Risk Parity Radio

In this episode we answer emails from Tim, Anderson, and Pete. We discuss using a Golden Butterfly portfolio for intermediate accumulation, converting 529s to Roths and excessively levered portfolios for small children.  (I can't make this stuff up.)

But first we share Mary’s mission with Fairfax CASA and explain how steady advocacy changes a child’s path, and roll out our Fairfax CASA fundraising campaign in connection with National Child Abuse Prevention Month.

Links:

Fairfax CASA Donation Page:  Donate - Fairfax CASA

The Starfish Thrower Philosophy from Episode 441 (Cool New Video!):  The Starfish Thrower Philosophy With Mary.mp4 - Google Drive

Mary's CASA Case Adoption Story:  The Johnson’s Foster Care & Adoption Story

FIRE Takes Podcast:  FIRE Takes Podcast

Portfolio Charts Drawdown Calculator:  Drawdowns – Portfolio Charts

Testfolio Backtester:  testfol.io

Pete's Leveraged Leeroy Jenkins Portfolios:  testfol.io/?s=l7aMOsy4720

Breathless Unedited AI-Bot Summary:

Ever wonder how to save for a goal that’s a few years away without riding stock-market whiplash or leaving too much on the table in cash? We walk through a practical, risk-aware path for mid-term savings and pair it with something close to our hearts: Mary’s work with Fairfax CASA, where trained volunteers are a constant for kids navigating abuse or neglect cases. You’ll hear what CASA volunteers actually do—attend hearings, coordinate services, write court reports, and keep showing up—plus the data that proves consistent advocacy moves outcomes.

From there, we dig into building an intermediate-term portfolio using a risk parity approach like the Golden Butterfly. We explain how to model a real alternative to HYSAs: use long-history T-bill data instead of SHY, add regular monthly contributions to reflect real life, and examine drawdown length and worst-case windows over three to five-year spans. You’ll learn why shorter, shallower drawdowns can matter more than headline returns when timing is uncertain, and how Testfolio helps you compare paths with clarity. We also unpack a powerful planning angle: rolling leftover 529 funds to a Roth IRA under current rules, including holding periods, beneficiary considerations, earned income needs, and why Roth contribution capacity is too valuable to waste.

We don’t shy away from the spicy stuff either—managed futures, leverage, and the gap between theory and practice. Rather than letting fear set the rules, we talk about small, controlled experiments that build skill and confidence. That shift—from anxiety to informed action—can change both your portfolio and your peace of mind.

If this resonates, support Fairfax CASA via the link in the show notes and mention Risk Parity Radio or Mary Vasquez in the comment box. Then hit follow, share the episode with a friend who’s stuck between stocks and savings, and leave a quick review to help more DIY investors find us.

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In this episode we answer email Serge, Nielsen, Paul and Loren.  We dig into the core question that drives every portfolio -- when will this money be spent and by whom -- which dictates how it should be invested, and talk about the website, ETPs and their variations, and thinking about sabbaticals and Coast FI.  We also mention our Risk Parity Radio gathering at EconoMe on Friday at the Celare Hotel.

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:

The New(ish) Web Page:  Risk Parity Radio

Retire Often Book:  Retire Often | Create a meaningful and enjoyable life

Breathless Unedited AI-Bot Summary:

What is this money actually for—and when will it be used? We build from that deceptively simple question to map two clear paths: an equity-heavy accumulation approach for wealth you won’t touch for decades, and a diversified, endowment-inspired design for money you plan to spend or share in the near term. Along the way, we unpack revealed preferences, why giving while living can outperform hoarding for family outcomes, and how to convert volatility into usable cash flow with risk parity principles.

We share practical playbooks for different life chapters. If you’re sitting on a seven-figure portfolio and dreaming of a sabbatical, hold 1–2 years of cash and let the rest compound in accumulation mode. If you’re leaning toward Coast FI, keep retirement assets in equities while your current work covers life today. If you aim to fund 4–5 percent distributions to family or philanthropy, build a portfolio with multiple return drivers—equities for growth, Treasuries for crisis defense, gold and commodities for inflation, and managed futures for trend resilience—plus disciplined rebalancing to support withdrawals through market cycles.

