can you make out of this? This? Well, I can make a tap or a brooch or pterodacle because you can't.

Mostly Uncle Frank [4:29]

And this is kind of a funny question that I get a variation of often. And it says more about the person asking the question than it does about the answer I'm going to give you. There's an assumption in your question that the word sample in sample portfolios means recommended, and it doesn't. It doesn't at all.

Voices [4:54]

That's not how it works. That's not how any of this works.

Mostly Uncle Frank [4:58]

Those sample portfolios are there to model various ideas, some of which are good and useful ideas, and some of which are probably not that good or useful ideas, but by having samples of these things, we can see how they perform over time. And so, as you surmise, that aggressive 50-50 portfolio is not actually a risk parity style portfolio.

Voices [5:27]

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

Mostly Uncle Frank [5:31]

But before we talk about that specifically, let me just go through the sample portfolios to remind you why each one of them is there. Because I do mention this frequently, but it often goes over people's heads. So the first portfolio, the all seasons portfolio, is a reference portfolio. That is what Ray Dalio told Tony Robbins was a good representation of a classic risk parity style portfolio that it was simplified or dumbed down for the casual user, if you will. And this comes out of the book Money Master the Game, where Tony Robbins was interviewing Ray Dalio and a number of other people and asking for their recommendations on things. And this was the recommended portfolio then and there. And for a while, people referred to that as the risk parity portfolio or the all-weather portfolio, as if there was only one example of that. But the problem with it for retirement purposes is that it's too conservative and has too many bonds in it. So therefore, unless you're extremely conservative, it does not work really well as a retirement style portfolio. It can support a 4% withdrawal rate or less, but probably not much more than that in most circumstances. Now, the next two sample portfolios, the golden butterfly and golden ratio portfolios, are examples of a risk parity style portfolio that you might use as a retirement portfolio because they have higher safe withdrawal rates than the others. And those are the ones that are designed specifically for that purpose and can be modified to suit other purposes. Because as we've talked about ad nauseum here, there's a range of portfolios that fulfill this criteria. Go to the last episode if you want to hear about that. The fourth portfolio, the Risk Parity Ultimate Portfolio, is just a kitchen sink. And it is designed to hold a whole variety of assets that somebody might use, but is unlikely to be using all of those things together. So it probably isn't something that anybody would be wanting to use on its own either. We are subjecting that one to a 6% withdrawal rate just to make it interesting and to see whether it can withstand that. Now, the four other portfolios, the accelerated permanent portfolio, the aggressive 50-50, the leveraged golden ratio, and the opter portfolio are all experiments. They are not recommendations. They are experiments. We want to see what happens. So they all involve leveraged funds and they all involve excessively large withdrawal rates to see whether they can survive. Because as I've said many times before, there is no point in constructing a bunch of portfolios and then taking 3% out of them or something like that. That's a silly exercise. Because if you're doing that, your real strategy is just hoarding money and underspending. It has nothing to do much with the portfolio itself except for its terminal value.

Voices [8:47]

Oh boy, I'm rich! I'm wealthy! I'm independent! I'm socially secure! I'm rich! I'm rich! I'm rich.

Mostly Uncle Frank [8:57]

