Risk Parity Radio

Episode 412: Market Turmoil, Guardrails Withdrawals, Useful UK Sites, Bonds, Small Caps And Portfolio Reviews As Of April 4, 2025

• Frank Vasquez

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In this episode we answer emails from Ron, Iain, an Anonymous Visitor and Mr. Data.  We discuss Ron's generosity and his variable or guardrails withdrawal strategy, some helpful British website references, what we use bonds for in these portfolio and how the TSP G fund fits into that, and small cap growth vs. small cap value stocks.  And some notes on recent market turmoil.

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:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Portfolio Charts Retirement Spending:  Retirement Spending – Portfolio Charts

Monevator Quilt Chart:  Asset allocation quilt – the winners and losers of the last 10 years - Monevator

Just ETF (UK) Page:  ETF portfolios made simple

Shannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio Charts

Amusing Unedited AI-Bot Summary:

Market crashes reveal the true value of diversification. While Professor Jeremy Siegel called last week's events "the worst policy mistake in US economic history in the last 95 years," properly structured portfolios weathered the storm remarkably well.

The recent market plunge shows exactly why risk parity strategies work—the S&P 500 dropped 13.3%, NASDAQ fell 17.2%, but our All Seasons portfolio remained flat for the year. This divergence creates powerful rebalancing opportunities that can enhance long-term returns.

Looking at performance across asset classes reveals a classic recession pattern: falling stocks, rising treasury bonds, and initial panic selling followed by differentiated recoveries. Long-term Treasury bonds (VGLT) are up 7.2% for the year, demonstrating their crucial diversification role during market stress. Gold, despite some wobbles, remains up 15.7% year-to-date.

The mathematical principle behind this outperformance is what Claude Shannon described as "Shannon's Demon"—when assets perform differently at different times, periodic rebalancing allows the portfolio to outperform any individual component. This explains why we maintain exposure to both growth and value styles, rather than trying to predict which will outperform next.

For DIY investors, this market correction offers valuable lessons about portfolio construction. Understanding why you hold each asset—whether for stability, income, or diversification—is far more important than chasing yields. The Golden Butterfly portfolio, with its balanced approach across stocks, bonds, and gold, is only down 1.78% year-to-date while continuing to provide consistent distributions.

Want to learn more about building resilient portfolios? Visit riskparityradio.com for sample portfolios and detailed resources, or email your questions to frank@riskparityradio.com.


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Voices:

A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. If a man does not keep pace with his companions, perhaps it is because he hears a different drummer, a different drummer.

Mary and Voices:

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 have just stumbled in here, you will find that this podcast is kind of like a dive bar of personal finance and do-it-yourself investing Expect the unexpected. There are basically two kinds of people that like to hang out in this little dive bar.

Voices:

You see, in this world there's two kinds of people.

Mostly Uncle Frank:

my friend, the smaller group are those who actually think the host is funny, regardless of the content of the podcast. Funny how? How am I funny? These include friends and family and a number of people named abby abby, someone abby who Abby normal.

Mostly Uncle Frank:

Abby normal. The larger group includes a number of highly successful do-it-yourself investors, many of whom have accumulated multi-million dollar portfolios over a period of years. The best, jerry, the best and they are here to share information and to gather information to help them continue managing their portfolios as they go forward, particularly as they get to their distribution or decumulation phases of their financial life.

Voices:

What we do is, if we need that extra push over the cliff, you know what we do Put it up to 11. 11, exactly.

Mostly Uncle Frank:

But whomever you are, you are welcome here. I have a feeling we're not in Kansas anymore. But now onward, episode 412. Today on Risk Parity Radio it's time for our weekly portfolio reviews of the eight sample portfolios you can find at wwwriskparityradiocom on the portfolios page, and we can also talk about April distributions. Just a little preview of that.

Mary and Voices:

And it's gone. Poof, uh, what it's gone, it's all gone. What's all gone. The money in your account, it didn't do too well, it's gone.

