Risk Parity Radio

• Episode 432: A Transition Quandary, The 25 x 4 Portfolio, RPR On Afford Anything Podcast, Other Stuff And Portfolio Reviews As Of June 20, 2025

  In this episode we answer emails from Isaiah, Jack, Jon and Luke.  We discuss preliminary transition issues and de-risking, Jack's "25 x 4" risk parity style portfolio, Invictus and similar themes, treasury bonds and gold as co-diversifiers and ESG funds.  And revel on how we Tom Sawyer'ed Paula Pant into creating a nice 'Risk Parity Portfolio Blueprint" for us.And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.To donate to the Top of the T-Shirt campaign and double your fun, please visit the Father McKenna Center donation page and note "Risk Parity Radio Match" when making your contribution.Additional Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterAfford Anything Podcast Episode:  #618: How to Retire at 50 While Supporting Aging Parents, with Frank Vasquez - Afford AnythingPaula Pant's Risk Parity Radio Blueprint:  Frank Vasquez Risk Parity Portfolio Giveaway.docxClaudia Moise Paper:  Flights to Safety, Volatility Risk, and Monetary Policy by Claudia E. Moise :: SSRNProfessor Aswath Damodaran on ESG Funds:  The Difficult Truth about ESG Investing with Aswath DamodaranFRDM Fund:  FRDM – Freedom 100 Emerging Markets ETF – ETF Stock Quote | MorningstarBreathless AI-bot Summary:What happens when retirement portfolio theory meets real-life investment challenges? In this illuminating episode of Risk Parity Radio, Frank Vasquez responds to listener questions that cut to the heart of creating resilient, diversified portfolios for financial independence.A military member with six years left before retirement asks how to transition from a heavy equity allocation to a risk parity approach without triggering unnecessary tax consequences. Frank offers practical guidance on using existing retirement accounts to begin de-risking immediately, demonstrating how macro allocation principles can work within institutional constraints. The advice highlights a crucial lesson: reducing overall market exposure takes precedence over perfecting individual asset selections.The psychological challenges of portfolio construction take center stage when a medical professional shares his "25 by 4" portfolio, showing equal allocations to large cap blend, small cap value, gold, and intermediate treasuries. While validating the approach, Frank addresses the emotional resilience needed when certain assets inevitably underperform for extended periods. This conversation exposes a troubling disconnect between certified financial planning education and practical portfolio construction, particularly regarding gold's vital diversification benefits.Misconceptions about long-term treasury bonds receive special attention, with Frank explaining why their value in risk parity portfolios transcends historical performance during falling interest rates. Their tendency to show negative correlation with stocks during recessions provides the portfolio protection that enables sustainable withdrawal strategies.For those interested in values-based investing, Frank challenges the notion that commercial ESG products truly align with personal ethics. His recommendatSupport the show

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• Episode 431: Websites And Roundtables And A Couple New Funds And Gold vs. Bonds

