Risk Parity Radio

Episode 470: Short Term Bonds, A Growth Plan For A Late Starter, A Birthday Wish And Portfolio Reviews As Of December 5, 2025

• Frank Vasquez • Season 6 • Episode 470

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In this episode we answer emails from Adam, Cha Cha, and TJ.  We discuss how cash and short-term bonds affect safe withdrawal rates, why the Golden Butterfly’s allocation is a preference not a rule, and how to build a growth-first plan when you’re starting late.  And we wish Happy Birthday to Mick the Mugga Mugga.

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

Many Happy Returns Podcast Featuring Tyler:  How to Pick Your Perfect Portfolio, with Tyler from Portfolio Charts

Video Summary of Recent Bronnie Ware Interview:  https://drive.google.com/file/d/1XO1H7719LTel-WrwUABpMaAzdFk6-juv/view?usp=sharing

Catching Up To FI Podcast:  Financial Independence - Catching up to FI

Excess Returns Podcast:  Excess Returns Podcast | Excess Returns Podcasts - Helping Make You a Better Investor

Swedroe Factor Investing Book:  Book Review: Your Complete Guide to Factor-Based Investing | CFA Institute Enterprising Investor

Breathless AI-Bot Summary:

Worried your portfolio is heavy on cash but light on purpose? We unpack the real trade-offs behind short-term bonds, money markets, and the Golden Butterfly’s famous “comfort cushion,” then show how a few precise tweaks can lift safe withdrawal rates without blowing up your sleep. Listener questions drive the heart of the episode: how much cash is too much, whether VTIP truly hedges better than VGSH, and why cash management rarely changes outcomes even though it feels reassuring.

From there we shift to a late-starter’s dilemma: chasing 8–10% average returns over a decade without gambling. We get practical about the only two ways to beat the market, why stock-picking “wins” often just mirror factor exposure, and how to use a simple, research-backed pairing—large-cap growth with small-cap value—to seek higher expected returns. We also cover when international tilts help, how currency drives comparisons more than people think, and where bonds, gold, and REITs fit as you move closer to financial independence.

Our take is direct and usable: minimize inert cash, diversify for shallower drawdowns, and reserve complexity for places that pay. Build growth while the gap to FI is wide, then add ballast on purpose as you near the goal. If you want a sturdier plan and a quieter mind, this conversation clears the noise and spotlights the levers that matter.

Enjoy the show? Follow, rate, and share it with a friend. Send your questions to Frank at RiskParityRadio.com, and if it helped, leave a quick review so more DIY investors can find it.

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Voices:

A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. A different drummer.

Mostly Queen Mary:

And now, coming to you from Dead Center on your dial, welcome to Risk Parity Radio, where we explore alternatives and asset allocations for the do-it-yourself investor. Broadcasting to you now from the comfort of his easy chair, here is your host, Frank Vasquez.

Mostly Uncle Frank:

Thank you, Mary, and welcome to Risk Parity Radio. If you have just stumbled in here, you will find that this podcast is kind of like a dive bar of personal finance and do-it-yourself investing.

Voices:

Expect the unexpected.

Mostly Uncle Frank:

And we only have a few mismatched bar stools and some easy chairs. We have no sponsors, we have no guests, and we have no expansion plans. Along with what our little free library has to offer. Today on Risk Party Radio, it's time for our weekly portfolio reviews of the eight sample portfolios you can find at www.riskperdiRadio.com on the portfolios page. Yeah, not much happened. It's probably a good thing.

Voices:

I'm putting you to sleep.

Mostly Uncle Frank:

But before I put you to sleep with that I'm intrigued, my dear. And first off. First off, I have an email from Adam.

Voices:

One Adam, twelve. One Adam 12. Possible. Four, five, nine suspects, there now.

Mostly Uncle Frank:

And Adam Wright.

