Episode 501: Talking CASA, Dealing With Shiny Object ETFs, Musings About TDFs, And Transitions From Cash

In this episode we answer emails from Dustin, Optimus Bill, Vaibhav, and Morrie.  We discuss how to vet a new "shiny object" ETF, why trying to "fix" target date funds is likely to be a fools' errand as their proper use is extremely limited, and transitioning into a retirement drawdown portfolio without obsessing over recent market highs.

In our Queen Mary segment, we also provide a Fairfax CASA fundraiser update and explain how your donations support foster care advocacy.

Links:

Fairfax CASA Donation Page:  Donate - Fairfax CASA

Morningstar Analysis of LCOW:  LCOW – Portfolio – Pacer S&P 500 Qul FCF Aristocrats ETF | Morningstar

Breathless AI-Bot Summary:

A slick email promises “Quality” and “Aristocrats,” a backtest says it beat the market, and suddenly you are wondering if your portfolio is missing a magic ingredient. We slow that moment down and show you how to think like a process-driven investor instead of a headline-driven one. Starting with a listener question about a brand-new ETF, we walk through a simple evaluation method using Morningstar: check the expense ratio, identify the fund category, inspect the holdings, and compare it to cheaper index funds. The punchline is not about one ticker symbol, it is about learning to spot shiny-object marketing before it steals your time and returns.

From there we tackle a bigger theme: why so much financial media is engineered to keep “Level 2” investors chasing opinions and hopping from strategy to strategy. We talk about data mining, why a 10 to 15 year backtest can be deeply misleading, and what you should demand before believing any performance story. If you care about long-term portfolio design, the right order is asset allocation first, fund selection second, with low costs as a default unless something is truly different.

We also answer questions on target date funds, accumulation versus decumulation, and how real retirement planning gets messy across pre-tax, Roth, HSA, and taxable accounts. Finally, we address a common retirement fear: investing when “the market is high.” We explain why diversification changes that question, how different assets can carry the load at different times, and how to schedule a transition plan if moving all at once feels hard.

Subscribe for more no-nonsense portfolio talk, share this with a friend who keeps getting pitched “new” ETFs, and leave a review if the framework helps. If you can, donate to Fairfax CASA and help provide a steady advocate for children in foster care.

Transcript

Cold Open And Big Ideas

Voices 0:00

A foolish consistency is the hub goblin of little mind. Adored by little statesmen and philosophers and divine. If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. A different drummer.

Mostly Queen Mary 0:18

And

Welcome And How The Show Works

Mostly Queen Mary 0:19

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 0:36

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. And the basic foundational episodes are episodes 1, 3, 5, 7, and 9. Yes, it is still in my memory, thanks. We have also created an additional resource, a collection of additional foundational episodes and other popular episodes.

Voices 1:07

We have top men working on it right now.

Mostly Uncle Frank 1:14

Top men. And you can find those on the episode guide page at www.riskparty radio.com. Inconceivable! All thanks to our friend Luke, our volunteer in Quebec. Sacosh. We'd be helpless without him.

Voices 1:35

I have always depended on the kindness of strangers.

Mostly Uncle Frank 1:41

Because other than him, it's just me and Marion here. I'll give you the move, right?

Voices 1:46

I'll take it.

Mostly Uncle Frank 1:48

We have no sponsors, we have no guests, and we have no expansion plans.

Voices 1:52

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

Mostly Uncle Frank 1:55

Over the years, our podcast has become very audienced focused, and I must say we do have the finest podcast audience available.

Voices 2:03

Top drawer. Really top drawer.

Mostly Uncle Frank 2:07

Along with a host named after a hot dog.

Voices 2:10

Light in the Francis.

Mostly Uncle Frank 2:13

But now onward, episode 501. Today on Risk Party Radio, we're just gonna do what we do best here, which is attend to your emails.

Voices 2:24

Well, I could have told you that.

Fairfax CASA Fundraiser Breakdown

Mostly Uncle Frank 2:26

But before we get to that, as you know, we are running a charitable promotion here these days and raising money for Mary's charity, the Fairfax Court Appointed Special Advocates, of which she is one. Fairfax Casa for short. And so we'll have a little Queen Mary segment, beginning with the appropriate introductory music right here, right now.