So I spent all of about two or three hours thinking about the first two experimental portfolios, the accelerated permanent portfolio and the aggressive 50-50. The accelerated permanent portfolio is just the permanent portfolio from Harry Brown, and what if we added some leverage to it? And we added the leverage to the stocks and bonds because that was the easiest way to do it. It wasn't constructed with a lot of thought. The aggressive 50-50 was constructed with even less thought. What that portfolio is, is an example of something that was very popular at the time we started this podcast, which was a portfolio that is called Hedge Fundy's Excellent Adventure that you will find written about on many websites and in many blog posts or bulletin boards. What that portfolio is or was, is a portfolio that is comprised completely of UPRO and TMF, the levered S P 500 fund and the levered long-term treasury bond fund. I didn't want to make something that aggressive because I want it to be comparable to the accelerated permanent portfolio so those two portfolios could be compared on a performance basis. But basically, the aggressive 5050 does not have any alternative investments in it. It is a simple stock bond portfolio at its base, just with leverage thrown in it. So it makes a very good alternative reference for something like the accelerated permanent portfolio or the other leveraged portfolios that are very well diversified or much more diversified than that one. And the real question we were asking at the beginning in 2020, when we just had the six portfolios, and the only two leveraged ones were the accelerated permanent portfolio and the aggressive 50-50, were which one of those two would do better? The one with more diversification, the one with gold in it, or the one that was simply a stock bond portfolio like everybody recommends. So we subjected both of them to a ridiculous withdrawal rate of 8% to start with. And if you watch those portfolios perform over time, that aggressive 50-50 portfolio was the best performer of all the portfolios until 2022. But because it's got so much leverage in it and it's not very well diversified, it has become the worst of the portfolios over time and is certainly a lot worse than the accelerated permanent portfolio that it's really to be compared against because they have similar amounts of leverage in them. So, yes, we did run some back tests on that to the extent we could at the time because we didn't have test folio then to run more complicated back tests on it, but you could run some things at portfolio visualizer with something like that and variations of that at portfolio charts. But mostly we just looked at if you go to the site Optimize Portfolios, there's a bunch of leverage portfolios in there, including this hedge fundy portfolio. And those were written up there already. So we didn't need to do another back test. The real question in our minds was what if you did take a 50-50 portfolio that somebody might typically use in retirement and put a bunch of leverage in it and take a bunch of money out of it, what would happen? And as we can see, the results are probably not something that somebody really wants to emulate. But that's how we learn things. We try things out on an experimental basis with small amounts of money to see what happens.

Voices [12:32]

Oh, I get it. Let me try.

Mostly Uncle Frank [12:35]

Now, just to complete the portfolio descriptions, the Levered Golden Ratio portfolio was set up in 2021. And the purpose of that portfolio was to build a portfolio around a composite fund like NTSX that many people have been asking about at the time. And NTSX is a composite fund that is the S P 500 and Treasury bonds in a 6040 mix levered up 1.5 to 1. And so we built around that and we also use that portfolio just to try out newer funds. Almost all the funds in that portfolio just have not been around that long. And we're kind of interested to see how they would perform. That portfolio is actually the most interesting because it started at a very inauspicious time, namely six months before you got to 2022. We also subjected that one to a 7% base withdrawal rate, which then was reduced to 5% when it fell below 80% of its initial value, but now is being withdrawn on at a 7% rate again. And again, the purpose of that is to see whether these things survive. Because although a lot of people fool around with leverage, it's usually in the context of accumulation portfolios. And I was curious to see what happens when you apply leverage to portfolios that you are withdrawing from, drawing down on.

Voices [14:06]

Poof.

Mostly Uncle Frank [14:07]

And then turning the last portfolio, the OPTRA portfolio, which we started in 2024, that is what is known as a return-stacked portfolio. And that is a style of investing promoted by people like Corey Hofstein and the people at Resolve Asset Management. And now they've come up with a series of composite funds to implement that. But that is another variation of a risk parity style portfolio adding leverage to it. And you would say that is the most refined version of a levered portfolio of that nature. Because while adding leverage to a portfolio is not a new idea, it is a new idea in terms of an ordinary person being able to implement a strategy like that without taking a lot of margin, but just using these levered funds that exist now but did not exist in the past. But again, it's just another experiment, and that's why it's called an experimental portfolio.

Voices [15:03]

That is the straight stuff, oh funk master.