Mostly Queen Mary:

Hi, Frank. I hope you had a wonderful Thanksgiving. Thanks again for your retirement hobby and the wonderful financial education that you have provided to me and so many others who have discovered Risk Parity Radio. I discovered your podcast this spring just as my portfolio neared a level that would provide me with financial independence. I enjoy meaningful work, and at age 50, I plan to continue for at least four more years, but I also sleep comfortably at night after transitioning to a risk parity style modified golden butterfly portfolio, knowing that a big drawdown is much less likely to prevent me from having job optionality going forward. Now you can also use the ball to connect to the spirit world. But prior to discovering risk parity principles, I feared that the incredible stock market run-up over the last several years would reverse itself just in time for me to exit the workforce. I'm not a gambler by nature, and your podcast has helped me convert to a portfolio that makes tremendous sense to my rational brain.

Voices:

Yes!

Mostly Queen Mary:

I have two fairly quick questions about short-term bonds that I'd love to get your input on as I think about minor tweaks to my portfolio, which is currently 20% VTI, 10% AVDV, 10% DFSV, 5% VNQI, 15% GLDM, 5% DBMF, 20% TLT, 10% VGSH, and 5% VTIP. First, I've heard you say on many podcasts that the optimal amount of cash in a risk party style portfolio is less than 10%. But yet the Golden Butterfly portfolio contains 20% in short-term bonds. As best I can tell, short-term bonds on average essentially return about what money market funds return over long time periods. I'm assuming you aren't referring to cash in a checking account when you say less than 10% cash, so I'm wondering if you can clarify the tension between that recommendation and golden butterfly allocations. Yes, we can! Secondly, I know you don't feel there's a place for VTIP in a risk parity-style portfolio, and this is a holdover from a portfolio I designed about six years ago before learning about risk parity investing. However, I've also heard you mention at least once that VTIP can have benefits over traditional bonds if inflation is higher than expected. As I consider whether or not to transition out of this position, I'm wondering if you feel that there's any potential benefit to hedging the short-term bond portion of the portfolio by allocating a portion to VTIP and VGSH instead of just having all of the allocation in the VGSH bucket. Thanks again for all you do, and just because you asked for the reminder, I did set up an annual contribution to the Father McKenna Center a couple of months ago through my DAF. Best to you, Adam from Colorado.

Voices:

There's money over there, but not for long. In my worry.

Mostly Uncle Frank:

If you give to the charity, you get to go to the front of the email line, as Adam has done here. And three of our emailers have done today. I'm not sure they'll be the fourth, we'll see. There are two ways to do that. First, you can go to the Father McKenna website to the donation page and donate directly there. Or you can go to the support page at www.riskprediorio.com and become one of our patrons on Patreon. Either way, you get to go to the front of the email line.

Voices:

You're in the wrong shape, buddy. Come on. Oh, I must be in the front.

Mostly Uncle Frank:

Make sure you mention that in your email so I can duly move you to the front of the line. Now getting to your questions, first about the golden butterfly.

Voices:

That's gold, Jerry, gold.

Mostly Uncle Frank:

