Risk Parity Radio

Episode 399: A Good Deed Shining In A Weary World, Thoughts On Hoarding, Preferred Shares, Gold And Portfolio Reviews As Of January 31, 2025

• Frank Vasquez • Season 5 • Episode 399

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In this episode, we celebrate Ground Hog Day and answer emails from Ron, Jay and Pete.  We discuss the value of giving and the new McKenna Man portfolio that Ron is constructing, preferred shares vs. REITs, holding gold, what financial advisors really think about their hoarding clients but can't say in front of them but I will, and Pete's risk parity style portfolio and his 6-year old's potato chip gambling problem. 

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 Center

Dennis And The McKenna Center Team:  Our Team - Father McKenna Center

Andy Panko Interview of Eric Niergarth: 
Retirement planner chat, with Eric Niergarth from Retirement Roadmap Financial Planning

Pete's Fund and Correlation Analysis:
https://testfol.io/analysis?s=4Qh1xI3JKMl

Amusing Unedited AI-Bot Summary:

Unlock the secrets of alternative investments and discover a fresh perspective on asset allocation with Risk Parity Radio. Ever wondered how creative financial strategies can transform charitable giving? Listen in as we highlight Ron, a dedicated listener, who proposes an innovative approach to support the Father McKenna Center in Washington, D.C. We'll dissect his all-equity portfolio idea, and explore an alternative inspired by the Rick Ferri Core 4 portfolio, tailored for an 8% withdrawal rate. This episode promises to inspire with its blend of community-focused financial creativity and solid investment insights.

Curiosity piqued? Learn why PFFV trumps PFF in cost-effectiveness and tax benefits, especially for those in higher tax brackets. The episode tackles listener questions head-on, like the VNQ versus PFF debate, and shines a light on the essential role of gold in diversification. A personal tale unfolds as I recount my unexpected removal from Andy Pankow's Facebook group, sparking a discussion on the dynamics of online financial communities. This engaging narrative provides a nuanced view of maintaining a steady allocation amidst the ebb and flow of digital interactions.

Explore the lighter side of finance as we analyze the performance of various portfolios in a quirky review of January's market highlights. With imaginative requests, like a breakfast order for the "bacon man," and the intriguing concept of combining Bitcoin and gold in an ETF, this episode offers both entertainment and education. From the conservative All Seasons to the experimental Golden Ratio, each portfolio reveals unique allocations and outcomes. Join us on this enlightening journey through investment strategies, and uncover the unexpected joys of charitable giving through creative financial planning.

Support the show

Voices:

A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.

Uncle Frank and Voices:

If a man does not keep pace with his companions, perhaps it is because he hears a different drummer.

Mostly Mary:

A different drummer 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:

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.

Voices:

Yeah, baby, yeah.

Mostly Uncle Frank:

And the basic foundational episodes are episodes 1, 3, 5, 7, and 9. Some of our listeners, including Karen and Chris, have identified additional episodes that you may consider foundational, and those are episodes 12, 14, 16, 19, 21, 56, 82, and 184. Whoa, and you probably should check those out too, because we have the finest podcast audience available.

Mostly Mary:

Top drawer, really top drawer.

Mostly Uncle Frank:

Along with a host named after a hot dog.

Voices:

Lighten up Francis.

Mostly Uncle Frank:

But now onward to episode 399.

Voices:

Today on Risk Parody Radio, it's Groundhog Day, get up and check that hog out there. Yeah, sweet, sweet groundhog.

Mostly Uncle Frank:

And when we get done looking at the groundhog, we are also going to do our weekly and monthly portfolio reviews. Of the eight sample portfolios you can find at wwwriskparityradiocom on the portfolios page.

Voices:

Boring.

Mostly Uncle Frank:

Yeah, I know that's not as exciting as looking at a groundhog looking at its shadow, but it is what it is when Chekhov saw the long winter.

Uncle Frank and Voices:

he saw a winter bleak and dark and bereft of hope. Yet we know that winter is just another step in the cycle of life. But standing here among the people of Punxsutawney and basking in the warmth of their hearths and hearts, I couldn't imagine a better fate than a long and lustrous winter. From Punxsutawney, it's Phil Connors.

Mostly Uncle Frank:

So long.

Uncle Frank and Voices:

But before we get to that, I'm intrigued by this how you say E-mails.