Mostly Queen Mary 3:23

Your generosity has brought us close to the $25,000 mark as we enter the final two weeks of this campaign. And that $25,000 does not include the $20,000 matching gift offered by our generous donor, Matthew 6-3. These funds go directly toward providing a voice for children in the foster care system, ensuring that they have a dedicated advocate by their side when they need it most. We have about two weeks left to finish strong. We are so grateful for every gift. Whether you've given in the tens, hundreds, or thousands of dollars, we appreciate all of you. If you have not given yet and wonder where your donation would go, let me share some numbers with you. Gifts of up to $25 can provide a gift card for a child who might go without on a birthday or holiday. $50 covers the cost of all background checks and screenings for a new CASA. $100 helps CASA purchase additional materials for continuing education of CASA advocates, keeping them informed and up to date on relevant information that is critical for informed advocacy. $250 helps Fairfax CASA cover costs and expenses that are required by the Code of Virginia to keep CASAs educated. $500 covers the cost of three months of advocacy. A child in foster care is removed from their home, parents, and sometimes siblings. Change and upheaval can feel constant. A CASA provides consistency and keeps promises. Over three months, a casa will visit that child at least six times. A gift of $1,000 can help sponsor six months of advocacy for an abused child. Six months during the life of a two-year-old equates to one quarter of their life. And now I'd like to share another CASA success story. Three children were assigned to Fairfax CASA almost six years ago due to substance use in the family. The children were ages seven, five, and two months when they were removed from their home and placed in foster care. The seven and five-year-old had never been to school or been in any type of classroom environment. None of the children had ever seen a doctor or a dentist. Their medical and dental needs were quickly addressed, but their educational needs took a bit longer. While the oldest child immediately began catching up in school, it quickly became apparent that the middle child was not making up for lost time as easily and struggled to move past a kindergarten reading level despite being moved on to first and then second grade. The CASA on the case tirelessly advocated for several years until this child finally received an individualized education program, an IEP. The CASA kept advocating for the child's educational services through four schools, two states, and ten IEP meetings. The youngest child displayed several developmental, behavioral, and later educational issues as well. Once again, the CASA advocated on behalf of the youngest, working closely with the Department of Family Services and the foster parents to ensure that the child had proper assessments, evaluations, and medication management. Today, the youngest child is in kindergarten and the CASA is advocating for his IEP, which is in the final stages of completion. The children's aunt stepped forward and took all three children into her home. The CASA has been there as a resource and as someone to listen as the aunt navigated the adoption process and when the children's behaviors and numerous services presented challenges. These siblings are being adopted by their aunt and they are all so happy together in one big family.

Mostly Uncle Frank 7:05

So we hope you please will participate in our promotion. We'll put the link to the donation page in the show notes. And you can also find it on the support page at www.riskpartyre.com. As a reminder, if you donate to Fairfax Casa, you get to go to the front of our email line. You also get to go to the front of the email line if you donate to my charity, the Father McKenna Center.

Voices 7:33

Yes.

Mostly Uncle Frank 7:34

But please do mention that in your email so we can duly move you to the front of the line. And now, speaking of emails.

Email Queue And Donation Priority

Voices 7:43

I'm intrigued by this. How you say emails.

Mostly Uncle Frank 7:49

And first off.

The Shiny ETF Trap Explained

Mostly Uncle Frank 7:52

First off, I have an email from Dustin.

Voices 7:56

I just want to say one word to you. Just one word. Yes, sir. Are you listening? Yes, sir, you plastics.

Mostly Uncle Frank 8:08

And Dustin Wright.

Mostly Queen Mary 8:10

Hi, Frank and Mary. Donor to the Father McKenna Center here. I shared my donation confirmation in my earlier email. Frank, what are your thoughts on this index? S P 500 Quality FCF Aristocrats Index. I found the LCOW ETF that tracks this, but haven't done any analysis yet as the ETF appears relatively new. What say you? Good ad to a risk parity portfolio? Best D.

Voices 8:41

Look, uh, Mrs. Robinson, I drove you home. I was glad to do it, but I have some things on my mind. Can you understand that? Yes. All right. What do you drink?

Mostly Uncle Frank 8:52

Well, Dustin, rather than giving you a fish, let me see if I can teach you a little bit about fishing here.

Voices 8:59

Would you like me to seduce you? What? Is that what you're trying to tell me?

