Risk Parity Radio

In this episode we answer emails from Jeff and Colin.  We discuss why auto call ETFs and covered call funds usually just change payouts rather than improve underlying performance, why forced income creates forced taxes and reduces flexibility in a taxable retirement portfolio, why building a retirement “paycheck” is mostly a marketing pitch and selling shares is better approach, how to use a small test portfolio as exposure therapy for share selling fears, why global stock diversification often acts like a currency bet rather than true business diversification, and why value versus growth is more meaningful diversifier in drawdowns than US versus international.

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

Additional Link:

Acadian Article re International Stocks: Putting Portfolios Together when the World is Falling Apart | Acadian Asset Management

Breathless Unedited AI-Bot Summary:
A 13% yield can feel like a warm blanket in retirement, but it can also be a tax bill and a slow leak in disguise. We dig into a listener question about auto call and “high income” ETFs and explain why these products often do not improve expected results. They mainly repackage the same stock market risk into a payout that looks comforting, while reducing your flexibility and sometimes cannibalizing total return.

Then we switch to global stock diversification and the popular claim that de-globalization will lower correlations and make international stocks the missing piece. I explain why broad international index funds can wind up behaving like an indirect currency bet, why the data matters more than the story, and why diversification across business types, especially value versus growth, can matter more when markets are falling. If you really want currency exposure, we talk about why managed futures may be a cleaner, more intentional tool than buying international equities for that purpose.

We wrap with the weekly market snapshot and performance review of the eight sample portfolios, covering US stocks, small cap value, long-term Treasuries, gold, commodities, REITs, preferred shares, and managed futures. If you want practical retirement portfolio management, risk parity style asset allocation, and a calmer approach to drawdowns, hit play, then subscribe, share the show with a friend, and leave a rating or review so more DIY investors can find it.
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In this episode we answer emails from George, James and Yigitalp.  We discuss stupid financial media assumptions and the vapid analysis that often follows from them, dig into Mandelbrot and fractals to explain why markets defy neat bell-curve models, then troubleshoot a Golden Ratio style portfolio built with UCITS ETFs, leverage, and diversifiers.

Links:

WSJ Opinion Article:  Opinion | You’re Probably Overinvested in Bonds

Blogpost about Mandelbrot and Fractal Math:  The Fractal Lens - Prospecting Mimetic Fractals

Misbehavior of Markets Book:  The (Mis)Behavior of Markets by Benoît B. Mandelbrot | Goodreads

Zooming In On A Mandelbrot Set Video:  Eye of the Universe - Mandelbrot Fractal Zoom (e1091) (4k 60fps) - YouTube

Cool Number Nerd Video:  Fibonacci Numbers hidden in the Mandelbrot Set - Numberphile

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

Breathless Unedited AI-Bot Summary:

“You’re probably overinvested in bonds” is the kind of headline that sounds helpful until you ask the only question that matters: what is your portfolio supposed to do for you? We challenge the lazy defaults that still dominate personal finance content, from treating the 60/40 portfolio like a universal baseline to pushing age-based stock formulas that ignore spending needs, flexibility, and real-world goals. If your plan is to never touch your assets and leave a big bequest, a stock-heavy 90/10 approach can make sense. If you plan to draw from your portfolio, the math and the risks look very different.

We also go deeper on why markets refuse to behave like tidy textbooks. Using Benoit Mandelbrot and fractal finance as the jumping-off point, we talk about fat tails, power laws, and why “average return plus standard deviation” Monte Carlo simulations can create false confidence. Instead of pretending we can forecast with precision, we focus on building portfolios that can survive different economic regimes, a core idea behind risk parity style diversification and more resilient asset allocation.

Then we answer a detailed listener email from a European investor building a Golden Ratio portfolio with UCITS ETFs, including a levered balanced fund, small caps, long-duration bonds, gold, managed futures (DBMF), and a small bitcoin slice. We show how leverage changes your true exposures, why multi-asset levered funds make the math harder, and how to think in exposures first before picking more “diversifiers.” If you get value from this kind of practical portfolio construction talk, subscribe, share the show, and leave a review so more DIY investors can find it.