Mostly Uncle Frank:

And First off.

Uncle Frank and Voices:

First off, we have an e-mail from Ron it started as an experiment, but the professor soon discovered he couldn't be a papa without a mama, so he hired a housekeeperkeeper, and then the fun began.

Mostly Uncle Frank:

It's a monkey and Ron writes Hi Uncle Frank and Aunt Mary.

Mostly Mary:

I've been listening to you since the start and have a recurring annual donation to the Father McKenna Center from my donor advised fund.

Voices:

Yeah, baby, yeah.

Mostly Mary:

However, that fund is growing faster than the donations I make, so I'd like to propose a ninth portfolio that I will manage whose distributions will go to the Father McKenna Center. I have about $5,400 in my donor advised fund currently, but there are very limited investment options. There are only five index fund-based options. The rest are managed Total Market Index, SWTSX, Small Cap Equity Index, SWSSX International Equity Index, TCIEX, a TIPS index fund Aggregate bond index. My proposal is to make a ninth sample portfolio that is all equity, to see how an accumulation portfolio would do during drawdown. I currently have 70% total market, 20% small cap, 10% international. I propose an 8% annual withdrawal rate, Too high.

Mostly Mary:

If you'd like to recommend something else, feel free. Just give me the percentages and a withdrawal rate and I'll set it up. Also, please let me know if the center would prefer monthly, quarterly or annual donations. It dawned on me how much influence you've had in my financial education and I wanted to do something to show my appreciation to you. I'm sure all your listeners would agree. I'd be happy to give you annual portfolio reviews for your amusement, but I'm not doing that weekly. It's not that I don't care, it's just that I'm lazy. Thanks, Ron.

Uncle Frank and Voices:

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

Mostly Uncle Frank:

The thing is, bob, it's not that I'm lazy, it's that I just don't care. Well, what can I say, ron? Wow, I am really grateful for what you're doing, not only for the money itself, but also the creative way you are approaching this, because it will allow me to bring even more attention to this charity in the context of this podcast.

Voices:

The best, Jerry the best.

Mostly Uncle Frank:

And for the three of you out there that don't know, this podcast does not have any sponsors, but it does have a charity we support. It's called the Father McKenna Center and it supports hungry and homeless people in Washington DC. If you donate to the center, you get to go to the front of the line. There are two ways to do that. You can do it through the Patreon page at wwwriskparityraidercom I should say the support page that leads to Patreon or you can donate directly at the Father McKenna website on their donation page. Either way, you go to the front of the line. Ron is cementing his permanent place at the front of the line, the VIP entrance, as it were.

Mostly Mary:

Top drawer, really top drawer.

Mostly Uncle Frank:

And we'll also have an interesting experiment here that we can run. So your proposal is 70% total market, 20% small cap and 10% international for a 100% equity portfolio, and I think that works fine. An alternative suggestion would be something that looks kind of like a Rick Ferry Core 4 portfolio without the bonds in it, so it's Core 3, and that would look like 60% total market, 30% international and 10% small cap, with small cap taking the place of REITs in the Core 4. But either one would be fine.

Mostly Uncle Frank:

And regarding the 8% annual withdrawal rate, I don't think that's too high for this kind of thing we're doing here, since we don't need to actually preserve the corpus if it does happen to blow up, and I find that would make an interesting experiment, because that is like that Dave Ramsey number. He's saying you could take 8% out of your portfolio all the time. So we might as well subject this one to that treatment just to see how it fares. And if you send me a screenshot of it after you set it up, I will put it on the portfolios page with a little description of what it is and why we're doing it, with credit to you, of course.

Voices:

Yes.

Mostly Uncle Frank:

As for the frequency of the withdrawals, I'll just leave that up to you. We accept donations year-round. Yes, I do credit some of you listeners for making that happen. We've been running at a deficit the past few years here and we are trying to remedy that. So everything that you can give helps, whether that's monthly, quarterly, annually or some other rate of contribution.

Mostly Uncle Frank:

I would like to call this the McKenna man Portfolio, and that title has meaning at the McKenna Center portfolio and that title has meaning at the McKenna Center.