Mostly Uncle Frank 9:06

First, I see this is something that is sent to you by the Wall Street Journal. Looks like an email missive they may send out every week or day or something like that. And the way this is presented, it is definitely aimed at people on level two. And I talked about the levels of investors back in episodes 491 and 459. And most of what you see from the financial media and financial services industry is actually directed at people who are on level two, who have enough to invest, but don't necessarily know that much about investing. And so it is largely based on presenting shiny objects or magic investing buttons. And that is the way this is presented as check out this new shiny object we just presented, this new fund we created. And this is the way a lot of new funds are presented, as well as saying we did a 15-year back test or a 10-year back test. It's just generally between five and 15 years, is usually the number they used. We'll talk about why that is a little bit later.

Voices 10:16

I don't think it means what you think it miss.

Mostly Uncle Frank 10:19

But they're trying to get you to look at this thing and say, oh, I might need that. It sounds new and exciting. It's got a great name, Aristocrats. Aristocrats. It's like the aristocrats from uh Disney.

Voices 10:34

Everybody wants to be a cat. Because the cat's the only cat who knows where is the hell.

Mostly Uncle Frank 10:49

These are quality aristocrats. And it did induce you to do exactly what they wanted you to do, which is not to actually look at the fund and examine it, but to ask people's opinions about it. Because that's always what people on level two tend to do. They don't do any analysis themselves. What they do is they go and ask other people's opinions of something. And this is why they keep jumping from strategy to strategy, because they're always asking for another opinion. So they got you to take the bait.

Voices 11:20

Tina, you fat lard, come get some dinner.

Mostly Uncle Frank 11:23

Unfortunately, the person you solicited an opinion from, yours truly, ha ha ha ha, has a more analytical take on the whole process here because it is a marketing process we're looking at. The fund itself isn't actually not that important.

Voices 11:40

Do you think anybody wants a roundhouse kicked to the face while I'm wearing these bad boys? Forget about it.

Mostly Uncle Frank 11:46

It's recognizing how this is working, how this marketing works that's important for you to recognize.

Voices 11:53

You will learn a system of self-defense that I developed over two seasons of fighting in the octagon. It's called Rex Quando.

Mostly Uncle Frank 12:01

And the fact they're also trying to get you fixated on a particular fund or particular investment rather than doing what you're supposed to do, which is determine what asset classes you want to hold and then pick funds within those classes.

Voices 12:15

Okay, now watch this. I'm just gonna break the rest and walk away. Break the rest, walk away. Jeez. Okay, it's just that simple.

Mostly Uncle Frank 12:24

Again, this is appealing to the shiny object marketing ploy for this sort of thing.

Voices 12:30

Do you think I got where I am today? Because I dress like Peter Pan here.

Mostly Uncle Frank 12:35

So, what should you do when you get something like this and you want to make an evaluation yourself?

Voices 12:40

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

Mostly Uncle Frank 12:45

It's fairly easy these days because of the Morningstar site, which will give you most of the information you would need about something like this. So if you go take LCOW and go over to Morningstar and put it in there to see what this ETF is all about, the first thing you'll see is it's got a 0.49% fee attached to it. And that is a really high fee. So you would want it to be doing something really special or unusual or costly in order for it to support that kind of a fee. And so the next thing you need to do is go look at what is this thing actually invested in. And so you go over to the portfolio tab there, and you can see, first of all, it is a large cap blend fund. And then if you look at the major components of it, it's got things like NVIDIA and Google and Meta and Broadcom and a bunch of other standard kind of large cap funds. So what this is telling you is this really a waste of time, just knowing that.

Voices 13:43

Forget about it.

Mostly Uncle Frank 13:45

Because this just isn't that much different than an SP 500 fund or a total market fund. It's a large cap blend fund. Those are a dime a dozen. There are many cheap ones out there that you can pick from. And so this would have to be something very special in order for it to supplant that kind of a fund. Now, the first question is: do you even want a large cap blend fund in your portfolio? Because if you don't want one, you're done. There's no other analysis to do. You don't pick things out and find slots for them just because somebody said it's a good thing.

Voices 14:18

That's not how it works.