Mostly Uncle Frank [15:07]

But just to complete your question about the back testing, yes, if you go to the Aggressive 5050 page, we updated the back test with one from Test Folio, which didn't exist at the time, but now does. And that is an interesting thing to look at today, because what you'll see is that if you go to 2020 and why this thing was popular at that time, it just looked like a great thing that you could just take a 50-50 stock bond portfolio and lever it up and everything would be wine and roses. But you can see what happened to it after that because it's not diversified enough. But if you cut that back test off at July 2020, you'll see what that looked like at the time. But I suppose that's what makes this podcast and this website much different from other podcasts or websites that you might be looking at, because we're not selling anything here. This is a retirement hobby for me. So when I have curiosities, I will go after them sometimes and put them up there just to see what's going to happen. Because I'm not trying to attract a big audience and I'm not trying to sell anything. So it doesn't matter if I put something up there that doesn't look very good. In fact, I think that's a much more honest way to present things and a more interesting way to present things.

Voices [16:27]

Does that make you different than most everybody else? The answer's yes.

Mostly Uncle Frank [16:32]

Because as we've seen from the performance of all these portfolios, the ones we would have expected to work well as retirement portfolios are drawdown portfolios, namely the golden butterfly and golden ratio, are in fact the ones that are working out the best. Except for the Optera, but that's only been around for a couple of years and hasn't experienced a big drawdown yet.

Voices [17:00]

One ring to rule them all. One ring to find them. One ring to bring them all. And in the darkness, I live in the land of world where the shadows lie.

Mostly Uncle Frank [17:21]

But that's the idea of the sample portfolio is to show things in real time. It's probably less interesting than it used to be before testfolio existed, because now you can do a lot of these tests on test folio and do all kinds of manipulations in terms of withdrawal rates and other things that you couldn't do when we started this podcast. But you should also recognize that the website has always been intended to be limited in scope. It's not that I'm lazy, it's that I just don't care. Because I wanted to start a podcast, not a website, and only realized that I needed a website after I had begun recording a podcast and then was trying to figure out where to put it and how to represent what I was talking about on the podcast so that somebody could actually look at it. Fortunately, I had a listener that fixed the darn thing because it was a lot uglier than it looks now in the past, and at least now it's very searchable on the podcast side. All the transcripts are there, and it is very useful as an adjunct to the podcast.

Voices [18:27]

That's what I'm talking about.

Mostly Uncle Frank [18:29]

But I understand that if you just looked at it without listening to the podcast, you may be confused as to why those portfolios are there and what we're trying to do with them.

Voices [18:40]

I had an idea like that once, a long time ago. Really? What was it, Tom? Well, all right. It was a jump to conclusions mat. You see, it would be this mat that you would put on the floor and would have different conclusions written on it that you could jump to.

Mostly Uncle Frank [19:07]

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

Voices [19:21]

Second

Safe Withdrawal Rates Versus Market Reality

Voices [19:22]

off.

Mostly Uncle Frank [19:23]

Second off, we have another email from Stephen. He was very prolific back in April. Gosh. And Stephen writes: Hi Frank.

Mostly Queen Mary [19:36]

Tons of value in your podcasts. Thank you. I have a question related to episode six data that you stated in regard to total stock market portfolio 8% after inflation total return with 4.3% safe withdrawal rate versus the golden ratio portfolio 6.9% after inflation total return with 5.9% safe withdrawal rate. By my rough calculations, somewhere between 10 and 15 years out from equal initial investments, the 4.3% withdrawal amount will be larger than the 5.9% withdrawal amount, and 4.3% amount will continuously get larger and larger than the 5.9% as we go from years 15 through 30s of retirement. Am I getting this correct? And how does this fit into your risk parity philosophy? If two people retired at 50 years old with the same portfolio total value, the golden ratio portfolio would produce more safe withdrawal money through age 65. And after 65, the total stock market portfolio would produce more safe withdrawal money, in addition to providing more for heirs, if that was part of the plan.

Voices [20:49]

You must unlearn what you have learned.