We also clear up product confusion: GLD lives under the broader ETP umbrella while functioning like an ETF to most users—structure matters for risks and taxes, so read the prospectus and know what you own. To ground it all, we review the latest market moves—small-cap value strength, gold’s lead, managed futures momentum—and walk through sample portfolios, including rebalancing thresholds and what’s working now. Ready to align your portfolio with your real timeline and purpose? Hit play, subscribe for more smart, research-backed investing talk, and leave a review to help others find the show.
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In this episode we answer questions from Ben, Todd, and Tom. We discuss how managed futures differ from momentum, differentiating Monte Carlo simulations and why you need to be careful with parameterized simulations, and flexible withdrawal strategies generally and applied to the sample portfolios.
LInks:

QMOM and DBMF comparison and correlations:  testfol.io/analysis?s=5lCK1KCsAsx

Morningstar 2025 State of Retirement Income Report:  Morningstar State_of_Retirement_Income_2025.pdf - Google Drive

Portfolio Charts Annual Returns Calculator:  Annual Returns – Portfolio Charts

Stress Test Comparisons (Golden Butterfly, Golden Ratio, 60/40 and Three Fund Portfolios) Starting in 2000 with 5% withdrawal rate and CPI Inflation:  testfol.io/?s=7jwHMS4FogB

Breathless Unedited AI-Bot Summary:

Ever wondered why a momentum stock fund and a managed futures fund can look similar on the surface yet behave like opposites when markets lurch? We dig into the real differences between equity momentum strategies like QMOM and multi-asset trend programs like DBMF, explaining how managed futures trade across stocks, bonds, commodities, and currencies with the ability to go long and short. That breadth—and the discipline to follow trends over weeks to a year—creates low correlation to traditional portfolios and turns macro chaos into potential opportunity.

From there, we tackle the Monte Carlo confusion that trips up even seasoned planners. We compare historical shuffles that preserve real-world co-movements with parameterized simulations that assume normal distributions and independence—two assumptions markets love to break. You’ll hear why fat tails matter, how “impossible” scenarios sneak into naïve models, and where to find usable inputs without double-counting inflation. We also share a simple framework: use multiple calculators, add historical stress tests starting in rough windows like 1968 or 2000, and look for consistent results across tools before you trust any forecast.

Finally, we turn to retirement withdrawals and the habits that actually hold up. Instead of rigid CPI bumps, we walk through constant-percentage withdrawals, guardrails, and the reality that retiree spending tends to run at CPI minus 1–2 percent outside healthcare. We highlight how flexible rules can raise sustainable withdrawal rates and why resilient portfolio design—think Golden Butterfly or Golden Ratio—can outperform a classic 60/40 under severe sequences. If you’re ready to upgrade your plan with better diversification, better testing, and smarter spending rules, you’ll leave with practical steps you can apply today.

Enjoyed the conversation? Subscribe, leave a review, and share this episode with a friend who’s serious about building a portfolio that survives bad markets. What testing change will you make this week?

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In this episode we answer emails from Sebastian, Mark, and James.  We discuss the purpose of treasury bond allocations, annuity cash flows, and where rentals fit, goofy accounting for taxes, a bridge to social security and answer questions about Testfolio and data sources.  And celebrate Catherine O'hara.

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 Article re Accumulation in an RP-style Portfolio:  Minimize Your Miss – Portfolio Charts

Immediate Annuities:  Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com

Portfolio Charts Data Sources Page:  Data Sources – Portfolio Charts

Breathless Unedited AI-Bot Summary

Markets threw a curveball this week: gold ripped, then slipped; small cap value popped; long bonds mostly yawned. We use the noise as a lesson in clarity—every asset in a risk parity mix has a job. Treasuries aren’t for yield; they’re for recession insurance and rebalancing power when stocks sag. Gold, managed futures, and value are there to diversify return drivers so you’re not betting your future on a single story.

