Risk Parity Radio

• Episode 421: NItty Gritty Portfolio Considerations And Variations, What We Actually Hold, And The Basics Of Rebalancing

  In this episode we answer emails from Luc, Ellen and Andrew.  We discuss Luc's target portfolio, the process for evaluating and choosing new assets for a portfolio -- comparing why managed futures pass the test, while covered call fund and TIPs funds don't --, what's actually in our personal variation of the Golden Ratio portfolio, finding old podcast episodes and basic rebalancing principles as to timing.  And learn some Canadian French and Minnesota vernacular along the way.Links:  Andrew Beer Interview on Masters In Business Podcast:  Andrew Beer on the Hedge Fund … - Masters in Business - Apple PodcastsRPR Episode 40 on YouTube:  Episode 40: Answering A Question About Big ERN's Gold Analysis From Joseph K.Kitces Article on Rebalancing:  Optimal Rebalancing – Time Horizons Vs Tolerance BandsBreathless Unedited AI-Bot Summary:What makes a truly resilient portfolio? In this revealing episode, Frank Vasquez pulls back the curtain on both theoretical and practical aspects of risk parity investing through thoughtful listener questions.When a software engineer from French-speaking Canada shares his leveraged risk parity portfolio, Frank offers nuanced guidance on balancing potential returns with sustainability. Rather than dismissing leverage entirely, he suggests a more measured approach—reducing exposure to funds like UPRO while maintaining their rebalancing benefits. This practical compromise exemplifies Frank's philosophy of building portfolios that remain psychologically manageable through market turbulence.The conversation takes a fascinating turn as Frank reveals his framework for evaluating new investment opportunities. Unlike many advisors who chase trends, his three-question methodology ensures only truly valuable assets earn portfolio space. His explanation of why managed futures succeeded where TIPS failed demonstrates how professional-grade analysis can be applied to personal investing. "The truth is," Frank notes, "a lot of otherwise viable or interesting strategies actually just don't fit into what we're trying to do here."Perhaps most valuable is Frank's unprecedented breakdown of his personal portfolio holdings. Beyond the expected allocations to stocks, bonds, gold and alternatives, he shares his experiments with direct indexing of property and casualty insurance companies—a Warren Buffett-inspired approach that provided positive returns even during 2022's difficult markets. This rare glimpse into a professional's actual implementation bridges the gap between theory and practice.Whether you're questioning how often to rebalance, wondering about international exposure, or simply curious about how a professional approaches their own money, this episode delivers actionable insights while maintaining Frank's trademark blend of humor and wisdom. Ready to build a portfolio that marches to a different drummer? This is the roadmap you've been waiting for.Support the show

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• Episode 420: Wrestling With Roths And 401ks, Assorted Shenanigans, And Portfolio Reviews As Of May 2, 2025

  In this episode we answer emails from Anderson, Ian, FFS, and Michael.  We discuss using Roths earlier in accumulation and tax considerations, wrestling with an expensive 401k plan with limited options, and the various and sundry deficiencies of this program and its website.  Rest assured, we have "top men" working on it.  Top.  Men.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.Breathless Unedited AI-Bot Summary:Welcome to the dive bar of personal finance, where frank conversations about investing happen without sponsors, guests, or corporate jargon. In episode 420, Frank Vasquez serves up practical wisdom alongside his signature blend of humor and no-nonsense advice.The heart of this episode centers around listener questions that reveal common investing dilemmas. When a father of six asks about Roth conversions while in a low tax bracket, Frank not only endorses the strategy but takes the opportunity to debunk widespread myths about future taxation. "The fear of future taxes is often overblown," Frank explains, noting how this anxiety is frequently exploited by financial professionals selling expensive products. He articulates why most people actually face lower tax rates in retirement—a perspective that runs counter to conventional financial advice but makes perfect mathematical sense when examining income sources and tax treatment.Another listener struggling with limited 401(k) options receives thoughtful guidance on transitioning from 100% equities to a more balanced risk parity approach. Frank's explanation of the "macro allocation principle" illuminates why focusing on the percentage of stocks across all accounts matters more than perfect diversification within any single account. His pointed criticism of target date funds—describing them as "easy but not simple"—offers a refreshing counterpoint to the retirement industry's oversimplified solutions.The episode culminates with Frank's detailed review of eight sample portfolios, revealing how diversification strategies are performing in today's volatile markets. While the S&P 500 struggles with a 3.02% year-to-date decline and small cap value plummets 13.16%, gold shines with a remarkable 23.2% gain. More importantly, the risk parity portfolios demonstrate remarkable stability compared to single-asset approaches.Whether you're considering tax strategies, rebalancing your portfolio, or simply looking for straight talk about investing, this episode delivers valuable insights without the financial industry's typical marketing hype. Subscribe, leave a review, and visit riskparityradio.com for more resources to help guide your investment journey.Support the show