Mostly Uncle Frank:

A McKenna man is somebody who has come through the center and been able to reclaim their life through both the help of the center and their own work on themselves. Our current director actually is a McKenna man, somebody who I went to law school with back around 1990, although we did not know each other at the time, back around 1990, although we did not know each other at the time. So our executive director, Dennis, had a career in law and investment banking and all those high-powered circles, but he developed a problem with alcohol and ended up on the street because of it. So he came through the center over a decade ago and was able to reclaim his life and has been working in social services ever since, first in Chicago and now to come and be the director of the center. And so I appoint you, Ron, to be the keeper of the McKenna man portfolio, with all the accoutrements that comes with. And if you send us information about it periodically, we can talk about it on the podcast and we can put a few things on the website.

Mostly Mary:

Oh, boy is this great.

Mostly Uncle Frank:

And I really want to thank you again for your idea and your appreciation. It is like the cherry on top of everything we do around here, and so thank you very much for everything you are doing for us and thank you for your email.

Uncle Frank and Voices:

So shines a good deed in a weary world.

Voices:

Second off.

Mostly Uncle Frank:

Second off, we have an email from Jay.

Voices:

Second off, we have an email from Jay. Now you can call me Ray, or you can call me Jay, or you can call me RJ, or you can call me RJJ, or you can call me RJJ Jr.

Mostly Uncle Frank:

And Jay writes.

Mostly Mary:

Hi, I've interacted with you a couple times on Andy Pankow's retirement group. I'm getting ready to retire next year and I've set up a portfolio after running it through portfolio charts. Having set it up, I'm considering modifying it. For one, I currently have 12% VNQ, but I'm considering swapping that out for PFF, since it has a higher yield, which I like for this part of my portfolio and seems to be a little less volatile than VNQ. Second, I have 10% gold, but I heard you say that gold is very volatile, so you should build up a position gradually. I just went ahead and bought all my gold shares at once. Since gold has gone up so much, I'm considering cutting it back to 5% and adding another 5% down the road. On the other hand, the reasons for holding gold at all seem pretty salient right now, and I'm reading that the fundamentals are still good. I'd be curious as to your thoughts on these two questions.

Mostly Mary:

I just started listening to your podcast. I've jumped around a bit to listen to the episodes that most interest me and I'll continue working my way through them. I don't know if you respond to questions via email or on the show, If you respond to questions via email or on the show. If you respond, I'll be very grateful, and I'm very grateful for the podcast. I'm finding it very informative so far. Also, thanks for your contributions to the Facebook group. I've missed you lately. Have you dropped off?

Voices:

But, you doesn't have to call me Johnson, I don't get it.

Mostly Uncle Frank:

What are they laughing at? Well, I'm glad you're enjoying the podcast, jay, and thank you for writing in. Let's get to your questions first and then we'll start talking about that Facebook group. I have some interesting thoughts about that. Now, regarding your swap of VNQ for PFF and you might consider PFFV instead of PFF, because it's a little bit cheaper and I think it does the job just as well or better. Yes, you're going to have a lower volatility and lower overall return experience with the preferred shares fund than you will with VNQ.

Mostly Uncle Frank:

Vnq is REITs but it's part of the stock market. But it's part of the stock market, so you would expect that over time it will perform in terms of returns about like the stock market with about the same volatility. The reason you hold REITs separately is because you are hoping that they are going to perform differently at different times from the rest of the stock market. So you get that diversification benefit, but you're not expecting it to perform any differently than the rest of the stock market over long periods of time.

Mostly Uncle Frank:

Preferred shares are a slightly different animal in that they are equities but they are bond-like. So a preferred shares fund typically has about half of the volatility of the stock market, but also lower returns overall, and those returns are paid out mostly as dividends. The reason those dividends are much better than, say, you would get from a REIT, though, is because those are qualified dividends coming out of preferred shares, whereas most of the income coming out of a REIT would be taxable, ordinary income. So, to the extent you have a choice in a taxable account, in particular, the preferred shares make a whole lot more sense, particularly if you're in a higher tax bracket. If you have REITs, you probably want to put them in your traditional retirement account. Now, moving to gold.

Uncle Frank and Voices:

I love gold.

Mostly Uncle Frank:

Gold, as we know, is a very hot and shiny topic these days, as it's making new, all-time highs.

Mostly Mary:

a very hot and shiny topic these days, as it's making new all-time highs. This is gold, mr Bond.

