Welcome And Listener Resources

Voices [0:10]

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, thanks. 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. Who top men.

Mostly Uncle Frank [1:17]

And you can find those on the episode guide page at www.riskparody radio.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.

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 [1:52]

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. Along with a host named after a hot dog.

Voices [2:10]

Light in the Frenches.

Mostly Uncle Frank [2:13]

But now onward, episode 543. Today on Risk Party Radio is time for our weekly portfolio reviews of the eight assembled portfolios you can find at www.riskparty radio.com on the portfolios page.

Voices [2:28]

Inconceivable.

Mostly Uncle Frank [2:30]

But before we get to that.

Voices [2:32]

I'm intrigued by this. I was saying email.

Investor Levels And What To Read

Mostly Uncle Frank [2:38]

And first off. First off, we have an email from Michael. And Michael Wright.

Mostly Queen Mary [2:48]

Hello, Mr. Vasquez. Great fan of your podcast and all your participation on the Choose a Five podcast as well.

Voices [2:55]

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

Mostly Queen Mary [3:01]

I was wondering if you can refer me to an episode, or perhaps if you have it on hand, of financial books you'd recommend. The target audience of the books is me and my wife who are relatively starting out on this journey and would like more insight into the journey ahead. We are in our late 30s with a young family. Any suggestions would be greatly appreciated. Thank you again for all you do.

Mostly Uncle Frank [3:41]

There's just too many of them out there these days. And I think you really need to read the right book for where you are in your financial journey and what your life looks like. In your case, being in your 30s with a young family and not being some single guy in their 20s or some retiree in their 50s.

Voices [4:02]

Death stocks you at every turn.

Mostly Uncle Frank [4:06]

I tend to classify investors into four levels, just for convenience. But at level one, which is about half of all Americans, you are struggling with budgeting issues. You're not making more than you spend, or not significantly more than you spend, and therefore you have trouble investing. And those sorts of people need basic budgeting books. At level two, you have enough money to invest, but you really don't know much about investing other than what you've gleaned from the financial media and popular sources like that. Which tends to lead to some kind of misimpression that investing is a kind of game because financial media presents investing like it's some kind of a sport or competition. So level two investors tend to think that there are quote investing secrets or magic buttons, or if they find the right shiny object, that's how you invest, and that you're supposed to be monitoring the economic conditions all the time and moving and shaking and doing things, and they think financial advisors do that. So they tend to jump from investment to investment and get involved in all kinds of marketing schemes. Level two is the level that most financial media and most financial advisors in their marketing are most directed at.

Voices [5:32]

Do you have life insurance, Phil? Because if you do, you could always use a little more, right? I mean, who couldn't?

Mostly Uncle Frank [5:39]

Now, level three investor is somebody like a boglehead. And these are the people who have recognized that investing is not a game. There are no magic buttons or shiny objects, and all you really need to do is focus on minimizing the cost of your investing and focus on investing in basic index funds for the most part and classes of investments outside of that. They are most fixated on accumulating as much money as possible, and generally over a long period of time. And they tend to solve every financial problem by just accumulating more money or spending less money, or some combination thereof.

Voices [6:37]

Hey, what's lift? Well, poly stuff that might bring another quick four minutes on the open market.

Mostly Uncle Frank [6:45]

And then when you get to level four, you are talking about people that understand investing principles and then are applying principles to solve particular financial goals.

Voices [6:58]

My father says that you have been my friend. You came back for me. Why would you do this? Because the needs of the one outweigh the needs of the many.

Mostly Uncle Frank [7:16]

So each level actually has a different set of books or sources that are going to be relevant to them. But because we're essentially talking about how to books, and we live in an era of artificial intelligence, it generally is not efficient to go look for a list of books, get a stack of books, and then start reading them. What is more efficient for you to do is get that list of books and then go to your favorite chat bot and start asking for summaries of those books, and then use those summaries to tell you which ones you should be reading. Because you'll learn a lot more, a lot quicker that way. And frankly, most of what is in these personal finance books is very repetitive and it's very duplicative. But you also need to be very careful about what you consume in this area because a lot of books out there are really just disguised marketing.