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In this episode, we share big news from our Fairfax CASA work and what your generosity has made possible.  Then we pivot to an email from Todd and go on a deep dive on motivational speakers and what actually helps people change.  In a van.  Down by the RIVER.

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:

Fairfax CASA Donation Page:  Donate - Fairfax CASA

Acres of Diamonds:  Acres of Diamonds Audiobook | Russell H. Conwell | Full

The Strangest Secret:  The Strangest Secret Earl Nightingale Conant 1950's Original FULL

Jim Rohn "Walk Away":  Walk Away From The 97 Percent - Jim Rohn

Breathless Unedited AI-Bot Summary:

A “major award” is nice, but the real win is what happens when a community turns attention into action. We start by sharing personal news from our work with Fairfax CASA and a recognition that belongs to all of you as much as it belongs to us: listeners of the show have now raised over $66,000 to support child advocacy for kids navigating the court system after abuse or neglect. We talk about why that mission matters, and why linking money to meaning can keep your long-term plan steady when markets and life get noisy.

Then we pivot hard into a listener question that lets me do what I love: trace the actual history of motivational speakers. We go from Ben Franklin and the self-made habit mindset, through American self-reliance, transcendentalism, traveling lectures, and “Acres of Diamonds,” all the way to the modern personal development industry. Along the way, we separate practical tools from magical thinking, including research on why “manifesting” can backfire by reducing effort. The anchor takeaway is Jim Rohn’s line I keep coming back to: affirmation without discipline is the beginning of delusion.

We close with the weekly risk parity portfolio review and November distributions for eight sample portfolios, covering market moves across the S&P 500, NASDAQ, small cap value, long Treasuries, gold, commodities, and managed futures. If you like asset allocation, diversification, rebalancing, withdrawal rate planning, and a no-hype approach to DIY investing, you’ll have plenty to dig into here. Subscribe, share this with a friend who needs a reset, and leave a review so more long-term investors can find the show.
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This is the follow-up episode to the "Jumping the Shark" segment in Episode 532 that we promised to create (but wish we didn't have to).  It discusses the fallacies and misrepresentations in the Early Retirement Now blog and its recent posts about Risk Parity Radio.  Due to their defamatory nature and evidence of malicious intent, and for other legal reasons, we will not be republishing those posts. 

We will return to our regularly scheduled programming in the next episode.  Thank you for your patience.

Links:

October 10, 2022 ERN Toolbox Analysis of Risk Parity-Style Portfolio:  ERN Toolbox Analysis of RP Portfolio 10-10-2022.jpg - Google Drive

October 10, 2022 ERN Toolbox Analysis of 75/25 Portfolio:  ERN Toolbox Analysis of 75-25 Portfolio 10-10-2022.jpg - Google Drive

Accompanying Slides:  2022-10-10 ERN Toolbox Portfolio Comparison Analysis.pdf - Google Drive

Accompanying Video on Comparative Analysis:  The Real ERN Toolbox Analysis Comparing A Risk Parity Portfolio With A 75/25 Portfolio

EconoMe 2025 Presentation:  F. Vasquez EconoMe 2025 Presentation.pdf - Google Drive

Video re Biased Skepticism Generally on ERN Blog:  Episode 532 Bonus: Biased Skepticism and Patterns of Deception In the FI Blogosphere

Report on Fallacies and Misrepresentations:  ERNs 72 Fallacies, Mispresentations and Insults In Blog Posts About Risk Parity Radio.pdf - Google Drive

Accompanying Slide Deck 1:  Slide Summary 1 of Blog Post Fallacies and Misrepresentations.pdf - Google Drive

Accompanying Slide Deck 2:  Slide Summary 2 of Blog Post Fallacies and Misrepresentations.pdf - Google Drive

Accompanying Video on 72 Fallacies and Misrepresentations:   How Early Retirement Now Wields Big Fallacies And Insults To Promote Itself At The Expense Of Others

Large Cap Growth/Small Cap Value vs. S&P 500 Comparison:  Portfolio Backtester for ETFs and Asset Allocation | testfolio

2022 Comparison -- RP Portfolios vs. 75/25:  Portfolio Backtester for ETFs and Asset Allocation | testfolio

The Fundamental Problems with Overly Conservative Planning Assumptions:  The Crushing Cost of Conservative Retirement Planning - The Best Interest

Breathless AI-Bot Summary:

A retirement portfolio argument gets ugly fast when people stop debating results and start debating labels. We pull the conversation back to the one question that matters for real retirees: what survives the worst historical sequences of returns while supporting a meaningful withdrawal rate?

