Episode 380: Missing Links, Efficient Transitioning In Taxable Accounts And Incorporating Global Exposures

In this episode we answer emails from Cy, Lucas, and Rafa.  We discuss a poem from a financial advisor, a quandary between two gambling problem leveraged portfolios and application of the Macro-allocation Principle, and what to do about a trust with an abbreviated distribution timeline.Note, we forgot to include the second email from Lucas, but it was just yet another reference to the Cederburg paper that has already been beaten like a dead horse.Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterCederburg Paper redux (revised December 2024):  Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice by Aizhan Anarkulova, Scott Cederburg, Michael S. O'Doherty :: SSRNAmusing Unedited AI-Bot Summary:What happens when AI and financial advice collide in unexpected ways? Join me, Frank Vasquez, as I share an amusing tale of a birthday poem that might just have been crafted by a robot for my client, Randolph. We dive into the hilarious side of AI-generated content and how it intersects with personal finance, pondering the sincerity of such personalized gestures. Alongside these playful musings, we explore listener inquiries, prioritizing those supporting our cherished Father McKenna Center, and trace the ripples of AI's growing role in financial advisory services.Ever wondered if your investment portfolio could use a strategic shake-up or if classic Western films still hold a place in today's world? We tackle these questions by examining the pros and cons of composite versus aggressive asset class funds, unraveling the complexities of leveraging investments. As a palate cleanser, we venture into a nostalgic realm, reminiscing about the enduring legacies of Western film icons like Gene Autry and Randolph Scott. Their timeless appeal serves as a reminder of past cinematic glory, offering a perfect blend of finance, nostalgia, and entertainment without crossing into the realm of legal or tax advice. Tune in for an engaging journey through these fascinating topics!Support the show

In this episode we answer emails from Ed, Wes and Mary Anne.  We revisit the momentum factor and squeeze that lemon a bit (and our dinner with the Dude) talk about mid-caps and limited 401k options, and discuss some of the information on the portfolios page at the website (and its limitations).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 CenterTest Folio Analysis of Large Cap Growth And Momentum Funds:  testfol.io/analysis?s=aBroPEsxfLpTest Folio Analysis of Small Cap Value With Momentum:  testfol.io/analysis?s=fjwv647o2PUAmusing Unedited AI-Bot Summary:Can a simple shift in investment strategy transform your portfolio's performance? Explore the power of momentum factors with us in this episode of Risk Parity Radio. We unpack a listener's question on how momentum could enhance a diversified mix of large cap growth, small cap value, long-term government bonds, gold, and rental properties. Delve into the nuances of funds like MTUM and QMOM, and discover whether they offer a meaningful edge over traditional large cap growth options. We promise you'll leave with a clearer understanding of when momentum factors might be a game-changer for your investment strategy.Navigating the complex world of portfolio performance metrics can be daunting. With insights from listener Mary Ann's query, we dissect the intricacies of interpreting performance charts and the importance of total return over an income-only focus. Our conversation touches on tools like Testfolio and Portfolio Visualizer, essential for a consistent, long-term analysis. Don't miss our take on the festive phenomenon known as the Santa Claus rally and how it might impact your financial decisions this December.As we wrap up, join us for a weekly portfolio performance review, where we assess both traditional and experimental portfolio setups. From the All Seasons to the new Optra portfolio, discover the latest trends and strategies. Stick around for our quirky sign-off and find out how you can interact with us, sharing your thoughts and questions. Whether you're a seasoned investor or just curious about optimizing your financial future, this episode is packed with insights and a sprinkle of humor to keep things lively.Support the show

In this episode we answer email from Pankaj, Matthias and Iain.  We discuss the simple path to withdrawals when you are over-saved and the over-complications of the over-saved, reprise some information about leveraged accumulation portfolios and provide some tips for a U.K listener.Links:Interview of Jim Grubman: Dr. Jim Grubman: The Psychology of Wealth | Rational Reminder 282PensionCraft YouTube Channel:  What Is The Safe Withdrawal Rate In Retirement?Many Happy Returns Podcast:  Building a Bulletproof Retirement Portfolio, with Tyler from Portfolio Charts - Many Happy ReturnsAmusing Unedited AI-Bot Summary:  Could a simple tweak to your investment strategy unlock enhanced withdrawal rates and bolster your legacy savings? We unravel the misconceptions surrounding risk parity portfolios and explore how they truly aim to balance asset risk profiles, not just maximize safe withdrawal rates. Discover innovative portfolios like the golden butterfly and golden ratio designed to potentially boost your financial freedom, especially if your spending is comfortably below 3%. For those more focused on long-term growth, we share Warren Buffett’s straightforward approach: a mix of 90% S&P 500 and 10% T-bills. Join us as we also highlight the conservative investment habits of financial minds like William Bernstein and Bill Bengen, and the irony of their attraction to simplicity amidst complex financial strategies. We explore the power of leveraging portfolios for high risk tolerance investors with long horizons, discussing how concentration and leverage could elevate your returns. Practical advice on setting up a leveraged portfolio is on the docket, along with the risks you need to consider. Remember, this engaging episode is purely for your entertainment and enlightenment, not financial guidance.Support the show