  In this episode we answer emails from Luc, Craig, Luke and Lucky.  We discuss updating the website, my recent roundtable on the Stacking Benjamins podcast, Achilles heels, and the inherent problems with not using proper forecasting techniques applied to CAPE ratios and other things, new funds like AVUQ and FFUT, and gold versus bonds in a portfolio.Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterStacking Benjamins YouTube Live Stream Roundtable:  Decumulational Strategies: The Special Retirement Spend Down Strategy RoundtableListen Notes Link:  Risk Parity Radio (podcast) - Frank Vasquez | Listen NotesInterview of Bob Elliot on the Compound Podcast:  The Blue Chips of Junk | TCAF 175Morningstar AVUQ:  AVUQ – Avantis U.S. Quality ETF – ETF Stock Quote | MorningstarBreathless Unedited AI-Bot Summary:What's the real Achilles heel of risk parity investing? It's not what you might expect. While many point to historical data limitations, the true challenge is psychological—accepting lower returns during bull markets in exchange for better protection when everything crashes. This fundamental trade-off defines the strategy's purpose: enabling you to spend more money now rather than maximizing wealth at death.The forecasting techniques that guide our investment decisions matter tremendously. Drawing from experts like Kahneman, Tetlock, Duke, and Gigerenzer, we explore why base rates (long-term historical averages) consistently outperform crystal ball approaches like CAPE ratios. When investment professionals try predicting market returns based on current valuations, they're often spectacularly wrong—more so than if they'd simply used historical averages. Remember: in forecasting, being less wrong beats being precisely incorrect.The gold versus bonds debate continues to evolve. Bob Elliott, formerly of Bridgewater, suggests that since abandoning the gold standard in the 1970s, gold has performed as well as or better than bonds as a stock diversifier. While 30% gold allocation might seem excessive to some, it could make sense for those concerned about currency risks. Historical context shows both assets have experienced extended periods of outperformance, making a combined approach more resilient than trying to predict which will shine next.We've entered a golden era for do-it-yourself investors, with new ETFs constantly emerging to fill specific niches. Avantis recently launched AVUQ for quality growth exposure, while Fidelity introduced FFUT for managed futures—both reflecting growing demand for sophisticated investment options previously unavailable to retail investors.Don't forget our ongoing campaign supporting the Father McKenna Center for hungry and homeless people in Washington DC. Your donation not only helps those in need but also moves you to the front of our email response line. As we explore these complex investment topics together, we remain committed to freely sharing knowledge rather than hiding it behind paywalls—continuing the spirit of open collaboration that defined the early FIRE movement.Support the show

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• Episode 428: A Cornucopia Of Listener Generosity, Intermediate Term Portfolios, Resources And Portfolio Reviews As Of May 30, 2025

  In this episode we answer emails from Anonymous, Tim, Mark and Luc.  We celebrate the overwhelming generosity of our listeners and discuss using risk parity style portfolios for intermediate savings, heavy metal, tax efficient portfolio management, and some investing and retirement resources.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.To donate to the Top of the T-Shirt campaign and double your fun, please visit the Father McKenna Center donation page and note "Risk Parity Radio Match" when making your contribution.Additional Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterFIRE Takes Podcast Page:  FIRE Takes PodcastMichael Kitces Page and Resources:  Kitces.com - Advancing Knowledge in Financial PlanningAndy Panko Resources:  FREE Retirement Planning EducationCody Garrett Page and Resources:  Meet Cody - Measure Twice FinancialSean Mullaney Page and Resources:  The FI Tax Guy – The Tax Efficient Path to Financial IndependenceWade Pfau Book:  Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success (The Retirement Researcher Guide Series): Pfau, Wade: 9781945640155: Amazon.com: BooksAshvin Chhabra Book:  Amazon.com: The Aspirational Investor: Taming the Markets to Achieve Your Life's Goals eBook : Chhabra, Ashvin B.: Kindle StoreAQR and Antti Ilmanen:  AQR Principal Antti Ilmanen Authors New Book on Investing in a Low-Return EnvironmentBreathless Unedited AI-Bot Summary:Have you ever wondered what to do with money that's not for emergencies but not quite for retirement either? Today we tackle the often-overlooked middle ground of intermediate-term savings and reveal why risk parity strategies offer a powerful solution for these "in-between" financial goals.Most financial advice focuses heavily on either emergency funds or retirement accounts, leaving a significant gap in guidance for money you're saving for goals 3-10 years away. Whether you're planning for a home down payment, vehicle purchase, or building a Roth conversion ladder, the traditional advice to simply park this money in savings accounts is leaving significant opportunity on the table. We explore how portfolios like the Golden Butterfly and Golden Ratio can provide meaningful growth while keeping drawdowns manageable, typically recovering within 3-4 years at most.Beyond just investment selection, we dive into the tax efficiency of managing these portfolios in taxable accounts. Unlike high-yield savings accounts that generate ordinary income taxed at your highest marginal rate, properly managed risk parity portfolios create opportunities for tax-loss harvesting and strategic rebalancing. We explain how directing new contributions to underperforming assets eliminates the need for selling investments to rebalance, substantially reducing your tax burden while maintaining your desired allocation.For younger investors, managing an intermediate-term risk parity portfolio serves anothSupport the show

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