Mostly Uncle Frank [20:53]

Well, the issue here, Steve, is what you were trying to do with your portfolio because you've got multiple goals here. Just talking about your rough calculation, though, you would not do a calculation like that because basically you're doing some kind of straight line calculation on a spreadsheet as if these things return the same thing every year, and you can just count on that. In fact, that's not the way the markets work at all.

Voices [21:18]

Forget about it.

Mostly Uncle Frank [21:20]

And the whole reason for diversifying portfolios is to reduce the drawdowns, which then plays into the overall performance. Because in the worst case scenario, you are not getting a higher withdrawal rate out of the all-stock portfolio in 10 years. That's what you're worried about. In the worst case scenarios, if you're taking 4.3% out of it, you may be running out of money if you started in something like 1999.

Voices [21:49]

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

Mostly Uncle Frank [21:54]

Because over long periods of time, a hundred percent stock portfolio typically has a safe withdrawal rate of some. Around 3.3% if you go back the full hundred years. So the rough simulation you've done is actually not a useful simulation, at least if you're considering worst-case scenarios.

Voices [22:11]

You need somebody watching your back at all times.

Mostly Uncle Frank [22:15]

But the main part of your question has to do with what are your goals. Because the goal of holding one of these risk parity style portfolios, what we're trying to accomplish here, is to spend as much money as possible in a reasonable manner, starting today.

Voices [22:32]

Yes.

Mostly Uncle Frank [22:34]

Because we are thinking our best years of retirement are our first years of retirement, that first 10 or 15 or 20 years. That's when we want to be spending our money. We don't want to be sitting on our money when we're 60, not spending it and trying to build it up so that we can spend more money when we're 75.

Voices [22:54]

That's not an improvement.

Mostly Uncle Frank [22:56]

That would be counterproductive to what our actual goals are here.

Voices [23:00]

Forget about it.

Mostly Uncle Frank [23:02]

Because the difference in spending here is not trivial. The difference between spending 4% and 6% is not 1.7%. It's about 40%. That's the relative difference between the two plans there. And so spending 40% more earlier in your retirement than somebody else means you're going to be living a whole lot better life, most likely.

Voices [23:25]

The best, Jerry. The best.

Mostly Uncle Frank [23:27]

And in fact, the person spending the 4.3% is not doing a good job, if you will, with their retirement, unless, unless their goal is not to spend money. If their goal is to die with the most money possible, then you want to spend as little as possible.

Voices [23:47]

What's with you anyway? I can't help it. I'm a greedy slob. It's my hobby. Save me.

Mostly Uncle Frank [23:54]

And so I see you've injected a legacy goal at the end of your email. And this is where people are not very clear. You do need to decide what your goals are in retirement. Do you want to spend more? Do you want to do it earlier? Do you want to enjoy the best years of your life earlier? Because if you do, then you better put together a plan that allows you to do that, including a portfolio that allows you to do that. If your goal is not to spend money, if your goal is to die with as much money as you can, then you should keep your withdrawal rate low or hope you live long enough that you can spend more money later. And I know there are plans that imply that. You'll hear about often about somebody's RMD spending plan in retirement, which to me is a really stupid idea because it's basically having you spend more money as you age. When we know for a fact that most people tend to spend less money as they age, because as you age, you can't do as many things and you're not interested in doing as many things. So a plan based on hoarding money now in your 50s, so you can spend more money when you're 70 something is not actually a very attractive plan for most people, unless your real goal is to die with as much money as possible. And if that's your goal, then you should hold a Warren Buffett 9010 portfolio or something close to 100% equities, but then you should just keep your spending really low, below 3%, and then you'll be able to achieve that goal. So it's possible that one person should have a risk parity style portfolio in retirement, and another person should have a hundred percent stock portfolio in retirement. But in order to know whether those are appropriate, you need to know what their specific goals are. And if you're smart, you'll get very clear on what your goals are before you get started, and then act appropriately.

Voices [25:54]

You say you should do like me, just snooze and dream, dream and snooze. The pleasures are unlimited.