Voices [8:12]

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

Mostly Uncle Frank [8:19]

And so a book with good intentions will be trying to get a level one investor to level three. And I'm assuming you're somewhere in between levels one and three, because most people are. Basically, they're teaching people to learn how to budget, then learn how to invest, and then learn how to do it efficiently so they're not wasting their money chasing a lot of things. What you'll see though in a lot of material that is put out by people who are trying to make money off of something is people who want you to go only from level one to level two and then stop at their shiny objects, magic investing buttons or financial advisory services. They want you to buy something essentially.

Voices [9:00]

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

Mostly Uncle Frank [9:03]

So Dave Ramsey's system is like that. He's very good with level one investors, just getting people to save money and have enough money to invest because those are the people he's generally talking to. But he doesn't ever want you to get to level three because his business model says what we want to do is get these people in a situation where they have enough money to invest, and then he will refer them out to his stable of financial advisors who pay him kickbacks, and those people will tend to put you in high-priced products.

Voices [9:36]

Sitting out there waiting to give you their money, are you gonna take it?

Mostly Uncle Frank [9:40]

And so his business model is just based on getting people from level one to level two. There are a lot of things out there like that. If you run into something called the power of zero, if you run into people who are touting infinite banking with insurance products, a lot of these types of authors are really trying to get you out of level one, get some money in your hand, and then give it to them to buy a certain product or a certain system.

Voices [10:10]

Always be closing. Always be closing.

Mostly Uncle Frank [10:16]

And you really want to avoid that sort of thing, because there are plenty other ways to get you out of level one. Your goal should be get out of level one, spend as little time in level two as possible, and get to level three, and then worry about level four later, if at all.

Using AI To Screen Finance Books

Mostly Uncle Frank [10:33]

So I went to my favorite AI bot and asked a very simple question, which is what are the most popular personal finance books written in the past 10 years? Figuring it would give a good selection. And it did. I'll go through these and tell you what I think of them. The first one it mentioned was The Psychology of Money by Morgan Housel. And that is not about nuts and bolts, but about how we make financial decisions. And that is a very good book to read. I would recommend that, but it's not going to give you nuts and bolts information. It's going to get you more psychological mindset kind of information and framing there. The next one mentioned is The Simple Path to Wealth by J.L. Collins. And that is the basic standard of how to get from level one to level three, hopefully skipping level two, which is basically spend less than you earn, save the rest, put it in index funds, and you'll probably work out okay in the long run. That is directed at somebody in their 20s who is just starting out. He wrote it for his daughter. So it's very simple. It's overly simple once you get out of your 20s and you're thinking about children and family and when you get to retirement because its solution stops at just keep accumulating money and spend less than you have. Which is a fine solution and always works, but it's not ultimately the best solution for maximizing your well-being because it's too focused on just accumulating more money. But it's written for somebody in their 20s. The next one mentioned here is Die With Zero by Bill Perkins, which is kind of on the opposite end of that, which is recommending that you don't fixate on just continuing to accumulate money over and over again, but also recognize that at certain times of your life you want to spend money on certain things, and you need to be intentional about that. And that really comes into play when you're talking about somebody with children and deciding how they want their life to look there.

Voices [12:33]

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

Mostly Uncle Frank [12:38]

The drawbacks of that book is it is written by somebody who is really excessively wealthy, so a lot of it does not hit very well. And with both that book and The Simple Path to Wealth, you could probably summarize everything they have to say in 50 pages or less. Those are really good books just to go get a summary of, frankly. Next one on the list is Just Keep Buying by Nick Majulie. And that's also a very good book talking about the why it works. And what's nice about Majulie's book is it doesn't get too dogmatic like The Simple Path to Wealth does about buy this index fund from Vanguard. It's more like, no, just buy some index funds and get on it. It's not that hard, and you don't need a lot of dogma about which particular fund to buy, because these days there are many, many different investments or fund families or funds that you can buy. I would just stick with ETFs as much as you can. Because another thing you need to know about these books is that anything written before about 2020 is going to be obsolete in some way, including things like the Simple Path to Wealth, because they're typically talking about investing in mutual funds, and they're typically talking about a world where we had fees for making trades and we don't have that anymore. So the mechanics of things have changed. We've essentially gone from a BlackBerry world to a smartphone world, and you do need to be cognizant of that, that anything written before about 2020 is going to have obsolete information in it. Next two books on this list are Get Good With Money by Tiffany the Budget Nista Alice and Brooke Millennia by Aaron Lowry. Now, those are both books that are typically directed more at people in their 20s. People who are just starting out and are on that level one and need to figure that stuff out first. I would describe those as really more level one books. But they're both very good and they both are written in a style that is much more attractive to people in their 20s and 30s. That's another thing you should be aware of. Look at who the author is of the book. If they are over 50, it may be kind of a lecture kind of presentation.