Mostly Uncle Frank:

But the reason you hold it is not for its expected return so much which are going to be between stocks and bonds historically but because it's diversified from both stocks and bonds and therefore tends to reduce the overall volatility of your portfolio. Gold is no more volatile than the stock market overall, but it does have periods of greater volatility and lesser volatility. And I'm not sure I've ever said you should or must build your position gradually. But it's, just as a practical matter, easier for most people if they don't hold any gold to start building it up gradually by directing future investments into it. But there's nothing to say. You can't just go straight to whatever allocation you're planning on holding.

Mostly Uncle Frank:

The idea here is to pick that allocation and then just stick with it. So I would not be cutting and adding or doing anything else like that to try and time the market there, because it really is a very long-term holding. And I'm just thinking about this because I've held a substantial amount of gold in ETF form for over a decade now, and I remember in the last decade where gold skeptics were saying, well, it doesn't perform well anymore, it's had its day, and see how poorly it's performed recently, whereas now the same skeptics are saying well, it's performed really well recently, but you know, past performance isn't indicative of future results, so you can't count on that, do you think anybody?

Voices:

wants a roundhouse kick to the face while I'm wearing these bad boys. Forget about it.

Mostly Uncle Frank:

So people just make up stories to support. Whatever their emotional feelings are about gold, I think you should be very unemotional about it. Simply observe that it works well as a diversifier in a drawdown portfolio and use it that way. You'll see that we are actually selling some gold out of our portfolios to pay for distributions next month, because it certainly has been the best performer this year so far and one of the best last year too. So if you want to have 10% and it's easy to get into that position it sounds like you're already there then I would just maintain that position and rebalance in or out of it, depending on whether it's going up or down relative to your other assets.

Mostly Uncle Frank:

And now, last but not least, let's talk about Andy Pankow's Facebook group. I think it's called Retirement Planning and Education, and the truth of the matter is they kicked me out of that group. Surely you can't be serious. I am serious and don't call me Shirley. They never told me why. It could have been a mistake, for all I know, but it probably was for the best, because I have a habit of speaking my mind.

Uncle Frank and Voices:

Are you saying that I put an abnormal brain into a seven and a half foot long, 54 inch white?

Voices:

gorilla. Is that what you're telling me?

Mostly Uncle Frank:

and I say things that other people are thinking, and the truth is that a good portion of that group, or the participants in that group, are people with hoarding problems donate to the children's fund.

Voices:

Why would a children ever done for me?

Mostly Uncle Frank:

And so you would often see a typical post of somebody saying I've got these $5 million in invested assets. I'm only spending $100,000 a year. And then they'll say something like do you think I'm going to be okay? And also, which of these eight choices should I make for my cash holdings? Should I do a CD ladder? Should I do some I-bonds? Should I keep it in a savings account?

Voices:

When I grow up, I want to be a principal or a caterpillar.

Mostly Uncle Frank:

And a lot of nonsense. And the answer is you should stop fiddling around with your money like it's Tinker Toys or something.

Voices:

Why do people run from me?

Mostly Uncle Frank:

It's like we're on the Good Ship Lollipop and you feel a need to rearrange the lollipops by color every year. You should stop doing that and think about what your money is actually for and when you plan on spending it and how you plan on spending it, because spending 2% of your assets is not a spending plan, it's a hoarding plan.

Voices:

You can't handle the truth.

Mostly Uncle Frank:

And I would express that sentiment out loud in that group. And it got me into a lot of hot water, a lot of angry retorts. I know you are, but what am I? I know you are, but what am I? I know you are, but what am I? I know you are, but what?

Voices:

because these same people are also looking for affirmation, more than they are looking for information.

Mostly Uncle Frank:

They've never graduated from being the little boy getting a pat on the head for saving his pennies in a jar.

Voices:

But here's the funny thing from being the little boy getting a pat on the head for saving his pennies in a jar, I dress myself.

Mostly Uncle Frank:

But here's the funny thing the people that run that group actually agree with me, although they're not as vocal about it. And they can't be as vocal about it because those same people are their ideal clients. If you were a financial advisor, you really would love to have somebody that is over-saved and is not spending their money.

Voices:

A guy. Don't walk on the lot lest he wants to buy, sitting out there waiting to give you their money. Are you going to take it?