Mostly Uncle Frank [26:02]

Because what I see very frequently is people that say they have one goal but then behave as if they have a different goal. But if you're clear on your goals first, then you'll know what to do. Capish? Man's got to know his limitations. So hopefully that helps. Clarifies things a little bit. And thank you for your email.

Voices [26:26]

I wouldn't want a crazy dog if it may not want a genie. What do you know? A poil.

Performance Numbers With Withdrawals Included

Voices [26:46]

Last off.

Mostly Uncle Frank [26:49]

Last off of an email from Melanie.

Voices [26:52]

I'm going to marry Melanie. But you can't, not if you care for me. You don't love Melanie. She's like me, Scott. She's part of my blood, and we understand each other.

Mostly Uncle Frank [27:03]

And Melanie writes.

Mostly Queen Mary [27:06]

Greetings. I enjoy your podcast and was trying to dive deeper into the sample portfolios. I have a question regarding the performance measures. When you say it is up 63.37% since inception, is that the cumulative increase net of withdrawals? I couldn't reconcile the numbers. For example, Golden Butterfly, 63.37%, is at 12,244, while Risk Parity Ultimate, 41.23%, is at $10,416. I realize I must be missing something. Thank you for the great work you do.

Voices [27:45]

Why don't you say it, you call it? You're afraid to marry me. You'd rather live with that silly little fool who can't open a mouth except say yes, no, and raise a battle minimum ratchet life.

Mostly Uncle Frank [27:56]

Oh, are you gonna tell me I must Well, it seems like we're having a sample portfolio day. And sometimes I feel like maybe I should be more clear as to what's going on with the sample portfolios on the website. But on the other hand, I really don't want that job because the website is not designed as a standalone. The website is designed to support the podcast. And if you don't listen to the podcast, you're probably not gonna understand what's going on on the website.

Voices [28:25]

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

Mostly Uncle Frank [28:28]

Unless, of course, you read the transcripts on the website. But let's get to your question. So the performances are taken straight from the data at Fidelity where these portfolios are maintained. So the overall performance does include what's still in the portfolio, but also what's been taken out of the portfolio. Now I should say there's a modification because obviously the portfolio doesn't grow as much or as fast when you're taking money out of it than it would if you would have just left all the money in it to begin with. But that is accounted for in the statistics that Fidelity keeps. So in order to get an idea of what the total would be without the withdrawals, you can simply add the withdrawals back into the total of the portfolio. And that's why we keep track of the total amount withdrawn and it's there for each portfolio in the description on the website, and we update that every time we withdraw more money. So for that risk parity ultimate portfolio, we've currently withdrawn $3,722 out of it. It started at $10,000. So roughly 37% has been withdrawn, and you would add that back in to get an estimate of what it would look like if we had not taken out the withdrawals. So hopefully that clarifies that at least a little. I think what makes the most sense for most people these days, besides what I've told you in just terms of the tracking of the portfolios, if you are really want to investigate them more, is to go over to Testfolio, put the tickers in there, and you can run these back tests yourself and set different withdrawal rates because it allows you to do that too, and set the starting date for the back test. If you want to use the starting date for these portfolios, it's July 6th, 2020, for the first six. But that's going to be a more efficient way of comparing various portfolios than looking at this website. Now, particularly with that Risk Perry Ultimate portfolio, we have changed the allocations. Since it is a kitchen sink portfolio, we've added and subtracted various asset classes, including things like Bitcoin over time. But again, the purpose of that portfolio is not to serve as some kind of recommendation, but just to serve as examples of what happens when you put something like Bitcoin in a portfolio and what does that look like on a day-to-day, month-to-month, and year-to-year basis. So I'm glad you're enjoying the podcast. I hope you're still listening since this email did come in April. Please do send in other emails if you have questions. Remember, if you want to go to the front of the line, though, you have to donate to the charities. Even a small donation will do, however. And you can find that on the support page at www.riskparody.com. Hopefully that helps at least a little bit. And thank you for your email. And just to follow up on the emails today, since they were from newer listeners, if you're looking for more resources in a blog form, I would direct you to Risk Parity Chronicles, which is a blog hosted on Substack by one of our listeners, Justin. And you'll find a lot more analysis there, including discussions of particular funds and investments and comparisons between them. And he's also got a YouTube channel with some very useful tutorials, including one about how to do an asset swap to move assets between accounts to keep your taxes low. And then another one with a reference to a portfolio tracker, a free Google spreadsheet that if you're just looking for something to keep track of your portfolio that will update automatically, it's right there and he tells you how to use it. But that is kind of the zeitgeist of this little risk parity community, if you want to call it that. That we have people doing sophisticated work and we're doing it for free. So that's our business model.