Well, as you ought to know, the golden butterfly is not something that I invented. It was invented by Tyler at Portfolio Charts. And he did not invent it specifically as a drawdown portfolio, even though it happens to work very well for that purpose. He wanted something that was like the original permanent portfolio from Harry Brown, but that was a little more aggressive. And so he essentially changed the allocations there from one quarter in stocks to about 40% in stocks and made some other adjustments to the other asset classes in there. So he was not specifically thinking about high safe withdrawal rates when he designed that portfolio. Where the 10% limitation on cash comes from in this context is comes from Bill Bangin's work. And Bill Bang's work, both the original work and his most recent work, show that if you have more than about 10% in cash or cash equivalents in a drawdown portfolio, it will tend to reduce the safe withdrawal rate. And this is an example where we're applying Bruce Lee's principles of take what is useful, discard what is useless, and add something uniquely your own. So, yes, you're going to get slightly higher safe withdrawal rates if you take that golden butterfly portfolio and reduce the short-term bond allocation to something less than 20%. 10% would be a good number. But it's still going to be a fine drawdown portfolio as is, if you prefer the more conservative approach, because the advantage that it has is just shallower drawdowns and shorter drawdowns, or mostly shallower drawdowns, than say something like a golden ratio portfolio or a weird portfolio, if you want to look at portfolios for comparison on portfolio charts. There is actually an interesting discussion of the golden butterfly portfolio in the most recent interview of Tyler on the Many Happy Returns podcast, which is from a couple of financial advisors in the United Kingdom. I will link to the show notes. It is really worth listening to because when they're asking him about the golden butterfly portfolio, the one thing he says is that, yeah, if I was going to make one modification to it, it would probably be to reduce the cash in some circumstances and allocate that to something else. Now, cash in its purest form is actually things of one year or less in duration, is how you would typically define that. And so that three-year aspect of the short-term bond fund is more like an intermediate term bond fund than a short-term bond fund, but I'm kind of splitting hairs there. In the end, I think this is more of a how well do you want to sleep at night kind of preference. And also how much do you want to have potentially left over at the end, because the more stocks you put in a portfolio, the more likely it is to grow over long periods of time. But it is going to detract from the safe withdrawal rate once that gets over 70 or 75%. In the end, I think what you need to keep in mind is that what we're trying to do here is apply principles, and in particular that holy grail principle about diversification, and not so much formulas.

Voices:

Go and tell your master that we have been charged by God with a sacred quest.

Mostly Uncle Frank:

So it does not really matter the specific percentages in the golden butterfly or the golden ratio or some other portfolio you might find on portfolio charts. The point of this is all of those kinds of portfolios are adhering to this holy grail principle and so are more likely to yield you high safe withdrawal rates, as opposed to something that's just not as well diversified. And where you ultimately end up on the specifics has more to do with personal preferences in the end. You would say that the golden butterfly is on the most conservative end of portfolios that tend to have the highest safe withdrawal rates. Whereas something like the weird portfolio at portfolio charts is on the other end of that. And something structured like the golden ratio is somewhere in the middle.

Voices:

A number so perfect.

Mostly Uncle Frank:

Perfect. Alright, moving to your second question about VTIP. That's a short-term TIPS fund. And honestly, with respect to short-term bond funds, it doesn't really matter that much whether it's TIPS or Treasuries or even corporates, because it's the duration of those things that matters the most because they roll over so often. And because they are close to cash anyway, they just don't have much volatility. They also don't have much potential. And which one you use specifically is unlikely to have much of any difference on your overall results as far as the portfolio is concerned. Simply because they're relatively inert when you compare them with the other assets. So if it's convenient to hold on to that for tax purposes or just because you like it and you don't mind having another fun to fiddle around with, that's just fine. It's not gonna matter. But on the other hand, this really isn't much of a hedge. If you're thinking that it's a hedge, forget about it. It really isn't doing a whole lot there. Simply because these things roll over so quickly that even in inflationary environments with rising interest rates, they're going to pick up that new higher interest rate pretty quickly. And it's really not going to matter that much in the end that one of them has the inflation component and the other one doesn't. Because we're still talking about minuscule returns and minuscule volatility either way. VTIP may have a longer duration than VGSH. I haven't checked it recently, but that would be the only significant difference there. But just some closing thoughts on your email. I think often in personal finance and what I see a lot of advisors doing and people talking about is too much about the management of cash. That the management of cash does not matter that much. Whether you're using a short-term tips fund or a short-term bond fund or a money market fund or corporate bonds for that, whether you're arranging it in buckets or ladders or flower pots or whatever you put it in, it just doesn't matter.

Voices:

Forget about it.

