Episode 353: Our Annual Rebalancing Episode And Portfolio Reviews As Of July 19, 2024

In this episode we answer emails from Brian, JD and Andrew.   We discuss using leverage in portfolios (again!), gold ETFs and early retirement considerations and withdrawal strategies.  And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.Additional links:Yours Truly on the Forget About Money Podcast:  🎲 Risk Parity: The Secret to a 5% Safe Withdrawal Rate! | Frank Vasquez 🏆 (youtube.com)Ben Felix Video On Leverage:  Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)Optimized Portfolios Website:  Optimized Portfolio - Investing and Personal FinanceETF Database -- Gold ETFs:  Gold ETF List (etfdb.com)PHYS Fund Article:  Tax Information - Physical Gold Trust (sprott.com)Portfolio Charts Withdrawal Rates Calculator:  Withdrawal Rates – Portfolio ChartsPortfolio Charts Retirement Spending Calculator:  Retirement Spending – Portfolio ChartsMorningstar Report re Variable Withdrawal Strategies:  Six Retirement Withdrawal Strategies that Stretch Savings | MorningstarAmusing Unedited AI-bot Summary:Ready to rethink your investment strategy? Uncover the secrets of leveraging your portfolio from insights gleaned from industry titans like Ray Dalio and practical advice for everyday investors. We promise you'll walk away with a new perspective on the benefits and risks of using leverage, tips on incorporating leveraged ETFs into your own portfolio, and a treasure trove of resources including the Optimize Portfolios site and an enlightening video by Ben Felix. This episode is packed with knowledge that can transform how you approach your investments.But that's not all—we're spicing up this financial discussion with a revisit to one of the most memorable moments in film history. Relive the iconic scene between James Bond and Goldfinger, dissecting the thrilling exchange and the unforgettable line, "No, Mr. Bond, I expect you to die." We'll break down Bond’s daring attitude against Goldfinger’s ruthless intent, highlighting why this scene is etched in cinematic lore. A blend of financial wisdom and pop culture nostalgia, this episode promises to both inform and entertain. Tune in and join the conversation!Support the Show.

In this episode we answer emails from Phil, MyContactInfo, and Eric.  We discuss implementing factor investing and making portfolio adjustments in a risk-parity style portfolio, HECOMs and other considerations about reverse mortgages and buffered products, the fundamental problems with IUL that need to be accounted for before using it, and just how rich you probably need to be to be using insurance products as investments.  Hint:  You are not that rich.Links:Swedroe Factor Investing Book:  Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today by Andrew L. Berkin | GoodreadsLong View Podcast About HECOMs:  Don Graves and Wade Pfau: How - The Long View - Apple PodcastsAndy Panko Cautionary Video About IUL:  Beware of misleading Indexed Universal Life insurance ("IUL") illustrations (youtube.com)Andy Panko IUL Critique On Big Picture Retirement Podcast:  Unmasking the IUL Sales Pitch with Andy Panko (bigpictureretirement.com)Private Placement Life Insurance:  How Does Private Placement Life Insurance Work? - ValuePenguinAmusing Unedited AI-Bot Summary:Is your portfolio prepared for the next economic downturn? Join us on this episode of Risk Parity Radio as we tackle an intriguing email from Phil, a listener from Portugal contemplating a major portfolio overhaul. We dig deep into the nuances of factor investing, particularly momentum and profitability factors, and offer critical advice on the potential risks of reducing bond allocations in favor of equities. We emphasize the importance of leveraging financial analysis tools like Portfolio Charts and Portfolio Visualizer to make informed decisions, and stress the need for a balanced approach throughout both the accumulation and decumulation phases of investing.We also navigate the labyrinth of investment strategies and financial products, evaluating the pros and cons of dollar-cost averaging amidst market volatility, and scrutinize costly options like Home Equity Conversion Mortgages (HECMs) and Indexed Universal Life (IUL) insurance products. Highlighting the potential pitfalls of these profit-driven offerings, we advocate for well-diversified portfolios as the cornerstone of robust financial planning. Tune in to discover practical tips on managing taxable accounts, avoiding misleading insurance products, and achieving optimal portfolio performance, all while staying grounded in sound financial principles.Support the Show.