Mostly Uncle Frank 14:20

So let's pretend that you did want one and you had like a SP 500 fund or a total market fund in there already. If you compare these things, you'd see they're pretty much about the same. The performance characteristics of this, it's only been around for, I don't know, six months or so. It performs somewhere between the SP 500 and the Nasdaq 100. It's basically flat since last November or however long it's been around. And you see that it's also holding similar things. So this is a really big waste of time, particularly when you're looking at large cap funds. Large cap funds tend to all be invested in the same thing. And if you're just investing in a different collection or organization of the same companies, there's no point in this. You've got a cheap one, just take the cheap one. And don't waste your time with something like this.

Voices 15:11

Forget about it.

Mostly Uncle Frank 15:13

So on its face, there's pretty much no reason that I can see you would invest in this. But what about that hook? What about, oh, we ran this strategy over the past 10 or 15 years and it outperformed all these things. That is an example of data mining, and it is one of the most insidious marketing ploys.

Voices 15:34

Everything is proceeding as I have foreseen.

Mostly Uncle Frank 15:43

Many people also fool themselves by looking at short-term performances of various strategies and things. But essentially, you can create any kind of collection of assets that performed well in the past 10 or 15 years and turn that into some kind of fund or collection or something. It doesn't tell you anything about anything. In fact, it's misleading.

Voices 16:06

You fell victim to one of the classic blunders.

Mostly Uncle Frank 16:09

In order to evaluate this, you would have to evaluate it at least over 25 years and preferably over periods when it did not perform well, and then in comparison to other large cap blend funds. Because the truth of the matter is, anything invested in something like this, basically large caps that are kind of tech focused over the past 10 or 15 years, perform very well. We know that in hindsight. So I can create a fund that performed really well in hindsight. That doesn't mean anything.

Voices 16:41

The head and the nickel get your hot cup, a jack squat!

Mostly Uncle Frank 16:46

If you looked at this same strategy probably around the turn of the century, I'm sure it would have been god-awful, like all kinds of strategies of this nature were around then.

Voices 16:57

That's the fact, Jack! That's the fact, Jack!

Mostly Uncle Frank 17:01

So the upshot is there's misleading, deceptive marketing going on here for this fund. It costs way too much money. It invests in things that are much cheaper that you can get in a different form. So there's no reason at all that I can see anybody would invest in this fund.

Voices 17:18

It might be a tumor.

Mostly Uncle Frank 17:20

It's not a tumor. It's not a tumor at all. Most funds get promoted kind of like this, and then they just kind of see what sticks. Because most of these funds will disappear in the next few years, particularly if they don't perform very well. That's just the way the industry works. Ah, the sweet smell of an old day sucker. There's like a thousand new funds every year. Most of them are duplicative, unnecessary, or overly expensive. But that is how fund providers make their money. Put out a new shiny object, see how many people we can get to buy it. Maybe it'll perform well and people will stick with it for a while. And then maybe it won't, and we'll just get rid of it.

Voices 18:05

A guy don't walk on the lot lest he wants to buy. They're sitting out there waiting to give you their money. Are you gonna take it?

Mostly Uncle Frank 18:13

So the upshot is there's no reason to add this to a risk parity portfolio. There's no reason to add this to anybody's portfolio.

Voices 18:20

Forget about it.

Mostly Uncle Frank 18:22

And that is going to be the truth for most of the things that get presented to you in this manner from an email with a promotion attached to it from some media outlet or somewhere else. You can't handle the bunnies. I'm sure they were paid dearly for this promotion.

Voices 18:41

All we need to do is get your confidence back so you can make me more money.

Mostly Uncle Frank 18:46

So hopefully that process will help you assess the next time you get presented with one of these shiny objects. Because it's extremely rare that you would ever consider something like this. It would have to be in a class that you already wanted, and it would have to be demonstrably better than a thing you already have or have access to. And those things just don't come up that often, particularly in an area like Large Cap Blend. So hopefully that helps. And thank you for your email.

Voices 19:24

Second off.

Mostly Uncle Frank 19:26

Second

Why Target Date Funds Fall Short

Mostly Uncle Frank 19:27

off of an email from Bill. Optimus Bill, one of our favorites.

Voices 19:33

And though we are worlds apart, like us, there's more to them than meets the eye.

Mostly Uncle Frank 19:41

And Optimus Bill writes.

Mostly Queen Mary 19:43

Frank, I was on a walk today and thought I'd poke the bear. Ergo you.

Voices 19:49

Look for the bare necessities, the simple bare necessities. Forget about your worries and your stress.

