Episode 459: Kicks And Giggles With A Bogleheads Forum Thread And Practical Issues About Evolving From Accumulation To Decumulation

In this episode we answer emails from Luc and Nick.  We discuss the four levels of investors, the fundamental problems with identity that terms like "saver" and "Boglehead" cause per Morgan Housel, fallacious reasoning often applied to investing and portfolio construction, equity core with growth–value balance and small-cap value tilt, VTI vs VUG trade-offs and tax considerations, tax efficient asset location for bonds, equities, gold, considerations about alternatives like managed futures, and using risk parity portfolios for intermediate term savings during your accumulation phase.Links:Luc's Boglehead Forum Link:  Golden Ratio Portfolio - Frank Vasquez - Bogleheads.orgMindy Jensen's Risk Parity Style Portfolio:  We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)Breathless Unedited AI-Bot Summary:Want a portfolio that funds your life, not your identity? We dig into the fuss around the “Golden Ratio” name and get to what actually matters: principles that increase safe withdrawal rates and reduce stress when markets turn weird. Instead of defending a formula, we show how to use uncorrelated assets, thoughtful macro-allocation, and enough simplicity to keep you invested without blinding you to risk.We break down four investor levels—from money hygiene and shiny-object traps to the comfort of low-cost indexing—and then the jump to level four, where professional-grade ideas get translated for DIY investors. That’s where uncorrelated assets like Treasuries, gold, and managed futures earn their keep, not because they’re trendy, but because they lower correlation to stocks and smooth cash flows across regimes. We also call out common fallacies that derail portfolio debates: past performance cliches that prove nothing, irrelevant metrics used as cudgels, and cherry-picking that erases the 1970s and 2022 as if rare events never recur.Then we get practical with a young FI couple: how to build a durable equity core by pairing total market or large-cap growth with a small-cap value tilt, why VTI is usually fine while VUG may diversify better against value in tax-deferred accounts, and how to avoid tax pain when transitioning. We map smart asset location—ordinary-income generators in traditional, long-term growers in Roth, tax-efficient equities in taxable—and set realistic ranges: 40–70 percent stocks, 15–30 percent Treasuries, under 10 percent cash, and 10–25 percent alternatives. No dogma, just ranges that historically support higher withdrawal rates.We close with a versatile idea: an intermediate risk parity “slush” portfolio you can tap for big purchases without riding the all-stock rollercoaster. Add to laggards, sell winners, keep it simple, and stay focused on the only scoreboard that matters—sustainable spending. If you’re ready to trade identity for outcomes and marketing for math, this one’s for you.If this resonated, follow the show, leave a review, and share it with a friend who’s rethinking their allocation. Your future self—and your future spending—will thank you.Support the show

In this episode we answer emails from Ron, Mark, Rick and Keith.  We revel in your generosity and discuss the mechanics of monthly withdrawals and how rebalancing smooths that over, modelling portfolio with money going in and money going out, and a follow up on portfolios employing futures contracts as leverage.  And gooooold!  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:  Donate - Father McKenna CenterOur South Africa Trip Video Playlist:  Penguins in Cape TownRemembering Gov. Schaefer:  The Eastern Shore remembers SchaeferRecent Bigger Pockets Money Episode Mentioning RP Portfolios:  FIRE is Dead...and Here's What Replaced ItPortfolio Visualizer Financial Goals Tool:  Financial GoalsAccumulating in a Golden Ratio Portfolio Article:  Minimize Your Miss – Portfolio ChartsKeith's Portfolio Backtest:  https://testfol.io/?s=9Am02OVX6XDBreathless Unedited AI-Bot Summary:Gold doesn’t care about narratives, and this year it’s rewriting a lot of them. We walk through what a powerful gold run means for real-world withdrawals, safe withdrawal rates, and the way diversified portfolios shoulder risk when the regime shifts. From the Golden Butterfly and Golden Ratio to return-stacked experiments, we review performance, drawdowns, and why structural diversification—equities, Treasuries, gold, real assets, and managed futures—often beats clever timing when you’re spending from your nest egg.We also open the donor mailbag with sharp questions from listeners practicing monthly withdrawals ahead of retirement. Should you fund withdrawals from accumulated cash