Mostly Uncle Frank:

Well, it wasn't quite that bad for us, but it was bad and this was a singularly bad week. I think Professor Jeremy Siegel from Wharton said that this was the worst policy mistake in US economic history in the last 95 years. I think he was referring to the Smoot-Hawley tariffs as the prior record holder.

Voices:

In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the anyone, anyone, the Great Depression, passed the anyone, anyone a tariff bill, the Hawley-Smoot Tariff Act, which anyone raised or lowered raised tariffs in an effort to collect more revenue for the federal government. Did it work? Anyone, anyone know the effects? It did not work and the United States sank deeper into the Great Depression.

Mostly Uncle Frank:

And stocks managed to drop 10% in two days, which I think is also some kind of a record Not one we really want to see any more of. But what can you say about all of this?

Voices:

Okay, turn it on.

Mostly Uncle Frank:

It's a piece of crap, it doesn't work well, I could have told you that, but let's put all that on hold for the moment and instead attend to some of your emails.

Voices:

And so, without further ado, here I go once again with the email.

Mostly Uncle Frank:

And First off, first off, an email from Ron.

Mary and Voices:

Joining me now is the man responsible for Popeil's pocket fisherman, the Vegematic, the smokeless ashtray and that spray paint for balding men. Please welcome folks, ron Popeil. And Ron writes. Portfolio is 100% equities, broken into 60% total market, 30% international and 10% small cap. Annual distribution of 8%. So 2% per quarter. Quarterly distributions at the beginning of each calendar quarter based on the balance at the end of the previous quarter. So in this case it will be based on the balance at close on 3-31-25. Annual rebalance in early January, since that's when I rebalanced to the current mix. 2025 quarter one distribution Balance on $1231.24, $5,223. Balance on $331.25, $5,113. 2025 quarter one distribution $102. Grants can only be in whole dollars. 2025 quarter one distribution $102. Grants can only be in whole dollars. 2025 quarter one return minus 2.1% gross before distribution, minus 4% net after distribution. Well, we're off to a rough start, but we're off while I have you.

Mary and Voices:

I wanted to know if you had any comments on my personal withdrawal strategy. I'm retired in my early 50s and I'm using a strategy I base loosely off the one you used for the leveraged sample portfolios. I took my starting balance at retirement let's say $10,000 for an example, and set a target of 4.5% If the balance goes down by 10% of the starting point, so $9,000, I reduce my rate by 25 basis points to 4.25%, and so on down for each 10% decrease to a minimum of 3.5%. However, if it goes up by 10% so $11,000, I ratchet up by 25 basis to 4.75, up to a max of 5.0 if it goes to 20% up. My portfolio is roughly 55%, 40% US, 15% international equities, 26% bonds, 12% private alternative, 7% gold. The only thing that I wonder about is that my starting point of $10,000 is fixed, so in 20 years it won't account for inflation. But do I care Thoughts? Thanks, ron.

Voices:

If you followed all the instructional material, you just said it and forget it.

Mostly Uncle Frank:

Well, first off, Ron, thank you for all your good work with the McKenna man portfolio.

Voices:

Yes.

Mostly Uncle Frank:

As most of you know, here we do not have any sponsors on this program, but we do have a charity we support. It's called the Father McKenna Center, and it supports hungry and homeless people in Washington DC. Ron has gotten creative with supporting the Father McKenna Center and has come up with a portfolio out of which he is distributing money on a periodic basis to the center, and so whenever he writes in about it, it's going to be the first email. How about that?

Voices:

Surely you can't be serious. I am serious, and don't call me Shirley.