Mostly Uncle Frank:

Particularly if you take AUM although I know Andy and people in that group are not AUM kind of advisors for the most part. But how do I know they agree with me Because they've said so? If you listen to a lot of podcasts with financial advisors talking to other financial advisors. This is what they say about their clients and their lament that their clients are hoarders. There's a good example of this. Andy Pankow interviewed Eric Neergarth Hope. I pronounced that correctly, I don't know, it was last month. I'll link to this in the show notes, but if you go to like the last 15 minutes of this, I think Eric says the most frustrating part of the job of being a financial advisor is having these people that will not spend their money. They're hoarders and there are particularly two reasons that they point to as reasons for hoarding. One is simply just fear, which could be based on some past history in the family or something, but the other is more insidious that it is part of their identity hoarding the money.

Voices:

Are there no prisons?

Uncle Frank and Voices:

Are there no workhouses? Are there no prisons, prisons? Are there no workhouses? Are there no prisons?

Mostly Uncle Frank:

and I have no compunctions of calling those people out. You are not living your best life if you're hoarding money and that it's your identity. That, in fact, is one of the four idols you're not supposed to be worshiping. The four idols are money power supposed to be worshiping. The four idols are money power, fame and pleasure-seeking, like drugs, alcohol, gambling, that sort of stuff. We know for a fact that if you want to get the best out of your money, there are four things you actually need to spend it on. This is from Daniel Crosby's recent book the Soul of Wealth. He's a behavioral finance guy. He's written a whole bunch of stuff, and those four things are relationships, experiences not just things like travel, but things like hobbies and creative endeavors. The third one is work avoidance paying other people to do things you don't want to do, so you get your time back.

Voices:

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

Mostly Uncle Frank:

And the fourth one is what I like to refer to as red hot chili pepper pie Give it away, give it away, give it away now. Never been a better time than right now, which is charity, both formal and informal, random acts of benevolence, if you prefer.

Mostly Uncle Frank:

I want to try to help you to raise that family of yours, if you'll let me. And so if your behavior is actually hoarding money, you're worshiping the money idol. You're not spending the money on the things that are going to get you the best satisfaction out of life. So you're not living your best life, you're just not.

Voices:

Forget about it and I'm sorry if that hits you hard, makes you upset, but that's the truth.

Mostly Uncle Frank:

You can't handle the truth. But getting back to this conversation between Andy and Eric, andy was saying that more clients than not, more of his clients than not, can definitely spend more money and that a number of them have total withdrawal rates of 2% or less of their portfolio.

Voices:

There's only one use for money, and that's to make more money.

Mostly Uncle Frank:

Just like this person that I mentioned that has $5 million and is spending $100,000 out of it, and Eric and Andy both lamented that they were unable to convince these hoarding clients to spend more of their money and they feared that they were going to regret it on their deathbeds, and that is the most frustrating thing about being a financial advisor. According to those two and according to many other conversations I've heard, if you listen to the Michael Kitsis podcast, it is actually directed at financial advisors and what they do. This frequently comes up as the main problem that financial advisors have with many of their clients is they can't get them to actually spend the money. But, as you can imagine, they are very constrained from saying that in any group of clients or potential clients, because it is a deep criticism of their behavior and it's bad for business to be talking like that if you want business from people that have hoarded a lot of money.

Voices:

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

Mostly Uncle Frank:

But you can see why. Then it is the major frustration that financial advisors have with clients. They can't say what they're really thinking. I don't have that problem.

Voices:

The beatings will continue until morale improves. Daddy is home.

Mostly Uncle Frank:

Because my bread is not buttered there, so I can say whatever I darn well, please, and I do.

Voices:

No more flying solo. You need somebody watching your back at all times.

Mostly Uncle Frank:

Which rubs people the wrong way sometimes and in this case, got me kicked out of a group, I believe, unless it was just an accident, but it's probably just as well. You can still find me in the ChooseFI group on Facebook and the Catching Up to Fi group on Facebook. That is essentially 90% of the social media I use, because I just don't want to be dealing with a lot of other social media and I have no real need to promote this podcast because I'm not making a living off of it. It's a creative endeavor for fun.

Voices:

I don't think you're happy enough. That's right. I'll teach you to be happy. I'll teach your grandmother to suck eggs.