or trim recent winners? How much does trade timing matter at month-end? We share simple rules that reduce friction: let dividends build a cash buffer, sell strength back to targets, and rely on periodic rebalancing to correct small timing errors. For those using volatile tools like UPRO, TMF, or crypto, we explain why defined targets and a steady cadence matter more than chasing the “perfect” price.Futures curious? We touch on financing costs, collateral choices, and the risk realities of leverage, including why even elegant models must respect max drawdown. Along the way, we challenge the habit of erasing the 1970s from gold analysis and highlight how data-driven diversification can protect retirees from sequence risk. Whether you’re simulating withdrawals or already living on your portfolio, you’ll get practical tactics and a clearer lens for portfolio design.If this resonates, follow the show, leave a review, and share it with someone planning their retirement drawdown. And if you want your question answered sooner, support the Father McKenna Center through our site—every donation helps and moves you to the front of the line.Support the show

In this episode we answer emails from Niek, Dustin, Dale, Hydromod and .  We discuss adopting a golden ratio mix and not having unrealistic expectations, the plusses and minuses of the AI-version-of-you fad, the new website and why trying to use gold futures for leverage might not be the best choice for your gambling problem.Link:  Father McKenna Center Donation Page:  Donate - Father McKenna CenterBreathless Unedited AI-Bot Summary:Ever had a month where nearly everything in your portfolio rose and wondered if the universe broke? We unpack why September’s across-the-board lift made sense in a weaker-dollar world, what temporary positive correlation looks like in practice, and how a golden ratio-style allocation helps you ride the wave without refreshing your account every hour.A listener’s note from the road kicks off a candid conversation about trusting diversified portfolios and ignoring daily noise. From there, we dig into the hype and hazards of AI finance gurus—yes, including Ray Dalio’s “digital Ray.” We talk usefulness, accuracy gaps, and the risk of forming unhealthy attachments to bots that sound wise but miss nuance. Along the way, we challenge a popular myth: that copying successful people’s habits will unlock their results. Extraordinary investors aren’t great because they make their beds; they’re great because they’re extraordinarily skilled. For the rest of us, evidence-based allocations, low costs, and sensible rebalancing are the habits that pay.We also get practical. You’ll hear our simple distribution shortcut (divide by 240 for a 5% annualized monthly draw), plus a tour of our streamlined website with faster search and full transcripts. Then we roll up our sleeves on gold exposure: why futures create rollover and curve headaches, when ETFs and return-stacked funds can be smarter, and how modest, low-cost margin—or leveraging equities instead—can open room for diversifiers like gold and managed futures. The throughline is clarity over complexity: build a portfolio that bends without breaking, whether the dollar dips, inflation flares, or correlations get weird for a while.If this resonates, follow the show, leave a quick review, and share it with a friend who’s wrestling with allocation choices. Your questions shape future episodes—send them our way and join the conversation.Support the show

In this episode we answer emails from Jimmy, Anonymous and Matthew.  We discuss financing a home with portfolio leverage via ETFs or margin, revel in the generosity of our listeners and real-life encounters, and review a risk parity style portfolio and plan.  And touch on our recent vacation to South Africa.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:  Donate - Father McKenna CenterNew Father McKenna Center YouTube Channel:  Father McKenna Center - YouTubeSOAR Gala Information:  2025 Washington DC Awards Gala - SOAR! - Support Our Aging ReligiousBreathless Unedited AI-Bot Summary:  A near-miss with lions on safari sets the stage for a different kind of risk: how to fund a new home when most of your wealth sits in a taxable portfolio. We dive straight into the trade-offs between selling positions, taking a margin loan at a low-cost broker, or using a return-stacked ETF like RSST to maintain exposure while freeing up cash. The core question isn’t just, “Can I do this?” but “Can I live with it through a full market cycle?” We break down taxes, financing costs, and the behavior premium that separates clever from fragile.From there, we build a clean, high-conviction risk parity allocation anchored in three