Mostly Uncle Frank:

The reason it's called the McKenna man Portfolio is because a McKenna man is somebody that we refer to, who has come through the center as a homeless person and has been able to reclaim their life with the help of the center and our executive director. Our current executive director, dennis, is a McKenna man himself. We both attended Georgetown Law School around 1990 and went off into legal careers, and he worked for law firms and some investment banks, but at a certain point he had a problem with alcohol and lost it all and ended up on the street. But over the past 10 to 15 years he came through the center and has been able to reclaim his life and now works in social services, and so we brought him on as the new executive director in January of 2024. And he is someone I very much enjoy working with in my role as treasurer and head of the finance committee. But if you do give to the center, either the way that Ron has done or the more traditional way, you can go to the Father McKenna website and go to the donation page and just give there, or you can go to our support page at wwwriskprioritywaycom and become one of our patrons on Patreon. By the way, if you give to the center and tell me in your email, I will move your email to the front of the line, and so thank you once again for your support, ron.

Mostly Uncle Frank:

But now let's get to your questions. What you are talking about with your withdrawal strategy is basically what is known as a guard rails kind of strategy. The most popular ones of those are the Geithen-Klinger strategy or what is called the Kitsis Ratchet. These are described in the notes for the retirement spending chart at Portfolio Charts, which also allows you to model these kind of variable spending scenarios, and I would suggest you take your parameters here and go over there and check them out. What you will find generally is that these kind of strategies do tend to increase flexibility and your ability to spend money overall, even though there is a variable aspect to them involved, or I should say, because there's a variable aspect to them involved that you're willing to spend less money in certain years and not just more money every year. Morningstar has run these kinds of strategies in their sort of annual state of retirement report and found that they do tend to add one percent or more to a base safe withdrawal rate when implemented. So they certainly are a good idea if you can deal with the complexity of them a relative complexity of them.

Mostly Uncle Frank:

Now, as to inflation, we've talked about that at length in episode 336 and also more recently in episode 403. But if you are going to estimate inflation for retirement, you should start with the base rate for it, and there have been a number of studies run that basically show that a retiree, or really anybody that is over about 50, experiences inflation at less than the CPI usually 1% to 2% less than the CPI. And when Morningstar has run that kind of base rate in their calculations, they have found that it effectively increases the safe withdrawal rate by between 0.5% and 1%. Basically, what's going on there for most people is that the only thing that they have that is inflating at greater than the CPI is typically health care, and everything else on that CPI smorgasbord list of expenses tends to inflate at less than that. Our own experience over the past five years is our spending has been relatively flat overall and certainly down since all of our children are out of college now. So really I think the best way to assess this is to look at your own numbers over the course of years and see whether they are actually inflating or not, because personal inflation is more personal than just about anything else in personal finance and bears little resemblance to public figures like the CPI, because you have to remember that the CPI figures include people who are just spendthrifts and don't keep track of their money, but also includes people in the first half of life who are engaging in household formation and having children and naturally spending more money because they have more mouths to feed, if you will. So it makes sense that that average is actually going to be more than what retirees are likely to experience and what you should start with as a base rate.

Mostly Uncle Frank:

If you haven't calculated your own personal inflation rate and this is actually one of the key ways that people misuse retirement calculators Instead of using base rates, which is the core principle of good forecasting and good decision making, they do things that are cognitively biased, and the cognitive bias here is actually called the possibility effect. It's what if this happens? Or what if that happens, without any reference to whether something is likely to happen, equating mere possibility with likelihood or substantial probability. If you do that, you're just going to be making bad forecasting decisions. This is straight from Kahneman and Tversky. In order to make good forecasts, you need to start with base rates in whatever you're forecasting, whether it's your retirement, inflation, running a business, completing a project on time, whatever it is.

Voices:

I'm asking you to do that. But what's easy to do is what Easy not to do.

Mostly Uncle Frank:

And if you're not doing that, you are just doing it wrong. Forget about it. So you may want to go back to your never retirement calculator and fix that problem, if that is a problem for you. Anyway, thank you again for your support, ron and the wonderful McKenna man portfolio, and thank you for your email.

Voices:

You follow all instructions and you Set it and forget it, set it and forget it, set it and forget it. It's as simple as that, folks. Second off Second off.