Mostly Uncle Frank:

Now, boys and girls, let's try it again now, boys and girls, let's try it again, and I will tell you. The other reason that I tend to speak my mind about these things is because one of the five regrets of the dying that bronnie ware wrote about is people regret not being themselves and saying what they thought when it needed to be said. So my whole theory of living a good life is to reverse the five regrets of the dying. So I'm not likely to have them, and so that manifests itself by rubbing people the wrong way sometimes, particularly on topics like this, because personal finance, in my mind, is still finance first and only personal second. And if your personal part is irrational, I don't have any compunctions about telling you it is, and maybe that'll make you mad and maybe it'll help you live a better life than you're living right now. Hopefully the latter.

Voices:

Bow to your sensei. Bow to your sensei.

Mostly Uncle Frank:

But thank you for stopping in, Jay, raising these topics, and thank you for your email.

Uncle Frank and Voices:

Hey Johnson. Oh you for your email, hey Johnson. Oh, you doesn't have to call me Johnson.

Voices:

Okay, see, you're laughing, but I don't know why, because you doesn't have to call him Johnson.

Mostly Uncle Frank:

Hey man, look, see you didn't get annoyed because, man, I've got this dang old name man, so you can't call me Johnny.

Uncle Frank and Voices:

You don't have to call me Sonny, it's June 2, man.

Voices:

And then what? What more would you?

Voices:

need yeah, oh, man Last off.

Mostly Mary:

Last off an email from Pete, and Pete writes Addendum Over the holidays, I dug deeper and decided to forego both IMTM and EMQQ. I couldn't get over my distaste for a Momentum PurePlay and EMQQ sector concentration. Instead, I went with a split between China and India ETFs KBA and EPI respectively to complement my international small cap value ETF, avdv. Here's a link to a test folio analysis for correlations. Within it I included for comparison a US large cap growth ETF, iwy, and two-dimensional funds DFSVX and DISVX, to represent my AVUV and AVDV holdings, since they have longer track records than Avantis. Interestingly, both KBA and EPI not only have low correlation to IWY, but they also have significantly low correlations to both dimensional funds. For any listeners interested, I also considered FRDM, dfae and VWIGX, but ultimately went with KBA and EPI to best diversify my existing portfolio and EPI. To best diversify my existing portfolio, which is 65% equities split 80-20 between US and international, each of which is then split 50-50 between growth and value, another 15% in strips and intermediate US treasuries and 20% split evenly between gold and managed futures. In the grand scheme of things, this tinkering is meaningless as the allocation to each ETF is only 3.2500, repeating, of course, percentage. But it adds a bit of symmetry to the portfolio that my obsessive compulsion demands. My six-year-old, on the other hand, has decided to add 3% Bitcoin to season his 150% leveraged equity portfolio within his IRA, but he also dunks potato chips and yogurt and insists on wearing a swim cap and goggles whenever we go grocery shopping. So take his recommendations with a grain of salt.

Mostly Mary:

Anywho, hope you had a relaxing holiday. From my family to yours, we hope you have a happy and healthy new year. Deo presso liber Pete.

Voices:

There's nothing as sociable as a nice cup of tea. I always say how many lumps do you want?

Voices:

Oh, three or four.

Mostly Uncle Frank:

Well, just to put this in context, this is a follow-on to the email we had from Pete in episode 394, where we were talking a lot about growth funds in particular. It doesn't sound like you really have a question and I don't want to rehash all that, but I think it is an interesting example here of what Pete has constructed as a good portfolio for drawing down with. And you see, he's got 65% in equities, split 80-20 between US and international. Each one of those is split 50-50 between growth and value. So that does hit the sweet spot for what we know about portfolios with high safe withdrawal rates. Spot for what we know about portfolios with high safe withdrawal rates that they have somewhere between 40 and 70% in equities, that they have a 50-50 split between growth and value in the equities. And then he's also hit the sweet spot with the bonds, which he's got 15% in strips and intermediate US treasuries. That plays out to somewhere between 20 and 30 percent when you consider the durations involved, and then 20 percent in alternatives and the sweet spot there is somewhere between 10 and 25 percent. So this is exactly the kind of thing I would hope you'd be able to use the information from this podcast to do to construct your own drawdown portfolios which are more or less aggressive to your taste. And yes, a lot of the tinkering we do is meaningless. But if you enjoy it on some level and it's not hurting, you go ahead and tinker away with a few funds around the edges there.