pillars—stocks, Treasuries, and gold—and show why that can be enough to lift a safe withdrawal rate if you respect correlation math and rebalance discipline. Within equities, we pair large-cap growth with small value and international value to spread factor and regional risk. In the bond sleeve, we weigh a simple one-fund approach against a two-fund split (VGIT + VGLT) for small fee and flexibility gains. We also get practical on withdrawals: monthly trims from winners can quietly rebalance your portfolio while matching real-life bills, while quarterly or annual withdrawals suit planners who prefer fewer moves and more cash on hand.Finally, we pull up the dashboard. Gold’s massive run challenges narratives that cherry-pick 1980 as a starting point; bonds have life; small value lags; and our sample portfolios highlight why diversification and costs matter more than headlines. The classics keep compounding, while the leveraged set underscores that concentration plus leverage is a rough mix, and thoughtful “return stacking” needs clear rules and flexible spending. If you’re weighing a home purchase, chasing a higher safe withdrawal rate, or simply trying to keep your strategy steady, you’ll find concrete steps you can use today.Enjoy the conversation? Follow the show, leave a quick review, and share this episode with a friend who’s planning a big financial move.Support the show

In this episode we answer questions from Chris, George and "I Have No Name."  We discuss a transition situation with bonus portfolio question, the plusses and minuses of Pralana and similar calculators, and an amusing take on the Golden Butterfly portfolio reimagined.Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterRational Reminder Podcast:  David C. Brown: The Underperformance of Target Date Funds | Rational Reminder 374Breathless Unedited AI-Bot Summary:What happens when you need to transition from a high-equity portfolio to a risk parity approach but face limited investment options in your 401(k)? How reliable are those fancy retirement calculators that promise to predict your financial future? And do those neatly organized "bucket strategies" actually improve portfolio performance, or are they just psychological comfort tools?Frank Vasquez tackles these pressing questions from listeners who are navigating the complexities of retirement planning and portfolio construction. Beginning with practical advice for a listener four years from financial independence, Frank explores how to handle the transition to a risk parity portfolio despite restrictive 401(k) investment options. Rather than fixating on finding the perfect funds immediately, he suggests focusing on getting the macro-allocations roughly right until more flexibility becomes available through an IRA rollover.The conversation shifts to a critical examination of retirement calculators like Pralana that rely on parameterized returns rather than historical data. Frank cuts through the marketing hype to reveal why these tools often function more like crystal balls than reliable forecasting instruments. "You're supposed to use base rates," he explains, "not make up things from a crystal ball that says things are going to be worse than they were before, better than they were before." This segment offers a masterclass in distinguishing between good forecasting methodologies and mathematically sophisticated but fundamentally flawed approaches.Perhaps most illuminating is Frank's analysis of bucket strategies in retirement planning. While organizing investments into conceptual buckets labeled for different time horizons may feel reassuring, these psychological tools don't fundamentally alter portfolio performance. "Looking at personal finance and separating what is finance from what is personal" becomes the key insight, helping listeners distinguish between strategies that actually improve financial outcomes versus those that simply make complicated concepts easier to visualize.Ready to see beyond the marketing gimmicks and focus on evidence-based approaches to retirement planning? Listen now, then like, subscribe, and leave a review to support the show while Frank takes a brief hiatus until mid-October.Support the show