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• Episode 419: Transitioning To Retirement Portfolios, Fiddling With Limited 401k Funds And Applying The Socratic Method To Personal Finance

  In this episode we answer emails from Chris, Will and Neelix.  We discuss the basics of transitioning from accumulation to decumulation, choosing funds for accumulation from a limited selection, more transitioning questions from an alien, my lawyerly approach to personal finance and why the public personal finance landscape is often not very helpful and leaves much to be desired.Frank addresses listener questions about transitioning from accumulation to retirement portfolios, focusing on timing and asset allocation decisions for different life stages. The episode explores foundational concepts about when to shift to a less aggressive portfolio and how to work around investment account limitations.Links:All Podcasts On One Web Page:  Risk Parity Radio RSS FeedMerriman ETF Recommendations:  Best-in-Class ETF Recommendations | Merriman Financial Education FoundationjBreathless Unedited AI-Bot Summary:Ready to make the leap from aggressive growth investing to a more balanced retirement portfolio? Join Frank Vasquez as he breaks down one of investing's most critical transitions through thoughtful analysis of listener questions spanning different life stages and portfolio challenges.We dive deep into the essential question of timing: when should you transition from accumulation to decumulation? Unlike conventional wisdom that focuses on market conditions, Frank reveals why your personal financial readiness should be the primary consideration. Learn why calculating your Financial Independence number is crucial and why your current spending patterns offer surprisingly reliable guidance for retirement planning.For younger investors struggling with 401(k) limitations, Frank offers practical strategies to achieve optimal asset allocation across multiple account types. His clear breakdown of why certain asset classes (looking at you, small-cap growth) deserve caution while others merit emphasis provides actionable guidance regardless of your investment timeline.What sets this episode apart is Frank's candid assessment of the personal finance media landscape. Drawing from his background cross-examining financial experts, he categorizes financial content into entertainment, sales, and education - explaining why most advice falls short for those who actually plan to spend money in retirement. His Bruce Lee-inspired approach to financial wisdom - "take what is useful, discard what is useless, and add something uniquely your own" - offers a refreshing framework for cutting through the noise.Whether you're decades from retirement or counting down the years, you'll gain valuable perspective on building a portfolio strategy that serves your actual spending goals rather than following the crowd. Share your own portfolio questions at [email protected]!Support the show

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• Episode 418: Different Drummers, Even More GDE, Nice Blogging When You Can Get It, And Portfolio Reviews As Of April 25, 2025

