Risk Parity Radio

In this episode we answer emails from Luc, (from Quebec!), Nick, and Isaiah.  We discuss surviving ugly drawdowns and bad decades, building a risk parity portfolio that still grows, momentum funds, avoiding fund hopping, and treating health like a real priority.

And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

Links:

Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation):  Donate - Father McKenna Center

Catching Up To FI With Ben Carlson:  Risk & Reward: Stress Testing the Long Term Buy and Hold Strategy | Ben Carlson | 225

Portfolio Comparison Starting In 2000:  Portfolio Backtester for ETFs and Asset Allocation | testfolio

Portfolio Charts Heat Map Chart:  Heat Map – Portfolio Charts

Portfolio Charts Article:  Minimize Your Miss – Portfolio Charts

Afford Anything Podcast #618:  They Ran Out of Money. I Didn’t. Here’s Why.

Afford Anything Risk Parity Portfolio Blueprint:  Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive

Breathless Unedited AI-Bot Summary:

Imagine retiring into a market that refuses to cooperate. A listener asks the question most withdrawal rate debates dodge: could you keep taking inflation-adjusted withdrawals while your balance shrinks through a 2000-style lost decade, and what would make you cut spending in real time?

We walk through how we think about drawdowns, sequence of returns risk, and why “toughing it out” is easier when the portfolio is built for multiple economic outcomes. That leads to practical stress testing: using historical analysis, TestFol.io, and Portfolio Charts heat maps to compare risk parity portfolios, a 60/40, and classic three-fund approaches under the worst start dates. We also share why Monte Carlo alone can be misleading if it relies on simplified assumptions instead of real historical regimes.

Next, we tackle a portfolio construction email that hits a modern dilemma: can you be too diversified in a risk parity setup? We unpack a Golden Ratio-style allocation with US and international equity sleeves, small cap value, momentum funds, long-term Treasuries, gold, managed futures, and cash. We discuss when that mix makes sense for decumulation versus accumulation, how momentum can function as a growth proxy, and the one behavior that reliably breaks good plans: fund hopping.

We end with a thoughtful note on the “life portfolio” many investors ignore: health. Exercise, consistency, convenience, and even medical support come up as we talk about aligning money decisions with longevity and day-to-day vitality.

If this helped you think more clearly about retirement withdrawals, risk parity investing, and building a plan you can stick with, subscribe, share the show, and leave a review.

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We close season six by walking through our annual July rebalancings of the first four sample risk parity style portfolios and talking about their raison d'être. We also share a practical reverse glide path strategy that we plan to apply to the sample Golden Butterfly portfolio over the course of the next ten years, starting with this one.

And we also thank our listeners for their kind words and generosity.

Links:

Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation):  Donate - Father McKenna Center

Michael Kitces Reverse Glidepath Article (listen to Episode 469 for more info on that):  The Benefits Of A Rising Equity Glidepath In Retirement

Breathless Unedited AI-Bot Summary:

Rebalancing sounds boring until you realize it’s the moment your plan either stays real or turns into wishful thinking. We’re ending season six with our annual July rebalance across four sample portfolios, using actual target percentages, real fund lineups, and the same rules we follow every year to keep withdrawals and asset allocation from drifting.

We start with the All Seasons Portfolio as a reference case for a very conservative risk parity style mix, then move into the Golden Butterfly where we add a twist: a reverse glide path. Instead of locking in a static stock percentage, we gradually step stock exposure higher over a decade by trimming the lowest-volatility sleeve, aiming to improve retirement resilience without turning the process into constant tinkering. Along the way we hit the practical why behind rebalancing: it quietly forces buy low and sell high when your emotions would rather do the opposite.

From there, we lay out the Golden Ratio Portfolio and the simplest “cash bucket” management we know, designed to minimize trades and mental overhead while still keeping a diversified retirement portfolio. We finish with the Risk Parity Ultimate Portfolio, our educational kitchen-sink mix that includes Treasury STRIPS, preferred shares, managed futures, a long-short fund, gold, and a small bitcoin slice so you can see how volatile sleeves behave during a rebalance.