In this episode we answer one big long email from Mr. Bill (actually Dr. Bill). We discuss a planning process grounded in good data science, forecasting techniques and decision theory, and how we incorporate the concepts described in Bill Bengen's new book, using Dr. Bill as our guinea pig.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:  Donate - Father McKenna CenterRisk Savvy Lecture:  Risk Savvy: How to Make Good DecisionsBill Bengen's New Book:  Bill Bengen's New Book | A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More.Portfolio Charts Safe Withdrawal Rate Calculator:  Withdrawal Rates – Portfolio ChartsBreathless Unedited AI-Bot Summary:Retirement planning doesn't have to be rocket science. In this illuminating episode, we dive deep into the transition from accumulation to distribution phases of financial independence, offering a clear-eyed approach based on data science and practical wisdom.At the heart of effective retirement planning lies proper forecasting methodology. Most financial advisors miss this crucial foundation – they load forecasts with conservative assumptions rather than using base rates, creating unnecessarily fearful projections. We explore why understanding the difference between risk (what's calculable) and uncertainty (what isn't) transforms how you should approach planning for the decades ahead.The four levers that control your retirement success form our central framework: supplemental income, asset selection, flexible withdrawals, and fear/hoarding. Each lever offers unique opportunities to optimize your financial independence. Risk parity portfolios consistently demonstrate 1-2% higher safe withdrawal rates than traditional portfolios, while simply accounting for retirees' typical lower inflation experience (CPI minus 1-2%) can safely increase withdrawal rates by 0.5-1%.We tackle the psychological aspects of retirement planning too. Most retirees underspend significantly, pulling the "fear and hoarding" lever while ignoring the other three, ultimately sacrificing quality of life and relationships. Instead, we advocate for thoughtful legacy planning while alive – supporting family members, teaching financial literacy, and creating meaningful impact with your resources.Whether you're approaching retirement or already there, this episode offers practical wisdom to simplify your planning process. By focusing on tracking expenses meticulously in the early years and using simple rules of thumb for long-term forecasting, you'll create a retirement plan that maximizes both financial security and life satisfaction.Support the show

In this episode we answer emails from Adam, Private Cowboy, and Jose.  We discuss managed futures (again with references!), Bill Bengen's latest book and how it integrates into our approach, and the pros and cons of a Vanguard Personal Advisor-created portfolio and the hypocritical quandaries it creates with the gods of Simplicity.Links:Demystifying Managed Futures:  Demystifying Managed FuturesBloomberg Presentation On Investments In Inflationary Environments:  MH201-SteveHou-Bloomberg.pdfDunn Capital Analysis:  High-Vol-Trend-Following-Trend-Index-Edition-0825-DIGITAL.pdfKardinal Financial Video:  What is Alternative Investing?Interview of Bill Bengen:  Episode 195: The 4% Rule and Beyond: Retirement Strategies with Bill BengenWeird Portfolio:  Weird Portfolio – Portfolio ChartsAfford Anything Episode:  #618: How to Retire at 50 While Supporting Aging Parents, with Frank Vasquez - Afford AnythingCorey Hoffstein Interview:  Show Us Your Portfolio: Corey HoffsteinBreathless AI-Bot Summary:The perfect asset allocation isn't a formula—it's a framework built on uncorrelated assets that dance to different drummers during market storms. This episode dives deep into managed futures, one of the most powerful yet misunderstood portfolio diversifiers available to individual investors.Three listener questions explore how managed futures fit within retirement portfolios, particularly for those approaching their post-career years. Frank breaks down why managed futures have essentially zero correlation to stocks, bonds, and even gold, making them uniquely valuable during both inflationary crises (like 2022) and deflationary periods (like 2008). He references new research from Dunn Capital comparing various alternative strategies and explains how ETFs like DBMF have democratized access to institutional-quality diversification.Beyond managed futures, the episode synthesizes Bill Bengen's latest safe withdrawal rate research with Ray Dalio's "Holy Grail" principle of uncorrelated assets. While Bengen's new book doesn't explicitly analyze alternatives, Frank connects these complementary approaches to formulate practical guidelines: maintain 40-70% equity exposure divided between growth and value, use 15-30% treasury bonds for recession protection, allocate 10-25% to alternatives, and limit cash to under 10%.The discussion takes a critical look at cookie-cutter financial advice, particularly questioning whether paying 0.3% annually to a Vanguard advisor provides value when their recommendations often involve overlapping funds and questionable international bond allocations. Frank challenges the "worship of simplicity" that permeates financial discussions while exposing the irony that these same advisors often recommend complex multi-fund portfolios.What emerges is a call for "system two" thinking—the willingness to incorporate new information rather than clinging to outdated formulas out of consistency.Support the show