Voices [15:02]

Bueller. Bueller? Bueller? Um, he's sick.

Mostly Uncle Frank [15:11]

If they are younger, it generally is more appealing to younger people. My children liked Set for Life by Scott Trench, who's still very young and was even younger when he wrote the book. But that is all about getting started in your 20s and being really gung-ho and focused about getting to financial independence as quickly as possible. That book may not be that attractive to you anymore. It would have been attractive to you a few years ago, but I'd read it anyway. It does go through things like house hacking that are more appealing to people who are single in their 20s and can essentially rent space in their houses to their friends.

Money Conversations For Couples

Mostly Uncle Frank [15:48]

But now here's the problem with pretty much all of the books I just mentioned. They're basically aimed at an individual making individual decisions for their individual situation. That's not where you are in life. You have a wife, you have a small family, it's growing. I can tell you that if you go and get a how-to book and your wife is not on board with whatever you're thinking or planning, or it seems like you're going too fast or off in a different direction that she's not there with, this could backfire, actually. And so what I think you also need to read, if you can read those books that I just mentioned, or books like that, is something that is about money for couples and families. So I also searched for what are good books about budgeting and basic investing for people in their 30s starting a family. And AI brought me back a bunch of books, a bunch of which I'm not familiar with, but I think some of which are useful. There is the book Smart Couples Finish Rich. That is by David Bach, who wrote The Automatic Millionaire and the Latte Factor. And so that is a decent book. It is probably gonna have obsolete stuff in it, but it does focus on talking about how couples work together. So I that's a decent book. I would probably go get summaries of it first before deciding whether or not not to read that, which is probably what I would do with all of these. The next one is called The Family Investor: How Young Couples and Families Can Become Wealthy. I think that is also kind of a basic book. Again, that's something to get summarized. It's not something to go off and get. There's Money Management 101 for Couples, a practical guide to manage money as a family. You can check that one out as well. The one that I found most attractive on this list was actually a recent one written by Ramit Setti. It's called Money for Couples. No More Stress, No More Fights, just a 10-step plan to create your rich life together. He has a podcast now that I think is called Money for Couples these days. You can look it up. That is a very useful podcast for you to be listening to at this point in time. And I will tell you that you're more likely to get your wife to want to listen to that kind of podcast than most of the financial podcasts you may listen to because he is basically working with couples and they have all kinds of problems and they're on all kinds of different levels. A lot of them are on level one or level two. Occasionally he gets people that have just overaccumulated and can't spend. But there's a big variety of people there, and it's much easier to see your own problems if you listen to other people's problems because you'll quickly spot where people are screwing up or they're doing something that is not helpful for their situation. So I'd probably definitely get that book, Money for Couples, and check that out because maybe you can use that to help plan with your spouse. Other ones on this list, Financially Ever After, Our Money, Our Future, The Couple's Guide to Financial Compatibility. I'm sure all of these have some value, but I'm sure they're all going to be duplicative. What might be actually more useful is if you go get John Gottman's book called Eight Dates, which is about marriage. He's a preeminent marriage therapist. And there are a couple of chapters in that book that are specifically about finances. And I would definitely go get that and do the chapters on finances. It's basically you and your spouse read the thing. It's about values mostly. What are we trying to do? What do we want to spend money on? Because that's really where you are in life. How much money are you going to spend on your kids, their education? How much do we need to save? When do we think we want to retire? All of those sorts of things are things you need to talk about with your spouse because your strategies, your financial strategies, are going to depend on where your values are and then how you're going to live those out in intentional ways.