In this episode we answer emails from Ashley, Alexi (a/k/a "the Dude"), and Sean.  We discuss our charity and my financial coaching on the side, fun times with the Dude, and an overview of the use of bonds in a portfolio and principles of portfolio construction.  For reference, earlier bond episodes mentioned are 14, 16, 75 and 78, 142, 186 and 232, although there are others you can find on the RSS feed page.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 CenterChooseFI Podcast With Yours Truly:  194 | The Role of Bonds in a Portfolio | With FrankPortfolio Visualizer Monte Carlo Simulator:  Monte Carlo SimulationPortfolio Charts Portfolio Matrix Calculator:  Portfolio Matrix – Portfolio ChartsTestfolio Site:  testfol.ioAmusing Unedited AI-Bot Summary:Ever wondered how to optimize your portfolio during the distribution phase of your financial journey? Picture this: you're sitting at a cozy dive bar, sipping your favorite drink, while we unravel the art of asset allocation in a way that's both enlightening and entertaining. Join me as I share Ashley's inspiring story, a listener who not only hit an impressive milestone of three million dollars in liquid assets but also made a generous donation to the Father McKenna Center. Her journey is a testament to the power of community and the surprising impact of employer matching in charitable giving.Brace yourself for a lively tête-à-tête on financial consultation and strategy, complete with tales of delightful dinners and the irreplaceable warmth of human interaction. Discover how a simple evening out with listener Alexi turned into a treasure trove of insights into building portfolios that cater to substantial spending for loved ones. Amidst the laughter and pop culture references, you'll hear musings on AI's role in podcasting and why the human touch remains a cherished component of our discussions in an automated world.As we meander through the intricacies of bond investing, prepare to challenge conventional wisdom with modern tools like Portfolio Visualizer and Monte Carlo simulations. We'll explore the nuances of bond ETFs and strategic cash allocations, advocating for a more nuanced approach to retirement planning. From understanding the dynamics between stocks and bonds to critiquing typical cash hoarding habits, this episode promises a hearty mix of humor, insight, and practical advice. So grab a seat, and let's embark on this journey to demystify investment strategies while keeping it all delightfully entertaining.Support the show

In this episode we answer emails from Justin, Matt and Donald.  We regale in friendships, revisit large cap growth funds with IWY, do a reprise of Episode 238 about the limitations of CAPE ratios with the help of AI podcasters, and discuss the purpose of treasury bonds in a portfolio as recession insurance, and the circumstances of when you might not need it.Links:Father McKenna Center Lessons & Carols:  Lessons and Carols - Father McKenna CenterFather McKenna Center Donation Page:  Donate - Father McKenna CenterComparison of QQQ, VUG and IWY:  testfol.io/analysis?s=6uPSB8ZpIIREpisode 238:  Podcast | Risk Parity Radio Episode 238Pinwheel Portfolio:  Pinwheel Portfolio – Portfolio ChartsAmusing AI-Bot SummaryWhat if you could navigate the complex world of asset allocation with confidence? Discover the secrets to mastering large-cap growth funds as we share an email from Justin, who pits QQQ, VUG, and IWY against each other, revealing why IWY takes the crown for concentrated growth. As we reminisce about the insightful posts on the Risk Parity Chronicles blog, we also invite you to join us in supporting the Father McKenna Center through our charity event. This episode is a blend of foundational investment principles and community spirit, perfect for both new and seasoned listeners.Ever wondered how useful the CAPE ratio really is for your retirement plan? We tackle this question head-on, weighing its stability in stock market valuations against its pitfalls in predicting short-term and sector-specific performances. Our conversation highlights the importance of a diversified, flexible portfolio that aligns with your personal values and long-term goals. With insights from the Fama-French model and behavioral economics, we aim to equip you with strategies that mitigate biases and enhance financial decision-making.Feeling puzzled about the role of long-term treasury bonds in your portfolio? Our discussion, inspired by an email from Donald in the U.S. Navy, examines their necessity as recession insurance and deflation hedges. We trace the evolution of risk parity portfolios, emphasizing the significance of diverse assets in navigating economic uncertainties. Lastly, indulge in a light-hearted reflection on love and technology, as we celebrate connections that transcend the digital realm. Tune in for a heartfelt, humorous, and informative journey with Risk Parity Radio.Support the show