In this episode we answer emails from Robert, Jamie and Richard.  We discuss transitioning away from a Boglehead Three Fund portfolio due to its obsolete nature, a query about the DBMF prospectus and an early retirement with a 70/30/10 risk-parity style portfolio in the face of some spurious Sonia-like objections.Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterMerriman Best-In-Class ETF List:  Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)Morningstar Portfolio Analysis Of VTI:  VTI – Portfolio – Vanguard Total Stock Market ETF | MorningstarVXUS:  VXUS – Portfolio – Vanguard Total International Stock ETF | MorningstarAVDV:  AVDV – Portfolio – Avantis International Small Cap Val ETF | MorningstarAVES:  AVES – Portfolio – Avantis Emerging Markets Value ETF | MorningstarEarly Retirement Now Spreadsheet Toolbox:  An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement NowAmusing Unedited AI-bot Summary:What if your international and bond funds aren't providing the diversification you think they are? On this episode of Risk Parity Radio, we address Robert's inquiry about optimizing his family's portfolio during the accumulation phase. We'll dissect the limitations of total international funds when paired with a U.S. S&P 500 or total market fund, and why they may fail to deliver the diversification you seek. We'll also explore Robert's proactive strategy of reallocating bond investments into stock funds during market downturns and discuss the merits of increasing U.S. stock exposure while rethinking the necessity of international holdings.We'll further challenge the conventional wisdom of international versus domestic funds and introduce modern alternatives that can bring true diversification to your portfolio. Recommendations from the Merriman Foundation, such as AVDV and AVES, are highlighted for their potential to balance your investments by tilting towards small-cap and value stocks in international markets. Lastly, we dive deep into the complexities of fund disclosures and benchmarks, offering alternative methods to evaluate funds more effectively. Gain insights that will guide you toward a more strategic and diversified investment approach for long-term growth.Support the Show.

In this episode we answer emails from Chris, Andrew and Jenzo.  We discuss portfolio, forms of leverage in leveraged portfolios, transitioning to a Golden Butterfly portfolio, and working with your spouse productively on your finances.And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.Additional links:Father McKenna Center:  Home - Father McKenna CenterArticle re Margin vs. Leveraged ETFs:  Margin Trading vs. Leveraged ETFs | Cumberland AdvisorsOptimized Portfolios:  Optimized Portfolio - Investing and Personal FinanceLeveraged ETFs Article:  Double-Digit Numerics - Articles - The Big Myth about Leveraged ETFs (ddnum.com)Warren Buffett's Alpha Article:  Full article: Buffett’s Alpha (tandfonline.com)Gottman -- "Eight Dates" Book:  Eight Dates: Essential Conversations for a Lifetime of Love (gottman.com)Amusing Unedited AI-bot Summary:Ever wondered if using margin or leveraged ETFs is the smarter choice for your investment strategy? This week on Risk Parity Radio, we promise to shed light on this ongoing debate. As we kick off the episode, we liken our podcast to a dive bar of personal finance where humor enthusiasts and seasoned investors alike can find common ground. With a lively introduction, we announce the grand unveiling of our weekly portfolio reviews for eight sample portfolios available on our website. An email from Chris sets the stage for a deep dive into the nuances of leveraging investments using margin or box spreads, responsible leverage, and current rates, all while thanking our generous listeners for their support of the Father McKenna Center.Are high margin rates making you reconsider your investment strategy? We dissect this dilemma by exploring the current landscape and why leveraged ETFs might just be your best bet. With a focus on ETFs like NTSX and UPRO, we suggest additional resources such as Optimized Portfolios to help you navigate your options. Inspired by listener feedback, we also touch on the concept of optimal leverage, referencing studies like "Warren Buffett's Alpha," and discuss the importance of consistent investing strategies over market timing when building a risk-parity portfolio over the next five years.Ready for some good news? This has been an exciting week in the market, with gains across the board. From the S&P 500 to managed futures, everything is up, and our eight sample portfolios are reaping the benefits. We highlight the standout performances of newer and experimental portfolios like the Levered Golden Ratio and the Optra Portfolio. To wrap things up, Frank Vasquez delivers a spirited and humorous sign-off, reminding us to consult with personal advisors before making any financial decisions. Tune in for a rollercoaster of insights and laughs that you won't want to miss!Support the Show.