If you want a clear, repeatable portfolio rebalancing process for retirement, safe withdrawal rate minded allocations, and a realistic look at diversified assets, hit play. Subscribe, share the episode with a DIY investor friend, and leave a review with the portfolio rule you want us to stress-test next.
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In this episode we answer emails from The Nameless One, Jebenizer, and C.M. We discuss practice drawdown portfolios, an unusual deferred pension cash build-up situation and how to handle it, assets that benefit from inflation, and simple rules for contributions and rebalancing that reduce taxes and stress.  And we share an update about Frank's Mom.

Links:

Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation):  Donate - Father McKenna Center

Rose Vasquez Memorial:  Rose Vasquez Memorial Service July 15, 2026

Bigger Pockets Money Podcast #1:  The Secret to a 5% Safe Withdrawal Rate | Frank Vasquez

Bigger Pockets Money Test Risk Parity Style Portfolio:  We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)

Afford Anything Podcast #618:  They Ran Out of Money. I Didn’t. Here’s Why.

Afford Anything Risk Parity Portfolio Blueprint:  Afford Anything frank-vasquez-risk-parity-portfolio-BluePrint.pdf - Google Drive

Slide Deck:  Afford Anything Episode 618 RPR Basics Slide Deck.pdf - Google Drive

Video Summary:  Afford Anything Episode 618 Video Summary.mp4 - Google Drive

Breathless Unedited AI-Bot Summary:

A retirement portfolio is one thing on paper and something else entirely when you have to live with it. We start with a quick personal update, then jump into listener emails that turn risk parity investing into hands-on decision-making you can actually copy and test. Along the way, we talk about the “Top of the T-shirt” charity campaign and why we keep the show sponsor-free, then pivot into the kind of practical portfolio questions that show up right before retirement.

One listener builds a $10,000 drawdown portfolio as a practice run while still in the accumulation phase. The rules are clear: rebalance annually, withdraw 5% of the original amount every year, increase that withdrawal by CPI, and do not save it. We dig into why this simple experiment is so effective for building confidence with withdrawals, rebalancing discipline, and the real emotions that come with spending from an investment account. We also connect it to the Golden Ratio portfolio concept and how diversified asset allocation can support higher safe withdrawal rates.

Another listener has a rare situation: a deferred pension option that forces pension payments into a tax-deferred account earning a flat 4%, creating a growing cash-like allocation with limited liquidity. We explain how to treat that cash as part of the total portfolio right now, how it can change your stock and bond mix, and what to do when the funds become available. We also tackle inflation hedging for retirement planning, including why Treasury bonds suffer in inflation, how value stocks like property and casualty insurers can help, and why managed futures can be a powerful inflation hedge.

If you like clear rules, real portfolios, and honest trade-offs, subscribe, share the episode with a friend, and leave a review so more do-it-yourself investors can find us.
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In this episode we answer emails from I Have No Name, Shellie, Midwest Nice, and Mr. Ed (a motley crew indeed!).  We discuss some massively funny generosity to our Top of the T-Shirt Campaign for the Father McKenna Center, an odd small cap value fund in a 401(k) and the issues surrounding holding too much cash, how stocks and long-term treasury bonds can both rise while still showing negative correlation and how that relates to the Four Quadrant Model, and redeploying proceeds from the sale of real estate.  And lutefisk.

And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

Links:

Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation):  Donate - Father McKenna Center

PMJAX at Morningstar:  PMJAX – Portfolio – PIMCO RAE US Small A | Morningstar

PMJAX Comparison:  Asset Analyzer for ETFs, Stocks, and Funds | testfolio

Portfolios With More and Less Cash Comparison:  Portfolio Backtester for ETFs and Asset Allocation | testfolio

S&P500 and LT Treasury Bond Comparison:  Asset Analyzer for ETFs, Stocks, and Funds | testfolio

The Four Quadrant Model Exquisitely Explained With Illustrations Inspired By Vermeer:  The Four Quadrant Wealth Atlas.pdf - Google Drive