Mostly Uncle Frank:

Second off we have an email from Ian.

Mary and Voices:

In your preparation for your examinations. If you don't do your revision properly, do you know what will happen?

Mostly Uncle Frank:

You shall not pass. And Ian writes.

Mary and Voices:

Hi Frank, I hope you are well. I continue to be both entertained and amused by your regular podcasts. I make you laugh. I'm here to fucking amuse you. What do you mean? Funny? Funny, how? How am I funny? You were kind enough to reply to my email in episode 386. For the benefit of your British listeners, you referenced UK content providers, pensioncraft, who I agree are good. I include a link here for a recent post from another UK blog called Moneyvator. They did a recent post on Asset Allocation Quilt the winners and losers of the last 10 years. I'm sending this as I thought you might be interested. It seems right up your street. The guys at Moneyvator seem pretty clued up, but putting this to you as a tribute, as you are the capo de copy of Risk Parity After All.

Voices:

Yeah, baby, yeah.

Mary and Voices:

You may or may not find this interesting, but we listeners would be interested in your thoughts and it might lead to some interesting discussion. Keep up the good work and thanks for all you do. All the best, ian.

Mostly Uncle Frank:

Well, thanks for sharing that reference, ian. I'm always kind of at a loss when people from outside the United States ask me for resources because I'm really not up on them. But I note that a lot of our British listeners seem to be more up on it than I am, and I'm glad when you share these things with us. So that quilt chart looked very interesting, I noted. I think gold was the third best performer over the past 10 years, at least in pounds, and I think that that's generally true for a lot of currencies that are not the US dollar. For the few of you who don't know what a quilt chart is, it basically looks at a group of assets and then ranks them by performance for a series of years. Usually you'll see a 10-year quilt chart with 10 assets in it, but you can see over time how different assets rise to the top or fall to the bottom.

Mostly Uncle Frank:

Now I had seen in the past couple of months another site with a whole bunch of different quilt charts that ranked various different assets and different time frames, including one that was a quilt chart by decades. I haven't been able to refine that. I will link to it. If I ever do again. I'm sure I will run into it at some point. I also noted that there was a link on this Munivator site to something called Just ETF, which is also British-based and talks all about ETFs. I will link to that in the show notes as well. That looked like a very useful site for people looking for particular ETFs that do particular things or just explaining the concept of them to people outside the US. So I'll put these links in the show notes so people can check them out, and thank you for your email.

Voices:

You shall not pass.

Mostly Uncle Frank:

Next off, we have an email from the mysterious visitor number 7314, who did not provide a name.

Voices:

I have no name. Well, that right there may be the reason you've had difficulty finding gainful employment.

Mostly Uncle Frank:

And our anonymous visitor writes.

Mary and Voices:

I see that most of your portfolios suggest using long and short-term treasuries. I have access to the G Fund, also known as the Government Securities Investment Fund, which pays investors the higher yield that comes from longer-term US government bonds, but does so without the risk of their day-to-day market price fluctuations. Is this a good option for replacing long and short-term treasury bonds?

Mostly Uncle Frank:

Yes, the G fund in the TSP lineup is a good short-term bond fund and so, to the extent you would need an allocation to short-term US government bonds, you can certainly use the G fund. However, you would not use that as a substitute for long-term bonds, because it's doing something different. If you want to listen, listen to Bond episodes, go back and listen to episodes 14, 16, 64, and 69. And what you will learn in a nutshell is that you can essentially use bonds for three things. One is stability, as in they don't go up or down very much and pay something. Another one is income, where you actually are trying to get a high income out of the bond. And the third one is diversification, where you are trying to select bonds that are the most diversified from the other assets in your portfolio.