In this episode we answer emails from James, Van and Michael.   We discuss the new international fund in the federal TSP, the Pinwheel Portfolio and the Portfolio Matrix Tool, and variations in portfolio management with the Golden Butterfly portfolio. 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 Lessons & Carols:  Lessons and Carols - Father McKenna CenterFather McKenna Center Donation Page:  Donate - Father McKenna CenterArticle About New TSP International Fund:  What to Know About the New TSP I Fund | MorningstarMerriman Best In Class ETFs:  Best-in-Class ETF Recommendations | Merriman Financial Education FoundationPinwheel Portfolio:  Pinwheel Portfolio – Portfolio ChartsPortfolio Matrix Tool:  Portfolio Matrix – Portfolio ChartsAmusing Unedited AI-Bot Summary:Imagine stepping into a world where personal finance feels as cozy and welcoming as your favorite neighborhood bar. On this episode of Risk Parity Radio, hosted by Frank Vasquez, we tackle James' inquiry about the iFund in the Thrift Savings Plan, delving into its recent shifts, and why you might want to consider the C fund or other diversification paths beyond the TSP. The conversation takes an intriguing turn as we discuss how the mighty US dollar sways international investments, urging you to broaden your horizons for potentially richer outcomes.Join us for a colorful exploration of investment portfolios like the All-Seasons, Golden Butterfly, Golden Ratio, and Risk Parity Ultimate, each with their own flair and strategy. We navigate through last week's market waves, noting which portfolios are riding high and those that are weathering the storm. Venturing into the more adventurous terrain of leveraged funds, we underscore both the thrill and the risks involved. Frank also shares a touch of personal wisdom from his mother's sayings, reminding us that life's journey is full of unpredictable twists—just like the world of investments. Connect with Frank via email or the Risk Parity Radio website, and remember, while we're here to entertain and inform, your financial decisions deserve tailored advice from your trusted experts.Support the show

In this episode we answer emails from George, Alexi (a/k/a "the Dude") and Sean.  We discuss a new article about the benefits of managed futures in a portfolio, the Dude's face-off between VUG and QQQ, and considerations for choosing large cap growth funds and international value funds.Links:Father McKenna Center Lessons And Carols:  Lessons and Carols - Father McKenna CenterNew Article About Managed Futures:  2024Q3_QuanticaQuarterlyInsights.pdfBloomberg Presentation On Investments In Inflationary Environments:  MH201-SteveHou-Bloomberg.pdfDBMF "Managed Futures 101" Microsite:  iMGP DBi Managed Futures Strategy ETF | iM Global PartnerThe Dude's VUG vs. QQQ Link #1:  Asset CorrelationsThe Dude's VUG vs. QQQ Link #2:  testfol.io/?s=kMopG7yQ6SOThe Dude's  VUG vs. QQQ Link #3:  testfol.io/?s=2dpHLA3ndmVThe Dude's  VUG vs. QQQ Link #4:  Factor Regression AnalysisAmusing Unedited AI-Bot Summary:Discover the power of trend-following strategies and the impact of charitable giving in the latest episode of Risk Parity Radio. We promise you'll gain insights into the effectiveness of managed futures strategies, particularly in high-interest rate environments, and how they can bolster your risk parity portfolios. We also explore listener George's perspective on CTA strategies and dive into the compelling debate of VUG versus QQQ for large-cap growth ETFs. Plus, you'll hear about the incredible work being done by the Father McKenna Center in Washington, DC, and how you can make a difference through their holiday and Giving Tuesday events.Join us for a thoughtful conversation filled with humor as we engage with our diverse audience, ranging from finance enthusiasts to seasoned investors. This episode is packed with practical financial wisdom that simplifies portfolio management while offering listeners opportunities to support meaningful causes. As we wrap up, we're grateful for your continued support and donations, and we encourage listener engagement through comments, questions, and reviews. Tune in to be part of this vibrant community and enhance your financial journey.Support the show