in this episode we answer emails from Chris, Trudie, and Earl.  Highlights:  The Father McKenna Center "Top of the T-shirt" campaign raised over $66,624 thanks to generous listener contributions; financial advisors are conflicted and also relatively uninformed marketing machines who are not very curious about finances and are too reliant on calculators; AI tools like Copilot can help implement risk parity strategies when fed quality information.And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.If you have comments or questions, please email [email protected] or visit www.riskparityradio.com.Breathless AI-Bot Summary:What happens when financial wisdom meets unconventional thinking? This episode of Risk Parity Radio opens with Emerson's timeless quote about foolish consistency being "the hobgoblin of little minds" – perfectly setting the stage for a fresh look at portfolio management that marches to a different beat.The Risk Parity Radio community shines as Frank announces the remarkable success of the Father McKenna Center fundraising campaign, which raised over $66,624. This achievement showcases the extraordinary engagement of listeners who value both financial knowledge and giving back. As Frank puts it, "I never really cared about having the largest audience. I just wanted to have the most engaged audience" – and with 2,500 regular listeners who actively participate in such initiatives, that goal has clearly been achieved.Diving into listener correspondence, Frank explores how one community member has leveraged AI tools like Copilot to implement risk parity strategies. This sparks a broader examination of technology's role in personal finance, with Frank cautioning that AI is only as good as the information it's fed. In an age where many advisors have become what Frank calls "calculator jockeys" – professionals who rely on planning software without understanding its limitations – this distinction between tools and expertise becomes crucial.The episode delivers a masterclass in practical financial knowledge, including an elegant explanation of the 240/200 rule for calculating monthly distributions. This mathematical shortcut exemplifies the podcast's approach: making complex concepts accessible without talking down to the audience. Frank demonstrates how dividing a portfolio value by 240 yields a monthly distribution equivalent to a 5% annual withdrawal rate – the kind of straightforward, useful information that listeners can immediately apply.The weekly portfolio review reveals impressive performance across all eight sample portfolios, with gold continuing its remarkable run at 36.91% year-to-date. From conservative allocations to more experimental leveraged strategies, these real-world examples provide valuable insights for listeners navigating their own investment journeys.Ready to break free from financial convention and build a portfolio that truly reflects your goals? Subscribe now and join a community of independent thinkers who know that sometimes the most rewarding path is the one less traveled.Support the show

In this episode we answer emails from Andy, Phil and Brady.  We entertain Andy's musings on small cap value and the economy with crystal balls and complex adaptive systems theory, discuss the foibles of radio personalities attempting to try to be able to comment on what we do -- and their hypocrisies and conflicts of interest --, and touch base with the parent of a special needs child.Links:Phil's link to Radio Personality Podcast:  Query Day - Talking Real Money - Investing Talk - Apple PodcastsMary Tyler Moore Episode:  The Mary Tyler Moore Show S5E23 Ted Baxter's Famous Broadcasters' School (February 22, 1975)Comparison of 60/40 and Golden Ratio Portfolios:  https://testfol.io/?s=eUbVJ2frelJApella Wealth Form ADV:  APELLA WEALTH - Investment Adviser FirmMorningstar Article Re GLDM and DBMF:  How ETF Diversifiers Performed During Market Turmoil | MorningstarBreathless Unedited AI-Bot Summary:Ever wonder why financial advisors insist DIY investing is "too complicated" while charging fees that can consume a third of your retirement income? In this eye-opening episode, Frank Vasquez exposes the hypocrisy behind mainstream financial advice and offers practical alternatives for truly resilient portfolios.When a listener asks whether structural market changes warrant portfolio adjustments, Frank dives into the nature of financial markets as complex adaptive systems. Like a sandpile