Mostly Queen Mary 19:59

Can you check your own balls without scratching them and scry with Sonia to see if one day we have optimized risk parity target date fund accumulation to decumulation golden ratio portfolios?

Voices 20:12

My name's Sonia. I'm going to be showing you the crystal ball and how to use it or how I use it.

Mostly Queen Mary 20:19

I envision VUG slash AVUV across all accumulation accounts. Pre-tax, post-tax, taxable, and never taxed until 80% accumulation.

Voices 20:31

You know, like numchuck skills, bow hunting skills, computer hacking skills.

Mostly Queen Mary 20:40

Let's assume for purposes of this thought experiment that all accounts are maxed out for the duration of accumulation. At that point, only the pre-tax account transitions or glide to hold all defensive assets in the golden ratio. Long-term treasuries, gold, managed futures, and cash. Roth, HSA, and taxable accounts hold VUG slash AVUV. Any international allocation tilts desired in another fund choice gets put in Roth, HSA, and Pre-Tax. All equities are held in areas where max growth is desired. Is such a future possible? I can handle the truth.

Voices 21:19

You can't handle the gambling problem.

Mostly Queen Mary 21:22

Faithfully yours, Optimus Prime.

Voices 21:25

Now the crystal ball has been used since ancient times. It's used for scrying, healing, and meditation.

Mostly Uncle Frank 21:34

Well, first I needed to thank you for being a donor to both Fairfax Casa and the Father McKenna Center, and also our last emailer for being a donor to the Father McKenna Center. That is what has moved you to the front of the line.

Voices 21:48

That is the straight stuff, O Funkmaster.

Mostly Uncle Frank 21:51

Now, the balls Optimist Bill was referring to in his email are the ones that he actually gave me for Christmas. Two crystal balls. Calcite one and a black obsidian one.

Voices 22:03

A really big one here, which is huge.

Mostly Uncle Frank 22:08

But I'm afraid they did not have much to say about this particular topic. They didn't have other things that they could help us with.

Voices 22:15

Now you can also use the ball to connect to the spirit world.

Mostly Uncle Frank 22:19

I'm afraid the truth is I can't see any way that a target date fund aligned like a golden ratio portfolio or something that transitions to one would make any real sense at all.

Voices 22:32

You are talking about the nonsensical ravings of a lunatic mind.

Mostly Uncle Frank 22:38

The purpose of target date funds is very limited. If we go back to episode 333, we talked about this. These were invented around the year 2000. They never took off until we had regulations governing what kinds of funds could go into 401ks as default investment options in particular. And since these fit that bill, that is what has made them popular.

Voices 23:04

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

Mostly Uncle Frank 23:09

And so they are just there as a fallback to prevent people from putting money into their 401k and not having it in be invested in anything, because that's what used to happen. Used to just sit there in cash unless somebody actually invested it in something. And so they're really for the comatose. Why I go in and out of comas all the If you're not comatose, you should not be using target date funds. Because once you have any knowledge whatsoever, you can go in there and pick your own funds or get a little help to do it.

Voices 23:43

Is a coma painful? Oh heck no! You relive long lost summers. Kiss girls from high school. It's like one of those TV shows where they show a bunch of clips from old episodes.

Mostly Uncle Frank 23:55

If you don't know which ones to pick, I suggest you read If You Can by William Bernstein. It is a 16-page book, and I think anybody can read a 16-page book, and that will give you a couple of good ideas as to what you might want to pick. Now, if you want to go beyond that, there's plenty of other things to read: The Simple Path to Wealth, all of Paul Merriman's materials, and you can even check out episode 208 of Risk Parity Radio for the beginning investor in a Wizard of Oz themed extravaganza. But yes, I would put it in something like a large cap growth fund and a small cap value fund, like what you suggest for accumulation. Or just an SP 500 and a small cap value fund. As I've said before, there are actually many good options here, and there's no way of knowing which one's going to be the best in the next decade or two. So just pick some low-cost funds and ride them out. Now, I don't think you can really time any transition to any other kind of portfolio, whether it be a colon ratio portfolio or anything else. Because the truth of the matter, all of that is going to be determined by a whole bunch of other factors that no target date fund can account for, depending on what other investments this person has, how long they're going to work, what their income is, whether they have any other income sources.

Voices 25:34

You can't handle the dogs and cats living together.