Voices [20:05]

That is the straight stuff, oh funk master.

Mostly Uncle Frank [20:09]

And then finally, if you are curious about what level four books look like and sound like, I talked about those in episode 477. And those are books that are typically written by people who have managed money at an institutional level, even if they're writing for an individual audience, and they bring that kind of knowledge to the table, and they are really focused on the finances and not talking about the emotions and the relationships like all these other books are talking about. And I should mention that I did mention a couple other books in episode 540 recently about information for teens. But my basic advice on the process for this is the same. I gave you a lot of books. I'm not expecting you to go out and read those books or get those books. What makes a whole lot more sense is to go to your favorite chat bots, get summaries of those books, say, give me a general summary, then give me a chapter by chapter summary. And if you're like me, you're going to go over to Google Notebook LM and then make slideshows out of that. So you don't even have to deal with that or make videos out of it. So it'll explain it to you that way. But that is a much more efficient way of learning about this stuff than actually reading the books first. Do the summaries first, get the information first, then decide whether it's worth your time to read the book or not. Now, most of the podcast episodes on this podcast are directed at people that are level three or level four in their investing because they've already accumulated enough money to retire close to it, so they don't need help at levels one or two for the most part. I did make one episode, episode 208, that is specifically directed at beginning investors, with a Wizard of Oz theme that you can go back and check out. But a lot of people liked that, the way it was presented.

Voices [21:58]

Oh

Mostly Uncle Frank [22:34]

So hopefully all that helps. I'm not gonna put all these books in the show notes, but there is transcripts that you can get all of the details from if you go to the website at www.riskpartyware.com. Go to the podcast page, pull up this podcast or any other podcast. There is a full transcript there, and you can get all the details out of that.

Voices [22:58]

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

Mostly Uncle Frank [23:02]

And you can also search the podcast and the transcripts for more books and various and sundry other things.

Voices [23:09]

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

Mostly Uncle Frank [23:12]

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

Voices [23:24]

We're doing second off.

The Easy Chair Mystery Solved

Mostly Uncle Frank [23:32]

Second off, we have an email from Matt.

Voices [23:36]

What does Matt Damon say on that Bitcoin commercial? Fortune favors the brave!

Mostly Uncle Frank [23:40]

And Matt Wright?

Mostly Queen Mary [23:42]

Hi, Uncle Frank and Queen Mary of the Casa. Thank you for your data-driven and decidedly uncommercial podcast. In an era where every podcast seems to feature more and more advertisements, I respect that your show simply raises money for worthy charities. I am a former academic and librarian who has switched into trucking in my mid-40s as a way of rapidly paying off those academic loans and investing for retirement.

Voices [24:26]

Yeah, we definitely got the front door, good buddy. It was a dark of the moon on the 6th of June in the Kinworth pulling loaves. Cab over Pete with a reefer on and a Jimmy hullin hoves. We is heading for bear on I 10, about a mile out of Shaky Town. I says, Pig Pen, this here's a rubber duck, and I'm about to put the hammer down.

Mostly Queen Mary [25:04]

In a few years, I have made remarkable progress towards my financial goals and having time freedom. I have also been able to enjoy some great travel experiences along the way, both on and off the truck. It also allows me to test run such a portfolio for when I move out of my accumulation phase. Your data and discussions have been very helpful along the way. My burning question is this Do you really broadcast from the comfort of your easy chair? All the best, Matt.

Voices [26:17]

Uh, we think you're like cool. Yeah. Especially that part about giving dudes the chair. The chair, the chair.

Mostly Uncle Frank [26:25]

Well, there's an easy answer to that question. And the answer is Yes! Yes, I broadcast from a classic easy chair. I took a picture of it with my microphone and computer just now, and we'll put it in the show notes. You can also see me sitting in it in many of the video podcasts I've done for other people, the last one being the catching up to Fi podcast about bonds. But it is a standard wingback chair that's green with a pattern in it. It is classic.