Mostly Uncle Frank:

Now, we do not use bonds for income in these kind of portfolios. We're only looking at bonds for stability and diversification. If you were using bonds for income, you might actually pick something like a preferred shares fund instead of the bond fund, because it pays at a high rate and it also pays a qualified dividend. But the reason we primarily do not look to bonds for income is that what we are interested in with respect to the returns of assets is their total return, not what income they pay off, good, because we live in an era of no-fee trading. So you would actually prefer your asset to not pay income and just keep the money in the asset, retain it, which would make the price go up, and then be able to sell it periodically and only pay the taxes when you sell it. So having income coming out of an asset is not an advantage. In fact it's a disadvantage in many cases, because the first word that comes after income is taxes.

Mary and Voices:

That's not an improvement.

Mostly Uncle Frank:

So, as a proposition, we know that bonds are not going to have total returns that are going to exceed stocks, so we are not holding bonds ever for their return profile or their income. We are only going to hold them for stability or diversification, in which case the amount of income they're paying is not their key factor. The key factor when you're talking about stability and diversification is the duration or length of the bonds at issue. If you have short duration bonds or things like T-bills, those are very stable, but they don't offer a whole lot of diversification. They're basically inert. They don't go up, they don't go down, regardless of what other assets do.

Mostly Uncle Frank:

If you want diversification out of bonds, you typically have to go out on the duration spectrum and look at only the highest quality bonds, which are US Treasury bonds, and those happen to be the bonds that are the most diversified from stocks, whether those be US stocks or foreign stocks. And we're actually seeing that play out this week, with bonds being one of the things. Particularly long-term bonds increased in value last week while stocks were falling in value, which is going to create some rebalancing opportunities in the near future. So whenever you're thinking about holding bonds, you first need to know why you are holding them, and I suggest it's certainly not for their return profile, because if you wanted a higher return profile, you'd hold stocks or something else. You would not hold bonds.

Mostly Uncle Frank:

And then the next question is what purpose are they serving in your portfolio? Is it for more for stability, or is it more for diversification? And you would select the bonds that fulfill that role the best. If you wanted both things, you would select two funds one that does the stability thing, a short-term bond fund, and one that does the diversification thing, a long-term bond fund. But those are two different animals that do two different things, so you never want to confuse them or think you can substitute one for the other, because it doesn't work that way. Forget about it. For those of you who want to hear more about that, I would suggest you go back and listen to those old episodes, because this is something that I find amateur investors are very confused about and get fixated on the interest rate paid and not on the purpose of having the bonds in the first place.

Voices:

That's the fact, jack. That's the fact.

Mostly Uncle Frank:

Jack and so amateurs repeatedly pick the wrong bonds for what they think the bonds are doing, and in many worst case scenarios they actually pick bonds that are highly correlated with their stocks but don't yield as much, so it's a completely pointless exercise.

Voices:

Hopefully that helps and thank you for your email you don't tell your papi how to cut the electorate. We ain't one at a time in here we're mass communicating.

Mary and Voices:

Oh yes, that's a powerful new force take a leg junior.

Mostly Uncle Frank:

Last off. Last off of an email from Mr Data. I am not less perfect than Lore, and Mr Data writes Hi, frank, you often speak of Mr Merriman.

Mary and Voices:

I took it upon myself to learn about his portfolios and ideas. Merriman, I took it upon myself to learn about his portfolios and ideas. I found that he's a fan of small cap growth funds and several of his portfolios recommend them. I also heard in several episodes that you don't recommend them. I'd like your opinion and why you two differ on this asset class specifically. Thanks, mr Data. Feel free to play some Star Trek the Next Generation, mr Data. Sound clips.

Voices:

I am not less perfect than Lore. I am not less perfect than Lore Enough. Both of you sit down.

Mostly Uncle Frank:

Well, it appears that Mr Data has a problem with his programming chips these days programming chips these days.

Mary and Voices:

Data intoxication is a human condition. Your brain is different.

Voices:

It's not the same, as we are more alike than unlike, my dear captain because paul merriman is not a fan of small cap growth funds that's not how it works.