Mostly Uncle Frank 25:38

And just a whole bunch of other things that no target date fund can account for in any reasonable way. And so trying to use that thing, a target date fund, is basically just using a square peg and a round hole, or just the wrong tool for the job. I just don't think there's any substitute for learning enough about investing to be able to manage your own investments if you are doing it yourself, as we are here for the most part.

Voices 26:07

We few. We happy few. We band of brothers.

Mostly Uncle Frank 26:16

And using some kind of composite thing like this is actually going to make your life a whole lot more complicated than solving any particular problem. Because you do need to rebalance these things as well. So I suppose this would be a possible future, but I think it would be a dystopian nightmare. In your musings on your walk today.

Voices 27:25

I know because I'm middle-aged man.

Mostly Uncle Frank 27:31

And thank you for your email.

Starting From Scratch With $100

Mostly Uncle Frank 27:54

Next off, we have an email from Viabhav. At least that is the best pronunciation I can give you for this name.

Mostly Queen Mary 28:04

No way. And Viabhav writes I want to build my portfolio to live off of it.

Voices 28:12

I got a hundred dollar check from my grandma, and my dad said I need to put it in the bank so it can grow over the years. Well, that's fantastic. A really smart decision, young man. We can put that check in a money market mutual fund. Then we'll reinvest the earnings into foreign currency accounts with compounding interest, and it's gone.

Mostly Uncle Frank 28:30

Well, I suggest you go back and listen to episode 208. Because if you're just getting started, yes, the first thing you need to do is be able to earn more money than you are spending, so you have some money to save, to have a gap that you can invest. Then you invest the money in low-cost index funds, and you just keep doing that for many years.

Voices 28:53

Follow the yellow brick road. Follow the yellow brick road. Follow the yellow brick road. Follow the yellow brick road! Follow the yellow brick road.

Mostly Uncle Frank 29:07

And then when you have enough money, which is usually something like twenty-five times your annual expenses, then a ballpark there, or you're getting close to that, then you can transition to another portfolio that will allow you to live off the money. And if you have questions along the way, you can certainly ask them here and in other places. Because this just really isn't that complicated if you take your time and are willing to learn a little bit.

Voices 29:35

All right, I'll give it a try. No! Try not! Do or do not. There is no try.

Mostly Uncle Frank 29:44

But do go back and start with episode two oh eight. Hopefully it will help. And thank you for your email.

Voices 30:06

Last off.

Mostly Uncle Frank 30:08

Last

Retiring Soon And Fear Of High Markets

Mostly Uncle Frank 30:09

off of an email from Maury.

Voices 30:12

Oh my wait, but come off at the wrong time.

Mostly Uncle Frank 30:31

And Maury writes.

Mostly Queen Mary 30:34

Frank, I am 62 and I'm going to retire from my full-time construction superintendent work in January and work part-time and draw Social Security. My wife and I have built a decent nest egg, almost seven figures. We want to use it for extras, autos, vacations, etc. I am mainly in cash, but would like to implement a drawdown portfolio similar to what you recommend. My only hang up is buying into equities at these levels. Do you have any recommendations on how to do this? Advice, episodes, publications, etc. Just trying to figure out how to start it. By the way, I built my Nest egg by buying, selling, and holding stocks over the years, so that part doesn't scare me. Just going in at these levels. Thanks.

Mostly Uncle Frank 31:22

Alright, this email is actually from last November, so we will reflect upon that as we answer it. I think the issue here is you're treating the stock market as if it's some kind of monolithical thing. And that is the way people talk about it, and that is the way a lot of people invest. They only invest in an S P 500 fund or one fund or two funds or something like that. But that's not what we do here.

Voices 31:47

That's not how any of this works.