Voices [27:05]

It's gold, Jerry. Gold.

Mostly Uncle Frank [27:07]

The only advanced feature that these chairs have, and we have two of them, is that it's a recliner. So when I'm feeling really easy, I can recline.

Voices [27:18]

Well, you haven't got the knack of being idly rich. You say you should do like me, just snooze and dream. Dream and snooze. The pleasures are unlimited.

Mostly Uncle Frank [27:27]

It also sits next to a little gas fireplace that I can keep my Tootsies warm at during the winter time.

Voices [27:36]

I'd say in a given week, I probably only do about 15 minutes of real actual work.

Mostly Uncle Frank [27:43]

But that's probably enough about me. I do find it interesting your experience of somebody who has taken up trucking, which is much different than what you were doing before in your mid-40s. But I do find that a lot of people who like to listen to this podcast tend to be independent thinkers, and people who have just decided at some point or another that they're going to take their life into their own hands and perhaps do something different or do something that is not what other people would have recommended or would have done.

Voices [28:21]

So we crashed the gate doing ninety-eight.

Mostly Uncle Frank [28:23]

I says, let them truckers roll 10-4. So I'm glad to hear you have done that, and that you have not succumbed to foolish consistencies, which often tell us that we are supposed to do what we've always been doing or what we had planned to do when we were 18 or 20 years old. Which doesn't make a whole lot of sense now, does it?

Voices [28:42]

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

Mostly Uncle Frank [28:45]

So I'm glad you're enjoying the podcast, have found it useful, and are making remarkable progress towards your financial goals, as you have stated.

Voices [28:54]

The best, Jerry. The best.

Mostly Uncle Frank [28:57]

We hope to continue to serve you in the future, and thank you for your email.

EDV Vs TLT And Bond Duration

Mostly Uncle Frank [29:34]

Last of Last of We have an email from Ron.

Voices [29:39]

All these shenanigans take place in the hilarious new Hollywood movie called Bedtime for Bonzo, starring Ronald Regan, Diana Lynn, and Bonzo, that amazing gym.

Mostly Uncle Frank [29:50]

And Ron writes.

Mostly Queen Mary [29:52]

Frank, thank you for all the financial education you put forth on the podcast. I discovered your podcast two to three years ago and have listened to every episode, some more than once.

Voices [30:04]

The very sick man.

Mostly Queen Mary [30:06]

Somehow I missed until episode 494 that a general bond fund such as BND is a poor diversifier to the equity portion of a portfolio.

Voices [30:17]

That's true.

Mostly Queen Mary [30:18]

I am still in my accumulation phase, so this hasn't had much of an impact.

Voices [30:23]

No more fun, Solo.

Mostly Queen Mary [30:25]

Approximately a year ago, I took the advice you gave Mindy on bigger pockets about setting up a risk parity portfolio with some money that I don't have a specific short-term need for. I used it to practice managing and becoming more comfortable with the portfolio in anticipation of one day transitioning once I hit my withdrawal phase.

Voices [30:44]

That's what I'm talking about.

Mostly Queen Mary [30:46]

In looking into various treasury funds, I came across Vanguard EDV. It shows slightly less correlation with equities than VGLT, or specific to the golden butterfly TLT and a lower ER in regard to TLT. Would it be worthwhile to change TLT to EDV and the Golden Butterfly? Would EDV exclusively be a reasonable bond fund to begin diversifying into once I near my withdrawal phase? My best to you and Mary, Ron. And then the fun began.

Mostly Uncle Frank [31:22]

Well, I'm also glad you were enjoying the podcast, Ron. And that you found that bigger pockets episode with Mindy, where we set up a sample risk parity style portfolio. I think a lot of people liked that, and I learned something from that, that actually setting up the portfolio and running a test drive is very attractive to a lot of people, and it's a good learning device. And honestly, there's no reason anybody can't do that these days, because now that we're in the 2020s, we have no fee trading and fractional shares. So you can go set up a small account at Fidelity for $500 or $1,000 or $10,000, some small amount of money, and can create portfolios because you can invest in a fund for as little as a dollar without paying any fees. That was the whole way I was able to set up the sample portfolios to begin with.