In this episode we answer emails from Ned, Kyle and Willy.  We discuss tools for the sight-impaired, building out from an accumulation portfolio, the new bitcoin ETFs, and what to do in a complex Coast FI situation involving both an invested portfolio and some raw land.Link:Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna CenterAmusing Unedited AI-bot Summary:Can a legally blind investor successfully navigate the complex world of DIY investing? Tune in as we uncover the inspiring story of Ned, who shares his personal journey and the accessibility tools that empower him to make informed investment decisions. Learn how he balances his focus on large and mid-cap growth stocks while exploring the potential benefits of adding small-cap value, long-term treasuries, and alternative assets like gold and managed futures to his portfolio.In another fascinating segment, we break down the power of ETFs for investing in digital assets such as Bitcoin and Ether, and how platforms like Fidelity and Schwab make it seamless. We then tackle a challenging financial scenario with Willy, who is on the brink of transitioning to Coast FI. Delve into strategies for evaluating his portfolio mix, the implications of selling rural recreational land, and the potential benefits of reallocating to more liquid investments. Discover practical tips and thoughtful analysis to help you make smarter investment choices and achieve financial independence.Support the Show.

In this episode we answer emails from Frank, Michael and Aaron.  We discuss four good portfolio analyzer tools, the hidden meanings in the Risk Parity Radio logo, the deficiencies of the website and where to find good international funds to use for portfolio construction.And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.Additional links:Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna CenterPortfolio Visualizer Monte Carlo Simulator:  Monte Carlo Simulation (portfoliovisualizer.com)Portfolio Charts Portfolio Matrix Tool:  Portfolio Matrix – Portfolio ChartsEarly Retirement Now Toolbox:  An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement NowTestfolio Calculator:  testfol.ioGeometric Golden Ratio Pentagon:  Golden Ratio in Regular Pentagon (cut-the-knot.org)Misbehavior of Markets Book:  The (Mis)Behavior of Markets by Benoît B. Mandelbrot | GoodreadsMore Than You Know Book:  More Than You Know: Finding Financial Wisdom in Unconventional Places by Michael J. Mauboussin | GoodreadsMerriman Best In Class ETF List:  Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)Video Re Best In Class ETFs:  Bootcamp #9 Best in Class ETF Update 2024 (youtube.com)DFA Mutual Fund List:  Funds | DimensionalTruncated AI-bot Summary:Can you imagine transforming your financial journey in the same way you might find camaraderie in your favorite dive bar? Welcome to Risk Parity Radio! Listener Frank reaches out with gratitude and a request for the best tools to backtest portfolios and determine safe withdrawal rates. We also tip our hats to Frank's generous donation to the Father McKenna Center, underscoring our ongoing charity drive in collaboration with the Financial Quarterback podcast.Ever wondered which platforms provide the most reliable data for crafting your financial future? We break down some of the top tools in the industry, like Portfolio Visualizer, Portfolio Charts, and the Early Retirement Now toolbox, along with the new player, Testfolio.  Along the way, we debunk myths around CAPE ratios and share a heartfelt story about our Risk Parity Radio logo, born out of the creativity sparked during the 2020 lockdown.From a cheerful Scottish greeting to a deep dive into international investing, this episode promises both humor and expertise. We tackle Aaron’s email about international ETFs, emphasizing the importance of non-overlapping funds for true diversification. Drawing from resources like the Merriman Foundation and Chris Pedersen's analyses, we guide you in selecting top-tier funds from DFA and Avantis. Support the Show.