Mostly Uncle Frank 31:50

And that isn't what I would recommend for a retirement portfolio. You just need to be more diversified than that. And if you are more diversified, you're probably not going to have more than 20 or 25% in what you are thinking of as quote, the market, unquote. So what if you would have invested in a diversified portfolio since November 2025? Well, it's true, the things that were the market are flat, and the Nasdaq 100 is actually down since then. Bond funds are also flat or down, whether they're a total bond market fund or a treasury bond market fund. So they haven't really gone anywhere. But what about some of these other assets that we would put in one of these kind of portfolios? Uh, we look at a small cap value fund like VIOV, that's up 13.5% since November. So you would have missed out on that. It's 13% different than what you think of as the market and what people are talking about as the market because it's a diversified holding. That's just a different part of the stock market. Another fund that's a small cap value fund, AVUV that we talk about, that's up 19.21% since November. So there wasn't any issue with investing in that then. Gold, another asset we use, GLDM, it's up 18.5% since the beginning of November. Managed Futures representative fund DBMF is up 12.19% since November. And even a basic international fund like VXUS is up 11.85% since last November. And the specialized funds like a small cap value international fund are up even more than that. So there really isn't any issue with investing in a diversified portfolio all at once or right away or in any particular time. Because you will expect different parts of it to be going up and down. That is diversification. That's why you hold all these things.

Voices 33:51

Always with you what cannot be done. You must unlearn what you have learned.

Mostly Uncle Frank 33:59

Some of them will be going down while the other ones are going up. That's to smooth out the overall portfolio. So that's the reality of the situation. If you are not just investing in the market or one or two fund portfolio, and you're investing in actual diversified portfolio, you're probably not going to have any issues, regardless of when you put your money in. Something will be going up, even if everything else is doing poorly. But now you asked, how should you go about this? Well, you need to just come up with a plan and implement it. Now that plan could be as simple as, okay, here are the things I want to be invested in. Let's pick a day and let's make all the transactions on that day and get our stuff invested. We know it's well diversified. Some things are going to go up in the future, some things are going to go down, but the whole thing's going to go up on average over time. Or if that's unpleasant to you, then you just schedule it out, say over a period of weeks or a period of months, and you put it on your calendar. On these days, we are going to sell this and buy that in these proportions or these dollar amounts. And then you just go and execute it that way. Now you don't want that to go on for years and years and years. But if it helps you to go in a little bit at a time, you can stretch that out over the next year if you really wanted to. Because you are investing for decades. We don't really care what happens in the next year or two years or even five years. What we really care about is what's going to happen in 10 or 20 years and how the portfolio is going to be riding that out if it does go down to begin with. Remember that these kind of portfolios we talk about here typically have drawdown periods of only three to four years max. So that's really what you should be thinking about. Now, if you did put it all in the market, like an SP 500 fund, yeah, you could be down for a decade or more. That's why you don't invest in that kind of thing for retirement. You need to be more diversified. So you're not just holding one or two stock funds and a total bond market fund andor a pile of cash.

Voices 36:21

There's $250,000 lining the walls of the banana stand.

Mostly Uncle Frank 36:26

Yeah, I'd be worried if you were going to jump right into something like that. I'm not going to be worried if you're actually going to use be using a diversified portfolio that is designed for retirement.

Voices 36:38

And so Michael, his son, and his brother together enjoyed the cathartic burning of the banana stand.

Mostly Uncle Frank 36:45

So in your case, since you do have lots and lots of cash, I probably would do this on a schedule in your case. I think it's just going to be mentally easier. As long as you just get the thing invested over a reasonable period of time. It's not going to matter in ten years whether you did it all at one day or spread it out over a number of months. Especially when you're talking about a very well diversified portfolio. And as for other materials, I suggest you go to our website and search the podcasts for the word transition or transitioning. Because we do have a lot of podcasts about people moving from an accumulation portfolio or some other portfolio to a retirement portfolio. Your situation seems a little bit simpler in that you're ready to go in terms of retirement and can move at any time. But I would go and listen to some of those things and that will give you some more ideas as to what to do here.

Voices 37:45

What what would you say you do here?

Mostly Uncle Frank 37:50

And I see you're already drawing from Social Security since this came in November and it's past January and you retired. So yes, you can do it at any time. And hopefully that helps, and thank you for your email. But

Where To Write Us And Wrap Up

Mostly Uncle Frank 38:10

now I see our signal is beginning to fade. If you have comments or questions for me, please send them to Frank at RiskPartyRoo.com. And email us frank at riskparty.com. Or you can go to the website www.riskparty.com. Put your message into the contact form and I'll get it that way. If you haven't had a chance to do it, please go to your favorite podcast provider and like subscribe and be some stars of follow a review. That would be great. Okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Purdy Radio signing off.

Voices 39:02

I'm Napoleon. That's a man. Wait a minute, I'm the leader. I'll say when it's the end. It's the end.

Mostly Queen Mary 39:31

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