Risk Parity Radio

In this episode we answer emails from Optimus Bill, Mark and Ryan.  We discuss donor advised fund sponsor Daffy and a strips fund portfolio substitution, the challenges of figuring out accumulation without getting caught up in chasing shiny objects and magic investing buttons, and discuss commercial risk parity funds and why they probably won't work for your goals.  Errata:  I said "Mark" when I meant "Michael"  Mauboussin.

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.

Links:

Fairfax CASA Donation Page:  Donate - Fairfax CASA

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Catching Up To FI Podcast with Daffy:  A Donor-Advised Fund For You (Daffy): Democratizing Philanthropy for Everyone | Adam Nash | 200

White Coat Investor Article:  150 Investment Portfolio Examples | White Coat Investor

Infinite Loops Podcast with Jim O'Shaughnessy and Cliff Asness:  Surviving the Meme Stock Bubble | Cliff Asness

ETF Slop Video:  The Rise of ETF Slop

Sample Portfolio Idea for Mark:  https://testfol.io/?s=flOaQQOXaH4

Breathless Unedited AI-Bot Summary:

A community gift turns into a movement: we celebrate more than $13,000 raised for Fairfax CASA and announce a surprise $20,000 match, then open the books on how donor-advised funds make generosity simpler, cheaper, and more strategic. From flat-fee platforms to custom portfolios and social giving, we share how to build a micro-foundation that aligns your values with long-term impact.

Then we zoom out to the decisions that actually move the needle. Forget the hunt for a magic fund—macro allocation drives results. For savers 20-plus years from retirement, we unpack a clean, high-conviction approach: 100% equities with a two-fund core that pairs large-cap growth with small-cap value for balanced offense. We explain why investors underperform their own holdings, how to avoid shiny-object drift, and the simple rules that keep compounding on track.

Curious about adding more “oomph” without reckless leverage? We walk through using Treasury Strips like ZROZ to amplify bond duration and free space for equities or gold. We also answer a big question: do risk parity ETFs solve the problem? They exist, but most are built for elegant theory, not your actual goals—be it maximum accumulation or higher safe withdrawal rates. For families who want one-ticket simplicity, we highlight how long-standing workhorses like Vanguard Wellington or Wellesley can deliver steady spending without complex overlays or buckets.

We close with a brisk market recap, why alternatives like managed futures can shine during turbulence, and the habit that consistently wins: do nothing when your plan is sound. 
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In this episode we answer emails from Connor, Zachary and Brian.  We discuss fund selection, doing the Big Law dance, portfolio construction basics and analyzing alternatives, and a partial retirement drawdown scenario involving early withdrawals, avoiding temptations to market time based on recent performances and funding a vacation property with a dedicated portfolio.

But first we thank donors supporting Fairfax CASA and share Jillian Johnsrud’s moving story about adoption, foster care, and how a steadfast CASA changed her kids’ lives.

Links:
Fairfax CASA Donation Page:  Donate - Fairfax CASA

Father McKenna Center Donation Page:  Donate - Father McKenna Center

"Retire Often" by Jillian Johnsrud:  Book | Retire Often

Bridgewater Paper Describing the Four Quadrant Model:  Microsoft Word - 2009.12 AW Info Pack.doc

Blog Article Describing Risk Parity Principles and the Four Quadrant Model:  15 Uncorrelated Assets | SSiS

Video Describing Correlations of Alternatives (start timestamp 1:10): iMGP DBi Managed Futures Strategy ETF Update with Andrew Beer | January 2026

Breathless AI-Bot Summary:  

A single constant can change a child’s life. That’s the heart of Jillian Johnsrud’s adoption and CASA story, where a determined CASA volunteer carried the full thread of her kids’ journey through seven case managers and years of upheaval. We open with gratitude for Fairfax CASA donors and a candid look at what Court Appointed Special Advocates really do: show up, remember, advocate, and persist in an unreasonably hard job that needs every ounce of support we can give.

From there we pivot to the questions you care about. We unpack why SCHG works fine as a large cap growth sleeve and then dive into a pragmatic guide to risk parity. Using a four-quadrant map of growth and inflation, we explain how to pair equities with long-term Treasuries, gold, and managed futures to raise safe withdrawal rates without pretending to predict the future. You’ll hear how uncorrelated return streams and disciplined rebalancing—Shannon’s Demon in action—turn volatility into a feature, not a bug. We also draw a bright line between true diversifiers and crowded “alts” that secretly track stocks.

We get tactical: how to treat accounts as one portfolio while keeping extra liquidity in taxable during a low-stress, lower-income phase; when to tax-gain harvest; and why tilting heavily into whatever just outperformed (gold now, bonds avoided) is classic recency bias. For those juggling work and life pivots, Frank shares hard-won Big Law advice: build stamina, communicate clearly, be relentlessly reliable, and stay curious as practice areas shift. Finally, we brainstorm a small, dedicated portfolio to fund a shared family vacation home, and why this sandbox is perfect for testing a slightly higher equity mix you can always top up.

If this resonates, help us amplify the work of Fairfax CASA, then subscribe, share the episode with a friend who’s rethinking their allocation, and leave a quick review so more DIY investors can find the show. Your support keeps the conversation smart, practical, and focused on what actually works.
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In this episode we answer emails from Jeffrey, Bryan, and Erik.  We discuss the trade-offs of direct indexing in small cap value, why modest leverage on a diversified mix can outperform stock-heavy portfolios with fewer drawdowns, and modelling an early extra spending plan for retirement.  And talk about forecasting with Base Rates.