We walk through the history behind the Early Retirement Now “toolbox” and revisit the author’s own 2022 backtest of a risk parity style allocation that blends broad US stocks, small cap value exposure, Treasury bonds, and gold. Using the same rules and the same field of play, that analysis shows a materially higher safe withdrawal rate than a simple 75/25 stock bond portfolio, especially around major market peaks where valuation risk and long drawdowns can break the 4% rule.

From there, we unpack how portfolio discussions go off the rails: straw man proxies for managed futures like DBMF, return assumptions that handicap diversifiers, cherry picked time windows that erase modern gold behavior, and goalpost shifting that swaps “safe withdrawal rate” for “bull market returns” midstream. We also explain why systematic factor tilting is not stock picking, and how you can sanity check claims with replicable backtesting across multiple tools, including Testfolio.

If you care about retirement planning, safe withdrawal rates, and sequence risk, this is a practical roadmap for spotting bad modeling before it costs you years of underspending and wasted time dealing with Biased Skeptics and dishonest rhetoric.
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In this episode we address a cornucopia of topics in emails from Alex, Superb Diamond Range, and Mark.  We discuss the Risk Parity Radio Reddit forum started by listener Adrian, an OPTRA-inspired portfolio with lower leverage and real-world tax location choices, extending managed futures history for better portfolio testing and expectations, why covered call ETFs usually change payouts more than outcomes, using OpenSocialsecurity.com to model claiming strategies, a simple UK-focused risk parity allocation and how to think about equity weight and value tilt, why fees matter less than people think in many modern ETF choices, withdrawal order and Roth conversions as situation-specific decisions that change every year, why good tax advice can add more value than investment tweaks.

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

Additional Links:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Risk Parity Radio Reddit Forum (courtesy Adrian):  riskparityradio

Alex's Portfolio (paywall):  Portfolio Backtester for ETFs and Asset Allocation | testfolio

Extending Managed Futures Data back to 1971:  I reconstructed a trend-following return series back to 1971. Here is the methodology. : r/LETFs

One of a Series of Ben Felix Videos on Covered Call Funds: Covered Calls: What People (Still) Get Wrong

Open Social Security:  Open Social Security: Free, Open-Source Social Security Calculator

Superb Diamond Range YouTube Channel:  Superb Diamond Range Podcast - YouTube

Mark's Bigger Pockets Interview:  Tax Efficient Ways to Withdraw Money in Early Retirement

Mark's Slide Presentation:  Alternatives to Sequential Drawdown - Google Slides

Breathless AI-Bot Summary:  

Most investing advice gets fuzzy right when you need it most: the moment you stop accumulating and start living off your portfolio. We dig into real listener questions that force clean thinking about risk parity portfolio design, early retirement withdrawals, and the uncomfortable truth that taxes can matter more than the exact tickers you pick.

We start with a detailed listener build based on an OPTRA-style framework, including how they adjust leverage, blend stocks with bonds, gold, managed futures, and alternatives, and even work through tax location choices for brokerage versus IRA and 401(k) assets. That leads into a blunt conversation about covered call ETFs and other structured “income” products: what they can do, what they cannot do, and why so many shiny new ETFs are really just higher-fee packaging. We also share a valuable community resource for extending managed futures data for backtesting, plus a practical nod to OpenSocialsecurity.com for modeling claiming decisions.

Then we go deep on decumulation strategy. There is no single correct “withdrawal order” because your best move depends on your tax brackets, deductions, healthcare costs, income mix, and what changes year to year. We explain why rigid rules of thumb break, why fourth-quarter tax planning matters, and why paying for strong tax advice can produce more real “alpha” than endlessly tinkering with portfolio allocations.

We wrap with our weekly review of market performance and the eight sample portfolios, highlighting how diversification shows up when different assets lead and lag. Subscribe, share this with a friend who’s planning retirement, and leave a review with the question you want us to tackle next.
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