Mary and Voices:

That's not how any of this works.

Mostly Uncle Frank:

He's a fan of small cap value funds, which are much different than small cap growth funds, and, in fact, if you listen to him, he will say that small cap growth is probably the factor combination that you want to avoid.

Mary and Voices:

You fell victim to one of the classic blunders.

Mostly Uncle Frank:

And not include in your portfolio because it has an inferior risk reward profile. It's a lot of risk, but not that much more reward than you would find from the stock market generally. So if you want my opinion on why we differ on this asset specifically, the answer is we do not differ on this asset class specifically.

Mostly Uncle Frank:

I'm telling you, fellas, you're going to want that cowbell, I will say I am a bit less sanguine on whether small cap value is likely to outperform the stock market generally or in the future, because the main reason that we are interested in small cap value and value stocks as a category here is because they are diversified from growth stocks. In 2022, you would see a very disparate performance between growth stocks and value stocks.

Voices:

Data. You are fully functional, aren't you, of course? But how fully? In every way, of course.

Mostly Uncle Frank:

I am programmed in multiple techniques, a broad variety of pleasuring, which would then allow you to rebalance out of the better performer into the lower performer. So in 2022, your value stocks may have been down 10% to up 10%, whereas your growth stocks were probably down over 30%. That huge difference in performance would have let you rebalance out of the value stocks into the growth stocks and then experience greater growth and performance when the growth stocks recovered the next year.

Voices:

You, jewel, that's exactly what I hoped. You, jewel, that's exactly what I hoped.

Mostly Uncle Frank:

This is a mathematical idea called Shannon's Demon, which is why diversification works, or why you get a better performance out of two similar assets that perform differently at different times than you would out of either one of them alone. And that is the fundamental reason why, in these risk parity style portfolios, we want to have half of our stocks in growth or growth leaning and the other half in value or value leaning, because it's going to be more diversified and allowed for these rebalancings over time, which will make that combination perform better than either one of them alone, and so we don't need to worry about whether one is outperforming the other one. All we really care about is the fact that they are both performing and performing differently at different times. So hopefully a little bit of that reprogramming helps you, mr Data. Ah, good Data.

Voices:

At least you're functioning fully, captain, if you prick me, do I not leak?

Mostly Uncle Frank:

And thank you for your email.

Mary and Voices:

And now for something completely different.

Voices:

What is that? What is that? What is it?

Mostly Uncle Frank:

Oh no, not the bees. The bees certainly descended on stock markets last week. As we mentioned in the opening, this was one of the worst two-day performances ever for the stock market and one of the oddest reasons for that, which is a policy error by the US government, and so, as a consequence, what markets are flashing these days is recession, essentially. So what I find actually interesting is that, although the cause of the impending recession here is kind of unique, the way the markets are behaving is very typical for markets that are going into a recessionary period. What I mean by that is, the stock markets are falling steeply.

Mostly Uncle Frank:

Meanwhile, the US Treasury bonds are rising as people buy more of those bonds, in particular, on the long end. You'll see that that has gone up several percent this week, and you also just saw some general selling, or panic selling, of all risk assets, including gold gold. But if this plays out like the early 2000s or like the 2008 period, what you are likely to see, after all of the selling is done, or mostly done, is that things like gold will recover more quickly, and also it is likely that people will buy more value stocks, whereas growth stocks will remain down for longer. At least, that is the general pattern of recessions and is fundamentally why we're holding portfolios like this. Because this pattern repeats over and over again. You just don't know when it's going to come upon you.

Mary and Voices:

A crystal ball can help you, it can guide you.

Mostly Uncle Frank:

But as a consequence, these kind of risk parity portfolios just aren't hurting very much compared to the overall markets because they have more diversification and they will have rebalancing opportunities coming up in the future. But just looking at the markets for the year so far, the S&P 500, represented by VOO, is down 13.3% for the year. The NASDAQ, represented by QQQ, is down 17.2% for the year. I think the overall NASDAQ market is actually in bear market category and is down over 20%. Small cap value, represented by the fund VIOV, is down 18.78% for the year. Gold is still up substantially, although it lost a couple of percent last week.