Voices [32:13]

That's the fact, Jack! That's the fact, Jack.

Mostly Uncle Frank [32:17]

Now, getting to your specific question. So EDV is in a class of treasury bond funds with a longer duration than standard long-term bond funds. Now, what is duration? Duration is the sensitivity of a bond or a bond fund to interest rates. So a bond fund that has a longer duration is more sensitive to when interest rates go up or down. So the interest rate on a long-term bond is around 5% or a little bit more right now. If it were to go up to 6%, then both TLT and EDV would fall in value. But since EDV has a duration that is about one and a half times as long as TLT, it's 25 versus 17 or something like that, its price would change about one and a half times what the TLT price would change. And the same thing is true if interest rates fall, which is what you're really interested in holding these things for, because in a recession, interest rates naturally fall, and the Fed reduces rates substantially often, like it did in 2008 and 2020, which makes them fall even further, which makes the bond fund rise in value just when you want it to rise in value, because chances are if we're in a recession, your stocks are also declining in value, and you want something like treasury bonds to be rising in value, which is really why you were holding them at all in one of these kind of portfolios, because we're not holding them for stability or income. And so that is also why we would not recommend BND. There's nothing wrong with BND per se, but it has a whole bunch of corporate bonds in it, and those are not as diversified from the stock market as treasury bonds. Treasury bonds are the most diversified bond or type of bond from the stock market. And in 100% of recessions going back to the 1950s, they have gone up in value whenever there's been a recession while the stocks have gone down in value. Then you sell the bonds, buy more stocks when they're low, sell high, buy low, lather, rinse, and repeat. Buy low, sell high. Trouble is, we haven't had a recession in a really long time. We had a mini one in 2020, but we really haven't had a big one since 2008. Even though historically you do get recessions about 15% of the time. So EDV is in a class of what they call treasury strips funds that have this longer duration. The other two funds that you'll see in there are G O V Z and Z R O Z, but all three of them are essentially doing similar things. The Vanguard formulation is a little different than the other two. Now, Vanguard and other providers, in fact, have different treasury bond funds of all different kinds of durations now. So TLT is what they would call a long-term bond. The Vanguard version of that is called VGLT. There are intermediate treasury bond funds like IEF, which is the older one, and Vanguard's version is VGIT. You get a short-term Vanguard fund. That's VGSH, which corresponds to SHY, which is an older version of the fund. But you have infinitely many choices now in terms of what funds you want, depending on what duration you want. And that's also another reason why you don't need to be buying these so-called total bond funds like BND anymore, because they never did hold all the bonds. They hold an arbitrary set of bonds, and you are better off buying fewer bonds and only buying the ones that you need or want, and not just buying some bond fund where you have to hold more of it to have the same effect. Because you really don't want to be holding 40% in bonds in a portfolio, somewhere between 15 and 30%. It's going to be better for most people. But if you are going to hold EDV instead of TLT or VGLT, remember that it essentially moves one and a half times as much, which means that you can have essentially the same effect in a portfolio by holding two-thirds as much of EDV as you were going to hold of TLT. So if you were going to hold 15% in TLT, the equivalent of that would be 10% in EDV as an allocation in the portfolio. In practice, this has the effect of adding a little bit of leverage to a portfolio, or at least that's the way it behaves. It does make the portfolio a little bit more volatile, but not so much if you do reduce the amount that you're actually allocating to it. If you were to simply allocate 20% to EDV instead of TLT, say in a golden butterfly kind of portfolio, that would be like having 30% in TLT in that kind of portfolio, which is probably bordering on too much. So if you wanted to go from 20% TLT, the corresponding amount would be about 13.5% in EDV to get a similar outcome overall in the long term, at least when it comes to recessions. And then you could allocate that 6.5% to something else. So yes, you can use that, and a lot of people do use that, or GOVZ or Z-R-O-Z in their risk parity style portfolios. Just make sure you understand the implications of that, and I would be running some back tests comparing the two in a portfolio just to see what the differences are. I'm glad you're enjoying the podcast. Enjoying a test portfolio.