In this episode we answer emails from Jared, Jon and Jimmy.  We got the three Js!  We discuss Jared's work to create AI Uncle Frank, his accumulation variation of the O.P.T.R.A. sample portfolio, carry strategies, whether to reinvest distributions and using multiple managed futures funds.Links:Father McKenna Center Donation Page (don't forget to include "The Financial Quarterback Match" in the comment/dedication box):  Donate - Father McKenna CenterJared's Accumulation O.P.T.R.A. Portfolio:  testfol.ioResolve Asset Management Video on Carry Strategies:  Navigating Market Volatility Mastering Managed Futures and Carry Strategies (youtube.com)CCRV Fund:  CCRV – iShares® Commodity Curve Carry Strat ETF – ETF Stock Quote | MorningstarICITF Fund:  ICITF – iPath® Optimized Currency Carry ETN – ETF Stock Quote | MorningstarVideo on QIS Fund:  Simplify QIS Fund Deep Dive (youtube.com)Amusing AI-Bot Generated Summary:Ever wondered if leveraging your investment portfolio could lead to better returns? Discover Jared's transformative journey from a mechanical engineer to a machine learning enthusiast and the creator of a Risk Parity Radio chatbot! Jared shares his intricate process of optimizing a traditional 50-50 stock allocation into a more diversified and leveraged strategy. We’ll dissect the potential benefits and pitfalls of his approach, with a spotlight on managing leverage, mitigating drawdowns, and enhancing overall risk management.We also extend our heartfelt thanks for your generous contributions to the Father McKenna Center. Dive into the exciting realm of AI as we discuss how it's revolutionizing podcast transcriptions and even mimicking the host's voice. Plus, we explore translating podcast episodes into a book with the help of AI. Don't miss our deep dive into listener questions about leveraging portfolios for accumulation, the intricacies of handling dividends and distributions, and an examination of managed futures funds like DBMF and KMLM. Whether you’re in the accumulation or decumulation phase, we’ve got actionable strategies to help you stay on track for long-term success.Support the Show.

In this episode we answer emails from Justin, Joe and Jenzo.  We discuss the legacy of Risk Parity Chronicles, basic accumulation principles, and what we can learn from a debate on gold between Ben Felix and Tyler of Portfolio Charts.  And talk about our charitable promotion for the Father McKenna Center.And then we go through our weekly portfolio reviews of all eight of the sample portfolios you can find at Portfolios | Risk Parity Radio.Additional links:Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna CenterFinancial Quarterback Podcast With Yours Truly:  Breaking Down the Holy Grail of Diversified Portfolios w/ Frank Vasquez Jr. (Risk Parity Radio) (youtube.com)Justin's Station Wagon Portfolio:  The Station Wagon Portfolio - Google DocsJenzo's Link to the Great Gold Debate:  Ben & Tyler showdown - Google DocsAI-generated summary (use at your own risk):Can diversification safeguard your portfolio against turbulent market conditions? Join us at Risk Parity Radio, the podcast with a dive bar vibe where humor meets investment wisdom. This episode begins with a performance review of our eight sample portfolios, demonstrating how diversification has been a protective shield amid market volatility. Plus, we're excited to feature our charitable promotion for the Father McKenna Center, urging listeners to donate and take advantage of our matching offer.We welcome back Justin, the insightful mind behind the now-dormant "Risk Parody Chronicles," for a thought-provoking discussion on the value of freely sharing financial knowledge. We revisit the Station Wagon Portfolio and emphasize the significance of adhering to a well-devised investment strategy. We also respond to Joe's questions about the accumulation phase, advocating for a combination of low-cost index funds, such as S&P 500 and small-cap value funds, and stressing the importance of consistency over the allure of recent top performers.Curious about the timeless debate on gold's role in modern portfolios? We dissect a lively debate between Tyler and Ben Felix, scrutinizing the historical and contemporary merits of holding gold. Alongside, we provide a detailed market analysis, highlighting the recent rise in gold and long-term treasury bonds, and review how different portfolios like the All Seasons and Golden Butterfly have weathered the storm. This episode is a reminder to employ critical thinking and adopt a comprehensive approach when evaluating investment strategies and market trends.Support the Show.