Mostly Uncle Frank:

Now, your six-year-old definitely has a budding gambling problem these Bitcoin extravaganzas. You have a gambling problem. There, uh, is an interesting new fund. I don't know how new it is. It's an etf with ticker symbol btgd, and it is bitcoin and gold together. Basically, you get 100 of the bitcoin and 100% of the gold. It does have a very high expense fee around 1%, I think but if you're looking for something to gamble with, you might consider that. I'm sure every six-year-old needs some of that, along with their potato chips and yogurt.

Uncle Frank and Voices:

I'll have the smiley face breakfast special, but could you add a bacon nose plus bacon hair, bacon mustache, five o'clock shadow made of bacon bits and a bacon body.

Voices:

How about if I just shove the pig down your throat? Fine, but the bacon man lives in a bacon house. No, he doesn't.

Mostly Uncle Frank:

Anyway, we did have a nice holiday. I hope you did too, and happy New Year as well, and Happy Groundhog Day. It's Groundhog Day, and thank you for your email. Now we're going to do something extremely fun, and the extremely fun thing we get to do now is our weekly portfolio reviews of the eight sample portfolios you can find at wwwriskpartyradarcom on the portfolios page. We'll also talk about our distributions for February from the portfolios. But just looking at the markets for the month of January, the S&P 500, represented by VOO, is up 2.69% for the month. Nasdaq, represented by QQQ, is up 2.16% for the month. Nasdaq, represented by QQQ, was up 2.16% for the month. Small cap value, represented by the fund VIOV, was up 1.87% for the month. Gold was the big winner last month.

Voices:

That's gold, jerry gold.

Mostly Uncle Frank:

Representative fund GLDM was up 6.71% for the month.

Voices:

Gold finger.

Mostly Uncle Frank:

Long-term treasury bonds, represented by the fund VGLT, were up 0.95% for the month. Reits, represented by the fund REET, were up 1.46% for the month. Commodities, represented by the fund PDBC, were up 2.46% for the month, represented by the fund PDBC, were up 2.46% for the month. And preferred shares, represented by the fund PFFV, were up 1.6% for the month. And finally, managed futures, represented by the fund DBMF, managed to be up 1.19% for the month. Much better month in January than it was in December, especially if you own some gold, and we do.

Voices:

You're insane gold member and that's the way. Uh-huh, uh-huh, I like it. Okay, see you on the sunshine bud.

Mostly Uncle Frank:

Now looking at these portfolios, these sample portfolios. First one is a reference portfolio called the All Seasons. It is only 30 percent in stocks and a total stock market fund, 55 percent in intermediate and long-term treasury bonds and 15 percent in gold and commodities. It was up 1.99 percent for the month and year to date and is up 10.72 percent since inception in july 2020. For the month of february, we be withdrawing $31 out of accumulated cash. That will be $62 for the year so far and $1,752 since inception in July 2020.

Mostly Uncle Frank:

Now moving to our bread and butter kind of portfolios. First one's golden butterfly. This one's 40% in stocks and a total stock market fund and a small cap value fund, 40% in treasury bonds, divided into long and short, and 20% in gold GLDM. It was up 2.6% for the month and the year to date and is up 37.4% since inception in July 2020. For February, we will be distributing $46 from GLDM, the gold fund. That is at a 5% annualized rate. I should have mentioned the first portfolio is taking distributions at a 4% annualized rate. This one's 5%, that'll be $91 year-to-date and $2,392 since inception in July 2020. Next one's golden ratio since inception in 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 long-term treasury bonds, 16% in gold, 10% in managed futures and 6% in cash, from whence we take the distributions a money market fund actually. It was up 2.27% for the month and the year to date and is up 32.9% since inception in July 2020. We'll be taking $44 from that cash for the month of February. That will be at a 5% annualized rate. It'll be $87 year-to-date and $2,348 since inception in July 2020.