Voices [37:59]

Science.

Mostly Uncle Frank [38:05]

Hopefully you'll find that process very useful. And thank you for your email.

Voices [38:11]

And now for something completely different.

Weekly Portfolio Performance Review

Mostly Uncle Frank [38:15]

And the something completely different we get to do now is our weekly portfolio reviews of the eight sample portfolios you can find at www.riskpartyrear.com on the portfolios page. Turning out to be a typical September, which means most things are down for the month, except for things like managed futures, which seem to thrive in this kind of environment. Anyway, just looking at the markets for the year so far. The SP 500, represented by VOO, is now up 14.04% for the year so far. The NASDAQ represented by QQQ is now up 21.6% for the year so far. Got a big boost, I think, from Meta or Facebook when it released this new AI agent thing called Muse.

Voices [39:04]

Alive. It's alive! It's a live.

Mostly Uncle Frank [39:11]

I downloaded it, but it kind of scared me. I decided to make mine look like Plankton from SpongeBob and gave it the name Goober.

Voices [39:22]

You never had a chance to defeat me, fool! And you know why? Because you cheated? No, not because I cheated, because I'm an evil genius.

Mostly Uncle Frank [39:32]

But I'm not sure I'm gonna do anything with it. I certainly don't want to give it access to any of my passwords or my emails. It seems like a recipe for disaster at this point. I'll link to a funny video from Hannah Fry, the mathematician in England who does a lot of science-related YouTube videos now, about their experience with an agentic AI, which went off and did some things and then got hacked by another AI they created to go hack it and gave up all her passwords. So I'm not convinced that these agentic AIs are safe in terms of not being able to be hacked. I'll let somebody else be the guinea pig on that. Anyway, moving along. Small cap value represented by the fund VIOV is now up 16.02% for the year so far. It is not like the rise in interest rates. Gold represented by the fund GLDM is now down 0.56% for the year so far. Long-term treasury bonds continue to be the laggard representative fund VGLT is down 6.29% for the year so far. REITs haven't liked rising interest rates either. Representative fund REET is now up 6.62% for the year so far. Commodities aren't having any trouble. Representative fund PDBC continues to lead the way. Up 47.17% for the year so far. I'm an oil man. I travel from state to state searching for oil-rich fields which I can drill on. Preferred chairs represented by the fund. PFFB are now up 2.93% for the year so far. And managed futures are managing to have a very good September representative fund. DBMF is now up 16.83% for the year so far.

Voices [41:22]

Wow, is that very nice?

Mostly Uncle Frank [41:25]

Largely because it is short treasury bonds, and so it goes up whenever interest rates go up right now. But that's the way that thing works. It picks up on these trends that you read about in the news and runs with them as long as they run. Makes it a very good diversifier against stocks and bonds because it's long when they're long, but it is short when they are going down. How about that?

Voices [41:50]

Great success.

Mostly Uncle Frank [41:52]

Alright, moving to these portfolios. First one's the all seasons portfolio. This is a reference portfolio. It's only 30% in stocks, and a total stock market fund, 55% in intermediate and long-term treasury bonds, and the remaining 15% in gold and commodities. It's down 1.39% for the month of September. It's up 4.55% year to date and up 28.89% since inception in July 2020. Next one's Golden Butterfly. In our slightly modified version, it is 41% in stocks divided into a total stock market fund and a small cap value fund. 20% in long-term treasury bonds, 19% in short-term treasury bonds, and remaining 20% in gold, GLDM. It is down 2.27% for the month of September. It's up 4.99% year to date, and up 67.52% since inception July 2020. Next one's Golden Ratio. This one is 42% in stocks, divided into a large cap growth fund and a small cap value fund, 26% in the long-term treasury bonds, 16% in gold, 10% in managed futures, and 6% in cash and a money market fund. It's down 1.33% for the month of September. It's up 6.15% year to date and up 63.9% since inception in July 2020. Next one's the Risk Parity Ultimate. It's kind of a kitchen sink portfolio. I'm not going to go through all 12 of these funds, but it's down 1.81% for the month of September. It's up 5.94% year to date and up 48.04% since inception in July 2020. Now moving to these experimental portfolios. We perform hideous experiments here, so you don't have to.