Mostly Uncle Frank:

And a lot of effort and time is wasted on fooling around with that stuff. When the reality of it is if you have too much of it, it is going to reduce your overall safe withdrawal rate, even though it may make you feel better. So whenever you are listening to somebody and they're talking about all of this cash management on the front of a portfolio, whether it's in a pie cake or something else like that, that might be good psychology for a lot of people just to see all the things lined up in their buckets or flower pots or whatever. But that is not really moving the needle in terms of real portfolio management, real efforts that are going to increase your safe withdrawal rate. And it may be counterproductive. It may be good marketing, it may be good psychology, it may make you feel good, but it is not good financial planning to be hoarding lots of cash and rearranging it in various ways or using a bunch of different funds to manage cash with.

Voices:

That's not how it works. That's not how any of this works.

Mostly Uncle Frank:

That is really a waste of your time from a financial point of view.

Voices:

Am I right or am I right or am I right? Right, right, right.

Mostly Uncle Frank:

So that's all to say. You are fine with what you've got right now, and you shouldn't sweat the details, especially on the cash allocations to this. And so thank you for being a donor to the Father McKenna Center, and thank you for your email. Second off, we have an email from Cha Cha.

Voices:

I want you to be Chacha Dingo Goryo.

Mostly Queen Mary:

How you doing, Zuko Baby?

Mostly Uncle Frank:

And Cha Cha writes.

Mostly Queen Mary:

Hi Frank, my big brother Mick the Mugga Mugga is a regular listener of your podcast and has made me a fan as well. He has spent many an hour helping me with my own financial plans thanks to all he learned from Risk Parity Radio. Yeah, baby, yeah! I'd like to make a contribution to your Patreon in honor of Mugga, who celebrates his birthday on December 7th. Any chance he could get a surprise shout-out on the pod? Thanks and happy holidays. Your friend Cha Cha.

Voices:

They call me Cha Cha, because I'm the best dancer at Safe Bernadette with the worst reputation.

Mostly Uncle Frank:

Well, Chacha, your wishes are command. At least if you're a donor to the Father McKenna Center. It's from a relatively recent movie, and I think most of you will be able to guess where it comes from.

Voices:

That looks like a gun. It's my birthday!

Mostly Uncle Frank:

We were at. Which is very pleasant to listen to. I'll put it at the end of this email in the break before the next one. But I'm glad you're getting a lot out of the podcast, and it's nice to hear that people such as your brother are using the information they find here to help their family and friends with their own financial plans. And I'm also very amused by it. Which is actually quite important, as I've learned recently. I was listening to an interview of Bronny Ware about the five regrets of the dying. And at the end of the interview, they were talking about, well, how do you reverse that? What are the things you should work on positively? And she said the people that seem to do the best at the end of life have worked on three things. The first one is relationships. The third one is some kind of spirituality or religious beliefs, interpreted broadly. But the second is actually humor. And I'm doubling down on that, baby.

Voices:

I just got back from Venice and boy, my mommy, my mom's tired. Very wonderful city. You're gonna learn a lot of Venice. You wanna learn how to make a Venice blind? They are a left riot. First of all, they are so poor. That they have only one gun.

Mostly Uncle Frank:

So it's nice to know that my fixation with humor is also good for my well-being.

Voices:

This is pretty much the worst video ever made.

Mostly Uncle Frank:

So I hope your brother Mick the Moogamga, or is it Mick the Mugga Mugga, enjoys his birthday. Thank you for being a donor to the Father McKinnon Center, and thank you for your email. And I think we've got time for one more email since this is a long one, which leads us to last of last enough. We have an email from TJ.

Voices:

TJ, what happened? What are you? Were you able to jump on the human? Wait a minute, wait a minute. It's a big minute coming in the moment's gonna TJ Wrights.