In this episode we answer emails from Ed, Cy, Visitor 5002, and Lucas.  We discuss preferred shares funds, rebalancing and ranting, how the podcast sausage is made and Risk Parity Chronicles.  And the charitable matching opportunity with the Financial Quarterback for the benefit of the Father McKenna Center.Links:  Father McKenna Center Donation Page (don't forget to include "The Financial Quarterback Match" in the comment/dedication box):  Donate - Father McKenna CenterFinancial Quarterback Podcast With Yours Truly:  Breaking Down the Holy Grail of Diversified Portfolios w/ Frank Vasquez Jr. (Risk Parity Radio) (youtube.com)PFFV On Morningstar:  PFFV – Global X Variable Rate Preferred ETF – ETF Stock Quote | MorningstarRisk Parity Chronicles On YouTube:  Risk Parity Chronicles - YouTubeGolden Butterfly Portfolio In Depth:  Golden Butterfly Portfolio – Portfolio ChartsUnedited Artificial Intelligence Description:Ever wondered how to double the impact of your charitable donations while navigating the world of preferred shares funds? On this episode of Risk Parity Radio, we kick things off with something special—a segment dedicated to answering listener emails and revealing our latest charitable promotion for the Father McKenna Center. Learn about an incredible matching donation opportunity connected to my appearance on the Financial Quarterback podcast, and hear about a clever donation strategy using donor-advised funds suggested by our listener, David.Thinking about adding preferred shares to your portfolio but not sure where to start? Listener Ed's email prompts a deep dive into the mechanics and benefits of preferred shares funds. Discover why these funds are appealing, particularly for those in high tax brackets, as we compare ETFs such as PFF, PGX, PFXF, and FPE. I'll share my current top picks, PFFV and PFFD, which boast lower expense ratios and higher dividend payouts, and discuss the tax advantages of qualified dividends. Whether you're looking to enhance your yield or add stability to your investments, this segment is packed with actionable insights.Finally, we turn our focus to the critical practice of portfolio rebalancing, illustrating how this strategy can help you buy low and sell high. We'll share recent examples to highlight its effectiveness, all while adding a bit of entertainment with a playful nod to "Willy Wonka & the Chocolate Factory." Don't forget to engage with us by subscribing, giving ratings, and leaving reviews on your favorite podcast platforms. Tune in for a perfect blend of insightful financial advice, engaging listener interactions, and tips on making a difference through thoughtful charitable contributions.Support the Show.

In this episode we answer questions from Nonamed, Ronald, and Jose.  We discuss how sensational financial media works and why you should ignore it, being thankful for our listeners and how correlations work and relate to macro-economic environments in the context of the Holy Grail principle.  And we discuss our charitable match outreach for the Father McKenna Center.And then we go through our weekly portfolio reviews of all eight of the sample portfolios you can find at Portfolios | Risk Parity Radio.Additional links:Father McKenna Center Donation Page -- Remember to mention "The Financial Quarterback match" in new donations:  Donate - Father McKenna CenterRisk Parity Radio RSS Feed Page For Word Searching The Podcast:  Risk Parity Radio RSS Feed (buzzsprout.com)UNC Paper (not Duke!) Re Treasury Bond Correlations In Recessions (see Page 53 for Chart):  ssrn_id4768684_code533828.pdf (elsevier-ssrn-document-store-prod.s3.amazonaws.com)Ray Dalio Explains The Holy Grail Principle: Ray Dalio breaks down his "Holy Grail" (youtube.com)Bridgewater Paper With Basic Quadrant Model Example (see Page 8):   Bridgewater Paper 2009.12 AW Info Pack.doc (granicus.com)Support the Show.