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.

Links:

Fairfax CASA Donation Page:  Donate - Fairfax CASA

Father McKenna Center Donation Page:  Donate - Father McKenna Center

Bigger Pockets Money Small Cap Value Discussion:  Small Cap Value Funds for FI: Why AVUV?

Bryan's Risk Parity Explainer Videos:  Kardinal Financial - YouTube

Bryan's Leveraged Golden Ratio Portfolios:  testfol.io/?s=jXswQKw6avr

RSST and GDE Comparisons:  testfol.io/?s=dc0nz7avynF

Ben Felix Video On Leverage:  Investing With Leverage (Borrowing to Invest, Leveraged ETFs) (youtube.com)

Erin on Money Truth About Spending Smirk and LTC:  The Retirement Spending Smile Is Dead (Here’s What the Data Actually Shows)

Breathless Unedited AI-Bot Summary:

Markets don’t hand out easy wins, so we lean into clarity: what actually works for DIY investors, what’s noise, and how to make choices you’ll stick with when regimes shift. We start with a pointed look at direct indexing in small cap value. The promise of tax loss harvesting sounds great, but the reality is messy: hundreds to thousands of tiny positions, frequent graduations at index cutoffs, and “optimized” portfolios designed to hug an index rather than truly replicate it. We break down why small cap value behaves more like equal weight, why that raises the bar for tracking and taxes, and where direct indexing makes more sense—large caps, cap-weighted sectors, and places where a handful of names dominate the exposure.

From there, we unpack a smarter use of risk: applying modest leverage to a diversified portfolio instead of dropping diversifiers to chase higher returns. Think of it as scaling a better mix rather than concentrating into stocks. We compare tools like NTSX, GDE, GOVZ, and managed futures, and discuss why the 1.25x to 1.7x range often hits the sweet spot for return per unit of pain. We also stress-test composite ETFs against DIY equivalents for transparency and control. The goal is a higher Sharpe ratio and fewer bone-crushing drawdowns, not bravado.

Planning meets practice when we tackle a common early-retirement question: how to model a 10,000-dollar travel burst for the first decade. The simplest answer is often best—set aside 100,000 dollars and spend it down—or use a Monte Carlo tool that handles time-varying cash flows. Keep three to five years in cash, refill from gains, and let base rates guide expectations. Research shows a spending bump near retirement and a gentle decline afterward for most households, with far fewer late-life spikes than fear-based sales pitches suggest.

We close with portfolio reviews across eight sample allocations, highlighting how gold, commodities, and managed futures have led while mega-cap tech cooled and small cap value caught a bid. 
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In this episode we respond to emails from Nick, Ginna, Ashley, Chris and Sara.  In our Queen Mary segment where we are raising money for Fairfax CASA, we express our gratitude for the outpouring of listener support and tell Noah and Taylor’s story of reunification.  We then dive into two big portfolio questions: do managed futures replace gold, and how to fund an eight-year break without derailing long-term plans. We build a conservative drawdown portfolio, weigh taxes in taxable accounts, and explain why good portfolio construction beats market timing.

Links:

Fairfax CASA Donation Page:  Donate - Fairfax CASA

Wilka's in NYC:  Wilka's Sports Bar | Women's Sports Bar | New York, NY, USA

Chris's Portfolio Constructions:  testfol.io/?s=lwnOaJGvzDj

Sara's Portfolio Analyses:  testfol.io/?s=htNZVoZOZn4

Breathless Unedited AI-Bot Summary:

Start with purpose: a child’s safety, a mother’s grit, and a community that shows up. We open with a moving Fairfax CASA story—Noah and Taylor—that reminds us why steady advocacy and second chances matter. Listener donations pour in, and Mary shares how CASA pairs rigorous oversight with real compassion. From there, we pivot to the other kind of safety net: portfolios designed to fund real lives.

A longtime listener asks if managed futures make gold redundant. We break down what trend-following actually captures, why gold’s long history and different crisis behavior still earn it a seat, and how the two hedges fit together when you care about drawdowns, not bragging rights. Then we tackle Sarah’s bold plan: an eight-year pause from work to care for family, spending about $90k per year from taxable savings before returning to the workforce. Rather than a classic risk-parity blend, we map a more conservative drawdown portfolio: roughly 30% equities with a large-cap value tilt and a sleeve of property-and-casualty insurers, 25% cash and short-term Treasuries for three years of runway, 25% intermediate Treasuries for recession insurance, and 20% in alternatives split between gold and managed futures. The goal isn’t to win a backtest—it’s to keep maximum drawdowns shallow and flexibility high.

We also unpack taxes in the 0% capital gains band, why ordinary-income assets aren’t the villain during low-income years, and how realizing gains strategically can preserve ACA subsidies. For long-horizon IRAs, we keep it simple: a 100% equity mix across large-cap growth or blend and small-cap value, with an optional tilt to international small-cap value for broader diversification. No crystal balls, no heroic timing—just construction that respects time frames and human needs.

If this episode helps you think differently about money, advocacy, or how to buy time for what matters, share it with a friend, subscribe, and leave a quick review so more DIY investors can find it.

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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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