Four Quadrant Model Video:  Understanding Correlations and Diversification Using the Four Quadrant Model

Breathless Unedited AI-Bot Summary:
A listener spots a new “small cap value” option in a 401(k) and asks the question most DIY investors eventually face: how do you tell what a fund really is when the plan uses a custom name and no ticker? We walk through a practical, repeatable research process using an AI chatbot (Gemini or ChatGPT) to find the closest public equivalent, then confirming style exposure and performance on Morningstar and Testfol.io. Along the way we discuss what “micro” exposure can mean, why “perfect” isn’t required inside a restrictive plan, and how you can still build a solid risk parity-style asset allocation with the tools you have.

Then we tackle the comfort blanket that can quietly cost you money: cash. We explain cash drag, why holding 25% in cash can act like you’re not investing a quarter of your portfolio, and why bucket strategies don’t magically solve sequence of returns risk just by relabeling accounts. We also dig into tax-efficient investing and asset location, including why taxable cash interest can be brutal in retirement and when it may make sense to reposition assets between taxable and retirement accounts.

A father writes in with his son’s surprisingly sharp question about bond stock correlation: if stocks go up over time and long-term Treasury bonds are negatively correlated, do bonds usually go down? We answer with long-run data, show why both can rise while still diversifying each other, and point to specific regimes like 2000 to 2010 versus 2022. We also field a real-world planning scenario on investing property sale proceeds while keeping ACA premium tax credits in mind by managing MAGI, before wrapping with our weekly portfolio review across the eight sample portfolios (VOO, QQQ, VIOV, GLDM, VGLT, PDBC, PFFB/PFFV, DBMF and more).

Subscribe for more practical risk parity investing guidance, share this with a friend who’s stuck in a confusing 401(k), and leave a rating and review so more DIY investors can find us.

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In this episode we answer emails from Ethan, Joe, and Jim.  We discuss a plan for young teachers to reach early financial independence with the right accounts and a little encouragement, the peculiar benefits of 457s and Roth contributions, a critical read of an academic article about an impractical TIPS ladder strategy, and the real-world problems with 30-year TIPS ladders, including complexity, tax issues, and longevity risk.  We also discuss catastrophe bonds as an asset class and and why the new ILS ETF looks expensive and underwhelming at the moment

And we touch on our fund raising campaign for the Father McKenna Center.

Links:

Father McKenna Center Donation Page (please mention Risk Parity Radio in the comment section with your donation):  Donate - Father McKenna Center

ChooseFI Teacher Podcast:  The Unfair Financial Advantage of Teachers | Ep 13

ARVA TIPS Ladder Article:  Full article: The Only Other Spending Rule Article You Will Ever Need

Breathless Unedited AI-Bot Summary:

A 457(b) can be the difference between “retire early” and “wait it out,” and we dig into why. We start by answering a detailed email from a young pair of teachers building wealth with a golden ratio portfolio while trying to bridge the years before age 59.5. We talk through tax buckets, account access, and what actually matters when you have Roth IRAs, taxable brokerage money, HSAs, employer plans, and the unique early-withdrawal rules of a 457(b) after you separate from service.

Then we switch gears to retirement drawdown strategies and put a popular “spending rule” article under cross-examination. We walk through the assumptions behind ARVA and a 30-year TIPS ladder approach, why ultra-variable withdrawals may be unrealistic, and why complexity does not automatically equal safety. If you care about safe withdrawal rate research, inflation protection, and building a portfolio that can handle real life, you will hear exactly where the paper breaks down and what we would focus on instead.

We wrap with a listener question on catastrophe bonds and the Brookmont Catastrophic Bond ETF (ILS). Cat bonds can look like the perfect uncorrelated alternative asset on paper, but fees and implementation details matter. If you’re building a diversified risk parity style asset allocation, we explain where cat bonds might fit, why this ETF doesn’t yet, and what we’d watch going forward. Subscribe, share this with a friend who’s planning early retirement, and leave a review so more DIY investors can find the show.

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