Mostly Queen Mary:

Hi, Frank and Mary. Due to the early in life bad luck of getting connected with a broker whose self-serving advice lost most of my savings, being turned off to investing after that, working to try and make the world a better place for minimal financial compensation during my prime earning years, and a significant medical event a few years ago that cost me a lot of missed work and some hefty medical bills, I am getting a far too late start on my retirement savings. My current work and saving habits are helping me to catch up, but I need some solid growth on my savings to make up for all the lost time. Given current socioeconomic conditions with very high market valuations, AI job displacements, a divided dysfunctional government, and a nation weighed down by massive and rapidly growing debt, it seems to me the risk from investing will be significantly elevated over the 10-year timeline that I have left to save for my hoped retirement age of 67. This conundrum is what attracted me to your Risk Parity Radio podcast. While being out of the market the last several decades has cost me a fortune, going all in near the top of the market could put me down for the count over the next several decades. My primary question is, how can I best protect myself from the potential risks while ideally generating 8-10% average annual returns over the next 10 years? Is there a portfolio mix that can maximize growth and still provide meaningful protection from downturns? I began investing again on my own this time back in late May. I have been beating the SP 500 by a fairly healthy margin, picking up individual growth stocks on the dips, along with putting about 10% of my funds into a gold ETF. But my recent forays over the past month trying to diversify and add more safety have had more mixed results. These include dividend aristocrat stocks, MLPs, ETFs, mostly AVUS, AVUV, FENI, and AVDV, about 10% in bond funds, mostly VGLT and TAGG, and a smaller amount in REITs, mostly O. My investments are split between a Roth IRA, self-employed 401k, and an individual taxable account. I suspect that my beginner's luck with growth stock picking will not continue indefinitely, especially in less bullish markets like the one we may be turning towards now. So I would appreciate any thoughts and suggestions you might have on building a diversified and resilient growth-focused portfolio that I can later transition into a safe and sustainable drawdown portfolio. Thank you for the valuable information you are sharing through your podcast, TJ. P.S. I contributed the little I could spare to the Father McKenna Center both in hopes of bumping my question up the list and because I know there are many in far more precarious situations than the one I and my family are currently in. Sounds like you and the center are working hard to help some of these people, and I wish you the best of luck with those efforts.

Voices:

If you want to keep this whole belly alone in business, you better have a family, real quick.

Mostly Uncle Frank:

Well, first off, thank you also for being a donor to the Father McKenna Center. And rest assured, it does not matter if you cannot give a whole lot of money. Different people have different abilities to give, depending on their situation. And we are taught to appreciate the small gifts from those who do not have as much to give. Because they may be a larger percentage of their overall wealth. But yes, the people we assist at the Father McKenna Center are in much more precarious positions than any of us are, although some of our listeners were in those positions at some point in their life. So the people we help are not as different from us as you might think. Or some people might think. Okay, let's get to your email. So you're in catch-up mode, and a lot of people are in catch up mode. It's good that you're making an effort to do that whenever you're making the effort.

Voices:

All we know is some get the spark and say, I'm going to change my life. Whatever it starts with. I'm a candidate. I'm ready to go and change my life. I invite you on that journey. Once you look back on it, you will never turn back. You'll never go back to the old ways and the old neglect. Never.

Mostly Uncle Frank:

If you don't already, I would invite you to listen to the Catching Up to Fi podcast. Also with my friend Bill.

Voices:

Oh hey everybody, it's me, Mr. Bill, and I'm on the way to the studio to take my new show, Fungo, Mr. Bill Presente.

Mostly Uncle Frank:

And my friend Jackie. Jackie Brown, set no substitutes.

Voices:

Woo!