We dig into a listener’s Golden Ratio allocation with annuitized payouts and single-family rentals. The key is classification. Treat rentals as income if you’re keeping them, or as a future lump sum if you plan to sell—but don’t try to count both the cash flow and the equity for rebalancing. We also tackle the “can I replace treasuries with X?” question, and explain why the only valid substitute must reliably rise when recessions hit. If it won’t go up when growth falls, it isn’t doing the bond job.

From there, we clean up two planning snags that trip up even seasoned DIY investors. First, the tax myth: don’t “tax-adjust” asset values across accounts. Taxes are expenses, not asset haircuts. Optimize location, model annual tax liabilities, and keep the allocation true on the asset side. Second, Social Security modeling: the most practical move is to add it as an inflation-indexed future cash flow in a robust planner. If you need a present value for net worth, price a comparable inflation-adjusted deferred annuity instead of guessing with discount rates. For bridging years before benefits start, a TIPS ladder can unlock higher, earlier spending without warping your core portfolio.

We wrap with a clear performance snapshot and withdrawals across eight sample portfolios, from the classic Golden Butterfly and Golden Ratio to levered experiments and a return-stacked build. The thread through it all is discipline: know each asset’s purpose, keep cash intentional, rebalance when markets hand you spread, and let validated data—not hunches—drive decisions.

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In this episode we answer emails from Gregory, Rick and Graham.  We discuss some more amateur ideas on gold and cash buffers, and modeling managed futures, and we explain why costs and liquidity often matter more than the story you’re told. We share tools, back-tests, and resources that help DIY investors build smarter, calmer portfolios.

Graham's  "Fall Back" instructions for inputs for Testfolio:  "For example, since you typically use DBMF but would want to back test further, one can write DBMFSIM?FB=KMLMSIM which will use DBMF as far back as it can, then fall back to using KMLM. Did you know these can be chained? One can fallback onto commodities beyond the KMLM simulation, like this: DBMFSIM?FB=KMLMSIM?FB=GSGSIM."

Links:

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Three Ingredients:  Three Secret Ingredients of the Most Efficient Portfolios – Portfolio Charts

Video on Hedge Fund Market Wizards:  Jack Schwager presents: 15 Hedge Fund Market Wizards trading secrets & insights in their own words

Infinite Loops Podcast with Cliff Asness:  Surviving the Meme Stock Bubble | Cliff Asness

Damodaran 2026 Critiques of CAPE Ratios:  Aswath Damodaran 2026 Critiques of CAPE Ratios.pdf - Google Drive

Managed Futures/Trend Following Paper for Download:  A Century of Evidence on Trend-Following Investing

Graham's Full House Portfolio:  testfol.io/?s=5cyAAHgo1OH

Breathless Unedited AI-Bot Summary:

What if the biggest edge in your portfolio isn’t a hot strategy but the boring details—costs, liquidity, and the ability to rebalance in seconds? We dig into listener questions on gold, long-term treasuries, cash buffers, and managed futures, and we separate evidence from stories that sound good but quietly erode returns. We look at why an 80 percent stocks and 20 percent gold mix can be fine during accumulation, yet struggle in retiree withdrawals when stocks and gold sometimes fall together. Then we explain how duration from long treasuries can change the drawdown math, especially in recessions.

We also push back on the temptation to chase yield on vaulted physical gold. Once you add spreads, storage, transaction fees, and redemption friction, that “yield” comes at a cost, and you sacrifice the instant liquidity your rebalancing plan needs. Gold ETFs give you precise position sizing and near-zero friction so you can trim, add, and move on. On cash, we keep it blunt: a small buffer for bills makes sense, but large multi-year cash cushions drag safe withdrawal rates over time. Replenish cash by trimming whichever asset has run hot—simple rules, fewer regrets.

For listeners trying to model managed futures, we cover why commodity funds are poor proxies and how to use Testfolio’s fallback feature to extend DBMF or KMLM backtests across regimes. The larger message is pragmatic: stop searching for the perfect allocation and build a naively diversified mix that can handle growth, inflation, and shocks without prediction. Want to see how this plays out? Hit play, take notes, and test a small, real-money experiment in a side account to learn your own behavior.
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