  In this episode we answer emails from Jeff, Jenzo and Sam.  We discuss spending money on relationships, a 72(t) situation, what to do with an unused Coverdell, GDE (again), a nice risk parity write-up and some random musings about the history of free speech and communications technologies.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:Jenzo's GDE Backtest:  testfol.io/?s=0SLNjC7As4bSam's Most Excellent Risk Parity Explication Blog Post:  15 Uncorrelated Assets | SSiSSam's Most Excellent Bill Of Rights Blog Post:  Boxed In | SSiSBreathless Unedited AI-Bot Summary:When markets tumble and headlines scream doom, properly diversified portfolios reveal their quiet strength. This episode showcases exactly that phenomenon - while small cap value has plummeted 15.58% and the S&P 500 has shed 5.74% year-to-date, gold has soared a remarkable 25.87%, creating a balancing effect that keeps risk parity portfolios remarkably stable.We dive into listener Jeff's retirement strategy, examining his use of 72T distributions and exploring whether his recent RV purchase makes financial sense. The answer turns out to be more about relationships than raw numbers. Research shows expenditures that facilitate meaningful connections tend to yield the greatest happiness returns - a powerful framework for evaluating major purchases in retirement.The emerging world of composite leveraged ETFs takes center stage as we examine GDE, which combines S&P 500 exposure with gold allocation at 1.8x leverage. While innovative funds like these package risk parity principles into convenient solutions, they represent a tradeoff between simplicity and control. We explore whether these instruments belong in a sophisticated asset allocation strategy or if traditional single-asset funds still offer superior flexibility.For investors fascinated by portfolio design theory, we tackle the question of just how many truly uncorrelated assets one needs. While hedge funds and endowments might pursue 15+ distinct asset classes, diminishing returns suggest a more practical approach for individual investors. The mathematical reality shows the incremental benefit of adding that 11th or 12th asset pales in comparison to the impact of moving from one or two assets to five diverse investments.Our weekly portfolio review reveals the practical power of these principles. Despite market turmoil, most of our sample portfolios remain nearly flat or slightly positive for the year - precisely the stability risk parity promises. Whether you're just beginning your investment journey or fine-tuning an established strategy, this episode offers both theoretical frameworks and practical evidence for building resilient portfolios in uncertain times.Ready to hear more? Subscribe, leave a review, and send your questions to [email protected] the show

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• Episode 417: International Growth Funds, DSTs, Portfolio Transitions And Other Questions And Quandaries

  In this episode we answer emails from Marco Esquandolas and Multi-Family Investor.  We discuss a long-term diversified Roth portfolio for a 13-year old, modelling Delaware Statutory Trusts in a portfolio, transitioning out of an all S&P 500 allocation in a taxable account, PFIX, Sabine Royalty Trust and individual stocks in retirement portfolios, and M1 Finance.Note/Correction:  Sabine is actually NOT structured like an MLP but as a true trust and therefore issues 1099s, not K-1s like most companies in the oil & gas royalty space.Links:Shannon's Demon Article:  Unexpected Returns: Shannon's Demon & the Rebalancing Bonus – Portfolio ChartsIDMO vs EFG (and other international growth funds) Analysis:  testfol.io/analysis?s=4PEQ1YvTbAMBreathless Unedited AI-Bot Summary:Dive into the world of strategic portfolio building with this illuminating episode where Frank tackles questions from two distinct investors at opposite ends of the age spectrum. A father shares his 13-year-old son's Shannon's Demon-inspired portfolio that's being built for an ultra-long 50+ year time horizon, featuring a balanced approach to growth and value across both domestic and international markets. Frank offers targeted advice on fund selection while celebrating this young investor's precocious financial journey.The conversation shifts dramatically when an engineer earning $250,000-300,000 annually shares his detailed retirement strategy with hopes of financial independence before 50. With $3.4 million spread across multiple investment vehicles including real estate, this listener puzzles over how to transition to a risk parity portfolio without triggering a substantial tax bill. Frank methodically dissects several aspects of this complex situation, questioning the wisdom of backdoor Roth conversions during peak earning years and clarifying misconceptions about Delaware Statutory Trusts as bond substitutes.What makes this episode particularly valuable is Frank's blend of technical advice and practical wisdom. He cuts through complex tax and investment strategies to offer straightforward solutions - identifying tax-loss harvesting opportunities, rethinking account structures, and focusing on expenses rather than arbitrary portfolio targets. The discussion extends to specialized investments like royalty trusts and interest rate hedges, providing listeners with a masterclass in portfolio construction that balances theoretical ideals with real-world constraints.Whether you're managing investments for the next generation or planning your own early retirement, this episode delivers actionable insights on building resilient, tax-efficient portfolios tailored to your unique circumstances. The principles shared apply across market conditions and investment goals, making this essential listening for any DIY investor seeking to optimize their financial future.Support the show

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