Voices [32:29]

I got this inkling. Here's how it would work. You get a bunch of people around the world who are doing highly skilled work, but they're willing to do it for free. And volunteer their time 20, sometimes 30 hours a week. And then what they create, they give it away rather than sell it. It's gonna be huge. What's going on? Why are why are people doing this? Why are they why are these people, many of whom are technically sophisticated, highly skilled people who have jobs? Okay? They have jobs. They're working at jobs for pay, doing challenging doing sophisticated techno technological work. And yet, during their limited discretionary time, they do equally, if not more, technically sophisticated work, not for their employer, but for someone else for free.

Mostly Uncle Frank [33:23]

Because I believe this kind of information should be shared freely, as it was when I started out in early retirement personal finance community type stuff back in 2009. And I specifically reject the notion that people ought to be monetizing this and putting up courses and all sorts of other things for people to pay for or be having lots of ads, because what's the point of being financially independent if you're still essentially hustling for money, whether it's promoting personal finance material or something else? All that ends up doing in the long run is creating conflicts of interest.

Voices [34:15]

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

Mostly Uncle Frank [34:25]

And a lot of strange sounding ads and very fake sounding testimonials as well. And so we won't be doing any of that here.

Voices [34:53]

Not gonna do that. Wouldn't be present at this juncture. Enough of something completely different.

Market Snapshot Before Portfolio Reviews

Mostly Uncle Frank [35:00]

And the something completely different it's time for is our weekly portfolio reviews. Of the eight sample portfolios you can find at www.riskparty.com on the portfolios page. And it looks like it's being a typical September, which means most things are down except for managed futures, which seem to like September. But just looking at the markets last week and for the year, the SP 500 represented by VOO is now up 12.72% for the year so far. The NASDAQ 100, represented by QQQ, is up 16.64%. Small cap value continues to lead the equity pack. Representative fund VIOV is up 19.18% for the year so far. Gold has slipped back again. Representative fund GLDM is now up only 0.74% for the year so far. Long-term treasury bonds continue to be the laggard. Representative fund VGLT is down 4.07% for the year so far. Wreaths represented by the fund REET are up 9.44% for the year. Commodities continue to be the massive winner.

Voices [36:26]

I'm an oil man, but I also love milkshakes. And now I'm going to drink your milkshake. What do you think of that?

Mostly Uncle Frank [36:37]

Representative fund PDBC is up 49.36% for the year so far. Preferred shares are doing what preferred shares do. Representative fund PFFE is up 3.03% for the year so far. And managed futures are managing to get up to a high for the year so far. Representative fund DBMF is now 15.03% for the year.