Mostly Uncle Frank:

Who address these very situations of people that are only getting started in their 40s or 50s on saving enough for retirement. And there are lots of them. There are probably more people like that in the United States than people that have been diligent savers all their life. So they have a nice podcast and a nice Facebook page that I would encourage you to partake of because you will find a lot of other people in similar circumstances to your own. But your overall question is whether there is a way to generate high returns without taking more risk. And the answer to that is really no, there isn't. If you want higher returns, you do have to take more risk. But there are some things you can do. First, you you should recognize that there are only two ways that you can actually beat the market, and they're not diversification. One is take a concentration in things you think are going to do well, and maybe you'll get lucky and maybe you won't with those. And the second is to take leverage, which is essentially borrowing more money to invest, which I wouldn't recommend in your circumstances.

Voices:

You need somebody watching your back at all times.

Mostly Uncle Frank:

But those are really the only two ways of beating the market overall, and diversifying into other assets like gold, even though it's performed very well, or bonds or REITs or other things like that, are actually not likely to increase your returns. They will decrease your drawdowns. That's what diversification is best for. But let's talk about your recent experience. You say you've been beating the market, the S P 500, by picking individual growth stocks. And the reason that is working is not because you have good stock picking ability. The reason that is working right now is because growth stocks, particularly large cap growth stocks, are a favored asset class. And over long periods of time, you will find that different asset classes go in and out of favor. The way assets are generally classified is by their factors. So people say large cap growth, small cap value. That is a size factor, large versus small. You also have mid. And then there is a factor of value versus growth. So when the stock market is performing well, usually the growth stocks are outperforming the value stocks. And when the stock market is performing poorly, usually the value stocks are outperforming the growth stocks. But which ones are going to do well in the next period of time is largely a guessing game. Now, if you wanted to focus on large cap growth stocks, you would be better off just buying a fund that primarily invests in those. And that would be a fund like Vanguard's VUG, that's a large cap growth fund that holds all these things that you're probably investing in anyway, the Nvidia's of the world. And there are other ones. IWY is another large cap growth fund. If you wanted to invest in tech, there are things like VGT. These are all essentially large cap growth funds. And so the reason you're outperforming right now is because large cap growth is favored and it doesn't really have much to do with your ability to pick individual stocks, although it seems like it does. I just stare at my desk, but it looks like I'm working. This is also why services like the Motley Fool in particular really aren't offering a whole lot in terms of stock picking. Because if you look at what the makeup of the stocks they're picking, it's a lot of growth stocks and a lot of large cap growth stocks. And if you picked a large cap growth fund, you would see similar performance to a portfolio constructed of Motley Fool recommendations. So whenever you are looking at somebody's stock picks, what you should really be looking at is what kinds of stocks are these and how to compare to a fund of similar kinds of stocks. Because you do not want to be comparing large cap growth stocks in particular to just the generic SP 500. Large cap growth stocks, you are taking more risk to get that reward. It's not apples to apples comparing those two things. All right, let's talk about some of these other things you're investing in. So dividend aristocrat stocks, that is not going to help you. Those are essentially large cap value stocks for the most part. Those are something that you might want to hold when you are retired and are trying to reduce the volatility of your portfolio. But typically they underperform the market overall or just meet the market. Their advantage is lower volatility. If you are trying to grow your assets, they are not helpful. MLPs are a mixed bag because they are very heavily sector-oriented towards oil services, particularly pipelines and things like that. The main problem with those is that they generate a lot of taxable income and they may throw off K1s, which are awful things to have to deal with on your tax forms. They're partnership returns that you get that you then have to fill out additional tax forms to deal with that income. So for most people, and in your circumstance in particular, I can't see that those have any really role in your portfolio, either in increasing returns or reducing volatility. The ETFs you mention all tend to represent different parts of the market. The one AVUS, that is Avantis's basic large cap blend fund, similar to the S P 500. It also has a quality filter on top of it and is a little bit more value-tilted, but I wouldn't expect it to perform much different than the S P 500. AVUV is a small cap value fund. Small cap value is out of favor right now. And we don't know when it's going to get come back into favor, but it does make an excellent diversifier over long periods of time. Something like F-E-N-I, that is Fidelity's international fund. It's similar to a total market international fund, like VXUS, but I think it's a little bit better than VXUS. If you really wanted to get something that is more growth y, I would pick something like IDMO, which is going to outperform when large cap growth is doing better internationally. And AVDV is an international small cap value fund. Now, what you should know about international funds is that their relative performance to US funds or US stocks is largely determined by whether the value of the US dollar is going up or going down in a given year, which is largely unpredictable. Now, for most of the past decade, 15 years, the US dollar has been going up in value versus foreign currencies. And so US stocks have outperformed international stocks on a relative basis. This past year has been the opposite of that. And since the US dollar has been declining in value versus foreign currencies, international stocks have greatly outperformed U.S. stocks in that time period. I'm talking about international stocks of the similar kind. So international large cap growth has outperformed U.S. large cap growth. International small cap value has outperformed US small cap value. But most of that is related to the declining value of the US dollar in relation to foreign currencies and not due to any special attributes of those particular funds. And recall, those funds are groups of stocks. That's all an ETF is. It's just a bunch of stocks in a grouping that generally have similar attributes. So next looking at bonds and REITs, those probably are not going to help you grow your portfolio. They are used as diversifiers mostly. REITs typically perform just about the same as the SP 500 over time. Bonds typically underperform stocks over time, but are good when they are recessions. That's what they're really there for. To provide insurance or a cushion when there's a recession and stocks are actually dropping because of that. So overall, I think you can simplify what you're doing here, but it does depend on where you are in the accumulation game, if you will. If you are just getting started or don't have very much in accumulation already, you need to focus on investing essentially in 100% stocks because you need the growth out of it. And adding extraneous things like MLPs or REITs or bonds, or even gold are not likely to help you, although gold has been an exception recently. So if you wanted to simplify this to something that has historically outperformed, say the SP 500, a good pairing is large cap growth and small cap value. And so funds that would represent that on the US side would be VUG or IWY as large cap growth and AVUV as small cap value. On the international side, something like IDMO would represent large cap growth. It's termed a momentum fund, but it's large cap growth is where it sits. And something like AVDV would be the international small cap value that could go with that. So what typically outperforms the S P 500 over time is something that is half large cap growth and half small cap value. If that was just US, it would be V U G and A V U V. If you wanted to add an international component to that, you would add IDMO and AVDV, which you probably wouldn't put more than a third of your assets into those, meaning those two together. Now, will those outperform the S P 500 in the next 10 years?