Mary and Voices:

I love gold.

Mostly Uncle Frank:

A representative fund, gldm, is up 15.7% for the year this was the week of long-term treasury bonds and a representative fund, vglt, is now up 7.2 percent for the year. So it has returned to having that negative correlation with the stock market, which is what happens during recessions and has happened in every recession since at least the 1950s. Reits, represented by the fund REET, are now down 5.14% for the year not nearly as bad as the rest of the stock market. Commodities, represented by the fund PDBC are down 2.31% for the year. Preferred shares, represented by the fund PFFV, are down 1.68% for the year and managed futures managed to be down. Represented fund DBMF was down 4.92% for the year. So again, this was kind of typical recession era behavior last week Panic, selling in all risk assets and buying of bonds, excelling in all risk assets and buying of bonds. The one thing that actually was more unusual is that the US dollar also fell last week, and usually in a recessionary environment the US dollar is rising. But I think that that is related to the particular cause of this recessionary impulse, which is going to favor investments in foreign assets over US assets, even though everybody's going to be hurting. So don't think that you're going to escape the downturn in global stock markets by investing in a particular country. It's just going to be the case that some are going to be worse than others, and the US seems to be leading the way down, at least right now.

Mostly Uncle Frank:

Moving to these portfolios, the first one's the All Seasons. This is a reference portfolio. It's only 30% in stocks and a total stock market fund, 55% in intermediate and long-term treasury bonds and the remaining 15% divided into gold and commodities. It is down 2.57% for April. So far, four days of April, it is actually flat for the year 0% year-to-date and it's up 8.56% since inception in July 2020. For April, we are distributing $31 from cash that has accumulated. Let's say, at a 4% annualized rate, that'll be $125 year-to-date and $1,815 since inception in July 2020.

Mostly Uncle Frank:

All of these portfolios started with about $10,000 in them. Moving to these bread-and-butter kind of portfolios, first one's a golden butterfly. This one is 40% in stocks divided into a total stock market fund and a small cap value fund, 40% in bonds divided into long and short term treasuries, one for stability and one for diversification Guess which one is which? And 20% in gold GLDM. It is down 3.86% month-to-date for April. It's down 1.78% year-to-date and up 31.55% since inception in July 2020. So you're probably sleeping pretty well at night if you have that one or something like it.

Voices:

Snooze and dream. Dream and snooze. The pleasures are unlimited.

Mostly Uncle Frank:

We'll be distributing $45 for April. Treasures are unlimited. We'll be distributing $45 for April. It's going to come out of GLDM, the gold fund, which has been the best performer this year. It's at a 5% annualized rate. That'll be $182 year-to-date and $2,483 since inception in July 2020.

Mostly Uncle Frank:

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 in a money market fund. It is down 4.21% for the month of April. So far. It's down 4.24% year to date and up 24.44% since inception in July 2020. We'll be taking $43 out of it, which always comes out of cash in this portfolio. That's for April at a 5% annualized rate. That'll be $174 year-to-date and $2,435 since inception in July 2020.

Mostly Uncle Frank:

Next one's the risk parity ultimate. It's kind of our kitchen sink here. I'm not going to go through all 14 of these funds. I do note there's an interesting one called BTAL, which is a long short fund that goes long value and short growth, and that one is up fairly substantially this year, although it was down on Friday. So this portfolio is down 4.89% month to date. For April. It's down 4.2% year to date and up 16.35% since inception in July 2020. For the month of April, we're withdrawing at a 5% annualized rate That'll be $39 from the gold fund. Gldm would be $158 year-to-date and $2,608 since inception in July 2020. Now moving to these experimental portfolios involving leveraged funds. We do hideous experiments here, so you don't have to.