Portfolio Results From Conservative To Levered

Mostly Uncle Frank [37:00]

Now moving to these portfolios. First one's the all seasons, this reference portfolio. It's only 30% in stocks. It's got 55% in intermediate and long-term treasury bonds. And remaining 15% in golden commodities. It is down 0.66% for the month of September. It's up 5.33% year to date, and up 29.84% since inception in July 2020. Now moving to these more standardized and recommended risk parity style portfolios, at least if you're using this as a retirement vehicle. First one's Golden Butterfly. This one is 41% in stocks in its current formulation. That's divided into a total stock market fund, VTI, and a small cap value fund. It's got 20% in long-term treasury bonds, 19% in short-term Treasury bonds, and the remaining 20% in gold. It is down 1.29% for the month of September. It's up 6.04% year to date, and up 69.19% since inception in July 2020. Next one's a 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 money market fund. It is down 1%, 1% flat for the month of September. It's up 6.51% year to date, and up 64.46% since inception in July 2020. Next one is the Risk Parity Ultimate, this kitchen sink portfolio. I'm not going to go through all 12 of these funds. It's down 1.2% for the month of September. It's up 6.59% year to date, and up 48.95% since inception in July 2020. Now moving to these experimental portfolios. A reminder that these are experiments, and you probably shouldn't try them at home.

Voices [39:02]

You can't handle the gambling problem.

Mostly Uncle Frank [39:05]

Because they have leveraged funds in it and are designed for all kinds of various and sundry purposes.

Voices [39:11]

Inconceivable! You keep using the horse.

Mostly Uncle Frank [39:17]

First one's the accelerated permanent portfolio. This one is 27.5% in a levered bond fund. TMF, 25% in UPRO, it's a leverage stock fund, 25% in PFFB, a preferred shares fund, and 22.5% in gold. It is down 2.45% for the month of September. It's up 3.61% year to date, and up 27.87% since inception in July 2020. Moving to the aggressive 50-50, which as we know is the most levered and least diversified of these portfolios and worst performer by far, is one-third in the leverage stock fund UPRO, one-third in levered bond fund TMF, and the remaining third in ballast in a preferred shares fund and an intermediate treasury bond fund. It is down 2.49% for the month of September. It's up 3.4% year to date, and up 1.64% since inception in July 2020. Moving to the next one, the levered golden ratios, it's a year younger than the first six. It is 35% in NTSX, that is that composite levered fund, that is the SP 500 and Treasury Bonds together. It's got 15% in AVDV, it's an international small cap value fund, 20% in gold, GLDM, 10% in KMLM, which is a managed futures fund, 10% in TMF, which is a levered bond fund, and the remaining 10% in UDOW and UTSL, which are levered Dow and Utilities Index Funds. It is down 1.09% for the month of September. It's up 7.72% year to date, and up 29.12% since inception in July 2021. And now moving to the last and newest one, the Octa Portfolio. One portfolio to rule them all.

Voices [41:06]

Not taking the hobbies to I isn't got.

Mostly Uncle Frank [41:15]

It's a levered stock fund. 24% in AVGV, that is a worldwide value tilted fund, both domestic and international funds. It's a fund of funds. It's got 24% in GOVZ, that's a Treasury Strips Fund, and then 36% in DBMF and GLDM divided equally there. It is down 0.97% for the month of September. It's up 12.29% year to date and up 44.88% since inception in July 2024. One of the more interesting experiments we're running with this particular portfolio is not rebalancing it very often. And we only rebalance it when the Fed changes direction on the interest rates, which last happened two years ago in September. At that time, the Fed lowered interest rates, which was the signal we use for rebalancing purposes. Now, if the Fed raises interest rates this week, we will have a rebalancing this week. And won't that be exciting? Because in fact these allocations have drifted pretty far off where they started, and it's very heavily tilted toward stocks now, with the bond allocation being just a little over half of what you would expect it to be if it were at the 24% allocation. But we'll see what happens.

OPTRA Drift, Rebalance Trigger, Wrap Up

Mostly Uncle Frank [42:37]

That's an interesting experiment.com. Then email us frank at riskpartyraer.com. Or you can go to the website www.riskperryRadio.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.

Voices [43:24]

Okay.

Mostly Uncle Frank [43:25]

Thank you once again for tuning in. This is Frank Vasquez with Risk Perry Radio. Signing off.