where it's impossible to predict which grain will cause an avalanche, markets respond to events in unpredictable ways that even the most sophisticated models can't forecast. This reality doesn't mean we should abandon strategy—rather, it underscores why diversification across truly different asset classes matters more than ever.Frank takes aim at financial media personalities who promote oversimplified solutions while dismissing alternatives they don't fully understand. Through careful analysis of SEC disclosures, he reveals how some advisors criticize strategies on air that their own firms use with paying clients. The fixation on "simplicity" often serves as marketing to convince DIY investors they need professional help, while masking fee structures that can extract 1-1.5% of assets annually—an enormous drain on retirement resources.The episode highlights recent Morningstar research confirming what Risk Parity Radio has long advocated: portfolios incorporating alternative assets like gold and managed futures demonstrably outperform traditional 60/40 allocations while reducing volatility. As Frank notes, echoing Einstein, we should make investing "as simple as possible, but no simpler." This wisdom proves especially crucial during withdrawal phases when sequence risk poses the greatest threat to retirement security.Whether you're planning for your own retirement or, like one listener, strategizing for a dependent with special needs who may require lifelong support, this episode offers both practical insights and a framework for evaluating financial advice with clear eyes. In a world where conflicts of interest often distort financial guidance, Frank's independent perspective provides a refreshing and valuable counterpoint.Support the show

In this episode we answer emails from a Mysterious Visitor, Pal and Byron.  We review our approach to international stock funds and how to improve their diversification, try to help out a Canadian nomad and discuss some new Vanguard funds.And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.Additional Links:US vs International Stocks In Strong And Weak Dollar Markets (link from Episode 393:  us-dollar-strength-has-correlated-with-performance-03312023.pdfTestfolio Analysis of VXUS vs. AVDV and IDMO:  testfol.io/analysis?s=eDLfJ4jcFLKConstructing a Golden Ratio Portfolio with International Components:  We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)Byron's Link:  Vanguard Launches a New Actively Managed Bond ETF | VanguardNew Wellington ETFs:  Vanguard to Launch First Stock-Picking ETFs With Wellington — at Its Highest Fees YetBreathless Unedited AI-Bot Summary:Conventional wisdom about international diversification gets turned on its head as we explore what truly drives the performance difference between domestic and international stocks. Far from being about different economies or company headquarters, approximately 40-50% of this performance gap stems directly from currency fluctuations between the US dollar and foreign currencies. When the dollar weakens, international stocks surge; when it strengthens, US stocks lead.For investors focused on building resilient portfolios with sustainable withdrawal rates, this revelation reshapes diversification priorities. Value versus growth diversification emerges as significantly more important than geographic diversification, followed by size factor (small versus large caps). This hierarchy challenges the simplistic notion that pairing a total US market fund with a total international fund provides meaningful protection.Large US companies already operate globally, selling into worldwide markets regardless of headquarters location. This makes traditional total international funds less diversified from US large caps than many investors realize. Instead of blanket international exposure, we explore more effective approaches using specific international value, small-cap, and emerging market funds that provide genuine diversification benefits.The episode also tackles practical implementation questions, including how expatriates and nomadic investors might construct globally resilient portfolios using Irish-domiciled ETFs for potential tax advantages. We briefly examine Vanguard's new ETF offerings and explain why their corporate bond funds hold limited appeal for investors seeking recession insurance rather than income.Our monthly portfolio review highlights gold's stellar performance (up 31.56% year-to-date) amid dollar weakness, demonstrating the principles discussed throughout the episode. These eight real-world portfolios showcase different approaches to implementing risk parity principles, with performance and distribution data available at riskparityreview.com.Support the show