Voices [43:38]

Well, you have a gambling problem.

Mostly Uncle Frank [43:41]

Don't try this at home. These all involve levered funds, and so these portfolios are very volatile. The first one is the accelerated permanent portfolio. This one is 27.5% in TMF, that's a levered bond fund. 25% in UPRO, that's a levered stock fund. 25% PFF V, a preferred shares fund, and 22.5% in gold. It's down 3.63% for the month of September. It's up 2.35% year to date, and up 26.34% since inception in July 2020. Next one's the aggressive 5050. This one is the least diversified and most levered of these portfolios and worst performer by far. It is one-third in leverage stock fund UPRO, one-third in leverage bond fund TMF, the remaining third in ballast in a preferred shares fund and an intermediate treasury bond fund. It's down 3.61% month to date for September. It's up 2.22% year to date, and up 0.47% since inception in July 2020. Next one's the levered golden ratio. This is a year younger than the first six. It is 35% in NTSX, that is a composite levered fund with the SP 500 and Treasury bonds in it. 15% in AVDV, that is an international small cap value fund. 20% in gold, GLDM, 10% in KMLM, that's a managed features fund. 10% in TMF, Levered Bond Fund, and the remaining 10% divided into UDOW and UTSL, which are levered funds that follow the Dow and a Utilities Index. It's down 2.74% for the month of September. It's up 5.93% year to date, and up 26.97% since inception in July 2021. Now moving to the last one, our newest one, the Opter Portfolio, one portfolio to rule them all. This is a return stacked portfolio, and it does happen to be ruling them all. It is 16% in UPRO, that's a levered SP 500 fund. 24% in AVGV, that is a worldwide value tilted fund. 24% in GOVZ, a Treasury Strips Fund and remaining 36% divided into Gold and Managed Futures. It's down 1.73% for the month of September. It's up 11.43% year to date, and up 43.77% since inception in July 2024. And that concludes our weekly portfolio reviews. And we'll be happy to be done with September. Most September seem to be negative, although occasionally you get one that's extremely positive, I think, like last year's was. You never know. That's why you're not jumping in and out of these portfolios and funds. But it is what it is.

Hiatus Note And How To Reach Us

Voices [46:32]

I don't think it means what you think it means.

Mostly Uncle Frank [46:35]

And now I see our signal is beginning to fade. Just a programming note. We'll be going on hiatus, so we can go on vacation and walk a little bit of the Camino in Spain over the next couple weeks. So you won't be hearing from us for about two and a half to three weeks. And if you're lonely for us in the meantime, I guess you'll just have to listen to some reruns. Since there's over five hundred of them now. In the meantime, if you have comments or questions for me, please send them to Frank at RiskPardyRear.com. Then email us Frank at RiskPurdyRear.com. Or you can go to the website www.riskperdirear.com. Put your message into the contact form and I'll get it that way. I will try to keep the website updated while we are gone, but I can't make any promises.

Voices [47:23]

Looks like you've been missing a lot of work lately. I wouldn't say I've been missing it, Bob.

Mostly Uncle Frank [47:28]

If you haven't had a chance to do it, please go to your favorite podcast provider and like subscribe and me some stars, a follow, a review. That would be great. Okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Party Radio. Signing off.

Voices [47:48]

Well, we rolled up Interstate 44 like a rocket sled on rails. We tore up all of our swindle sheets and left them setting on the scales. By the time we hit that shy town, them bears was getting smart. They brought up some reinforcements from the Illinois National Guard. There's armored cars and tanks and jeeps and rigs of every size. And the chicken coots was full of bears and choppers filled the skies. When we chopped the line, we went for broad with a thousand screaming truck and eleven long-haired friends of Jesus in the church microphone. Well, mercy's sakes, good buddy. So keep the buttons off your glass and the bears off your deal.

Mostly Queen Mary [49:00]

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.