In this episode we answer an email from Tom, Tom the Podcaster's Son (a/k/a "Patrick Star").  We discuss the basics of retirement accounts in honor of the annual benefits enrollment period and some rules of thumb for contributing to them, with a little commentary on HSAs.  We also discuss interesting recent podcasts featuring Bill Bengen, Corey Hoffstein and Cliff Asness.  And our friend Jackie Cummings Koski.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:Bill Bengen podcast:  The Father of the 4% Rule Fina - Afford Anything - Apple PodcastsCorey Hoffstein podcast:  Masters in Business: Corey Hoffstein - BloombergCliff Asness podcast:  Old Man Yells at the Cloud | TCAF 167Tax Tables:  2024-2025 Tax Brackets and Federal Income Tax Rates | BankrateJackie podcast #1:  Jackie Cummings Koski: Late St - The Long View - Apple PodcastsJackie podcast #2:  From Poverty to Wealth and Ear - Catching Up to FI - Apple PodcastsJackie podcast #3 (HSA focused):  All About The Health Savings A - Journey To Launch - Apple PodcastsSample Investopedia Article:  401(k) vs. IRA: What’s the Difference?Amusing Unedited AI-Bot Summary:Unearth the secrets to a financially independent future as we explore groundbreaking strategies and expert insights in this episode. Learn why Bill Bengen's latest research challenges conventional wisdom on withdrawal rates and how a diversified portfolio, including alternative assets like gold, can empower your financial journey. With engaging discussions from finance heavyweights like Corey Hofstein, we promise you a treasure trove of actionable advice to enhance your portfolio management and tax strategies.This episode is a masterclass for the do-it-yourself investor, guiding you through the maze of retirement account options and tax implications for every stage of life. For young professionals, discover how to maximize your 401k and Roth contributions, while mid-career individuals will learn to optimize savings amidst family and mortgage commitments. If you're nearing retirement and feeling off-track, we offer insights to realign your financial plans and keep your retirement goals within reach.Join us as we tackle the complexities of retirement account withdrawals and the strategic use of Health Savings Accounts as investment vehicles. With practical advice and a touch of humor, we'll navigate the week's market performances and celebrate the gains in sectors like the S&P 500, NASDAQ, and gold. From the power of compounding to the significance of early financial planning, this episode is your guide to mastering the art of financial independence.Support the show

In this episode we answer emails from Melissa, Neil, Mark and Mike.  We discuss a missing link from Episode 7 and a substitute for it, the podcast distribution, moving from an accumulation portfolio in a taxable account to a retirement portfolio efficiently, and considerations when incorporating international (non-U.S.) funds. Links:Three Ingredients Article:  Three Secret Ingredients of the Most Efficient Portfolios – Portfolio ChartsMerriman ETF Recommendations:  Best-in-Class ETF Recommendations | Merriman Financial Education FoundationAmusing Unedited AI-Bot Summary:Unlock the secrets of do-it-yourself investing with Risk Parity Radio, where listener queries drive our exploration of effective financial strategies. Ever wondered how to craft a risk parity portfolio as you approach retirement? We tackle this and more, including navigating the world of taxable accounts, minimizing taxes, and managing significant expenses like a house down payment. Melissa's email about a broken Ray Dalio link becomes an opportunity to explore alternative resources, while Mark's playback issues on Apple Podcasts spark our gratitude for community feedback. You'll also discover the nuances of transitioning to a risk parity portfolio without opening new accounts, and the surprising overlaps between VTI and VUG.Ready to rethink international diversification? While some portfolios skip international funds, they still provide global exposure through assets like global value-tilted funds and Chinese A shares. We discuss why this approach might suffice, as international funds often mirror US stocks, especially in large caps. Instead, our focus shifts to balancing value, growth, and size using small-cap value funds from Avantis or DFA. With flexible templates and key diversification metrics, you'll learn to construct a robust portfolio without getting lost in geographic diversifications. Tune in, and reshape your investing toolkit with practical insights and empowering strategies.Support the show

In this episode we answer emails from Jenny, Arun and Jeff.  We discuss setting up a risk parity style portfolio for an elder relative, what to do with 529 money and college funds when you are getting close, and the use of risk parity style portfolios for intermediate goals or accumulation.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 Earn & Invest Podcast:  Why Risk Matters w/ Frank Vasq - Earn & Invest - Apple PodcastsValue Stock Geek's Weird Portfolio:  Weird Portfolio – Portfolio Charts Jared Dillian And The Awesome Portfolio:  Show Us Your Portfolio: Jared DillianFather McKenna Center Donation Page:  Donate - Father McKenna CenterAmusing Unedited AI-Bot Summary:  What if you could unlock the secrets of risk parity and transform your investment strategy? Join us on Risk Parity Radio as we explore how strategic gold allocation and portfolio diversification can revolutionize your financial journey. Dive into the humor-laden world of market fluctuations and portfolio reviews, and learn from our recent discussion on the Earn and Invest podcast with Jordan Grumet about integrating risk parity into modern portfolio theory. We also respond to a thoughtful email from Jenny, a dedicated Patreon supporter, who's crafting a risk parity portfolio for her mother-in-law. Get insights on asset allocation, the timing of gold investments, and how to utilize current market conditions to make savvy decisions.In this episode, we delve into diversifying investment strategies during the accumulation phase, particularly for DIY investors like Jeff, a mid-40s Gen Xer contemplating a 401k rollover. Explore a variety of strategies, including Tyler's Golden Butterfly, the Weird Portfolio by Value Stock Geek, and Jared Dillian's Awesome Portfolio. Discover how these can complement ventures in real estate or business, and draw inspiration from Bruce Lee's philosophy to tailor an approach uniquely your own. Whether you're a novice or a seasoned investor, expect to walk away with practical advice and fresh perspectives to enhance your financial strategy.Support the show