Voices:

Look away, I'm hitting you.

Mostly Uncle Frank:

First one's the Accelerated Permanent Portfolio. It is 27.5% in a levered bond fund TMF, 25% in a levered stock fund UPRO, 25% in PFF, a preferred shares fund, and 22.5% in gold GLDM. It's down 4.74% month-to-date. It's down 0.95% month-to-date. It's down 0.95% year-to-date and up 0.07% since inception in July 2020. This will almost certainly be rebalanced on the 15th of this month if current trends continue, since the stock fund is down to 15% of the portfolio when it usually is at 25%. But we shall see what happens between now and the 15th when we actually look at this for rebalancing purposes. So we'll be taking $38 out of it from cash accumulated cash for April. It's a 6% annualized rate. It's $156 year-to-date and $2,786 since inception in July 2020. Next one's the aggressive 50-50. This is the most levered and least diversified of these portfolios. It's one-third in a levered stock fund UPRO, one-third in a levered bond fund TMF and the remaining third in Ballast, comprised of a preferred shares fund and an intermediate treasury bond fund. It is down 5.8% month to date. It is down 7.25% year to date and down 18.31% since inception in July 2020. It's very easily the worst performer of all of these portfolios, which is funny because it was the best performer at one time, but that is a consequence of all the leverage and a lack of diversification. For April, we'll be taking $32 out of it from the Intermediate Treasury Bond Fund, vgit. It'll be at a 6% annualized rate, $132 year-to-date and $2,801 since inception, july 2020. Now moving to the next one. This is the levered golden ratio portfolio. It is 35% in a composite levered fund called NTSX that is the S&P 500 and treasury bonds in it, 20% in gold, gldm, 15% in an international small cap value fund, avdv. Then it's got 10% in KMLM, which is a managed futures fund, 10% in a levered bond fund, tmf, and the remaining 10% divided into UDOW and UTSL, which are levered value funds. Following the Dow and the Utilities Index, it is down 6.96% month-to-date. It's down 4.7% year-to-date percent month to date. It's down 4.7 percent year to date and down 8.92 percent since inception, july 2021. It's a year younger than the other ones. For April, we'll be taking $33 out of it from accumulated cash. It's at a 5 percent annualized rate. It'll be $134 year to date and $1,690 since inception, july 2021.

Mostly Uncle Frank:

And the last one is the Optra portfolio. This is a return stacked style portfolio. It is 16% in a leveraged stock fund, upro, 24% in a worldwide value fund called AVGV, 24% in GOVZ, which is a US Treasury's STRIPS fund, and the remaining 36% divided into gold and managed futures. It is down 6.57% month to date. It is down 5.61% year to date and down 2.86% since inception in July 2024. It's only about nine months old. For April, we are withdrawing $50 from GLDM. That's at a 6% annualized rate. It'll be $203 year-to-date and $463 since inception in July 2024. And that concludes our portfolio reviews for the week and the month Boring and what we can see from this, in particular, with respect to the first three portfolios, which are kind of basic ones that they are performing, essentially, how you would draw this up in terms of a stock market crash and the kind of expected performance you would see out of the other assets, which, if this continues, is going to be resulting in some substantial rebalancing when we get to rebalancing those portfolios in July on their annual rebalancing dates.

Mostly Uncle Frank:

So we'll be selling a lot of the bonds and gold and other things and buying more stocks at lower levels. Buy low, sell high. Fear that's the other guy's problem, but now I see our signal is beginning to fade. If you have comments or questions for me. Please send them to frankatriskparityradarcom. The email is frankatriskparityradarcom. Or you can go to the website wwwriskparityradarcom. Put your message into the contact form and I'll get it that way. If you have any chance to do it, please go to your favorite podcast provider and like subscribe. Give me some stars, a follow, a review that would be great. Okay, thank you once again for tuning in.

Voices:

This is Frank Vasquez with Risk Party Radio signing off.

Mary and Voices:

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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