Mostly Uncle Frank:

Next one's the risk parity ultimate kind of the kitchen sink portfolio where we throw all kinds of things, including a little Bitcoin and Ether. I won't go through all 15 of these funds, but it was up 2.38% for January and year-to-date and is up 22.9% since inception in July 2020. We'll be taking $40 out of cash accumulated cash for February. That's at a 5% annualized rate. That'll be $79 year-to-date and $2,429 since inception in July 2020. And almost all these portfolios started with $10,000. If you're wondering what that was Now moving to, these experimental portfolios started with $10,000. If you're wondering what that was Now moving to these experimental portfolios, which are often quite a roller coaster ride to behold, because they all involve leveraged funds and that's why they're experimental. So the first one is the accelerated permanent portfolio. This one's 27.5% in a levered bond fund TMF, 25% in UPRO, a levered S&P 500 fund, 25% in PFFV that's a preferred shares fund, and 22.5% in gold. It was up 3.8% for the month, month-to-date and year-to-date. It's up 4.87% since inception in July 2020. For the month of February, we'll be taking $39 out of accumulated cash. That's at a 6% annualized rate, so it'll be $78 for the year of 2025 and $2,708 since inception in July 2020.

Mostly Uncle Frank:

Next one's the aggressive 50-50. This is the most levered and least diversified of these portfolios. It is one-third in a levered stock fund UPRO, one-third in a levered bond fund TMF and the remaining third divided into preferred shares fund and an intermediate treasury bond fund. It was up 2.6% month-to-date and year-to-date, missing out on the gold rush. It is down 9.64% since inception in July 2020. For the month of February, we'll be taking $33 from cash. That's at a 6% annualized rate $66 year-to-date is the total and $2,735 since inception in July 2020.

Mostly Uncle Frank:

Next one is the levered golden ratio. This one is 35% in a composite levered fund called NTSX that's the S&P 500 and treasury bonds levered up 1.5 to 1. 25% in gold GLDM 10% each in a levered small cap fund, tna, and a levered bond fund, tmf, 15% in a REIT O and the remaining 5% in a managed futures fund, kmlm. It was up 3.99% month to date and year to date, so it did quite well, but it is down 0.61% since inception in July 2021. It's a year younger than the other ones. We'll be distributing $34 from the Gold Fund for February. It's at a 5% annualized rate. That'll be $67 year-to-date and $1,623 since inception in July 2021. And moving to our last one and newest one, the Optra portfolio One portfolio to rule them all. Yes, that's a joke, stop taking the hobbits to Isengard.

Voices:

Stop taking the hobbits to Iseng. Stop taking the hobbits twice. And God Rock it, you scum.

Mostly Uncle Frank:

This one is 16% in a levered stock fund, upro that's the S&P 500. 24% in AVGV, which is a worldwide value fund from Movantis. 24% in GOVZ, which is a treasury strips fund, and the remaining 36% divided into gold and managed futures. It was up 3.36% for January and, year-to-date, it's up 6.37% since inception in July 2024. We'll be taking $52 out of accumulated cash for February. That's at a 6% annualized rate. That'll be $102 year-to-date and $362 since inception in July 2024. And that concludes our weekly and monthly portfolio reviews, as scintillating as that was.

Voices:

Boring.

Mostly Uncle Frank:

They are off to a good start for the year. Whether that continues we shall see, but it was much better than December, and now I see our signal is beginning to fade. The next episode is number 400. I'm going to be doing something a little different with it. That will be kind of a bitter disappointment to my regular listeners who actually appreciate the sense of humor here, because it will not be that humorous you are talking about the nonsensical ravings of a lunatic mind but I know that a lot of you try to refer this podcast to other people who listen to it once and go away screaming in horror.

Mostly Uncle Frank:

So I'm going to be doing another one of my artificial intelligence experiments with podcasting and I'm taking the first five foundational episodes, which are episodes one, three, five, seven and nine and all of the links that went with those, and creating five new podcasts which I'm going to put all together and put into one mega episode, episode 400,. That will hopefully serve as an introduction to the topics that we talk about here. So I'm afraid it's going to be all stuff you've heard before, but I think it will be nice to have it all in one place as a reference episode, and I will include all of the links from the five episodes so that you have them all in one place for your convenience. In the meantime, if you have comments or questions for me, please send them to frankatriskparityravecom. That email is frankatriskparityravecom. Or you can go to the website, wwwriskparityravecom. That email is frankatriskparityravecom. Or you can go to the website, wwwriskparityravecom. Put your message into the contact form and I'll get it that way.

Mostly Uncle Frank:

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

Mostly Mary:

Give it away now. Give it away now. Give it away now. Give it away now. Give it away now. Give it away now. Give it away now. Give it away now. Give it away now. Give it away now. 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.

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