Voices:

The crystal ball can help you.

Mostly Uncle Frank:

So you can take that for what it's worth, but it's probably worth something.

Voices:

So you can make me more money.

Mostly Uncle Frank:

Now, if you are getting closer to retirement, however, if you've got half of the money you need to reach your FI number, then you do need to start reducing the risk of your portfolio by buying other kinds of assets, which would include gold and bonds and things like that. But that's not a growth strategy. That is a strategy for reducing your overall volatility because you're close to winning the game. So those are my suggestions. I'd also suggest a book for you to read. It's a little advanced, but I think it's important for you to understand this. It's called The Complete Guide to Factor Investing. It's by Larry Swedro. It's published in 2017 or 2018. That basically gives you kind of guide to best practices by what professionals do, and it is not what amateurs typically do, but it is reflected on the recommendations or ideas that I just gave you. But that will give you a little bit more about the why. In the meantime, I would stay away from trying to pick stocks. You might get lucky, but you really are playing the lottery when you're doing that, particularly in your circumstance. You'd be much better off using funds because they hold a whole bunch of stocks with the same kinds of characteristics. And so you're not risking losing a whole lot of money in something, which can happen whenever you're investing in individual companies. And in order to invest in individual companies the right way, you really need to be studying their financials, their SEC filings and things like that. And if you're not willing to take the time to do that, and it does take a lot of time to do it properly, you shouldn't be doing it at all because it's too risky.

Voices:

No more flying solo.

Mostly Uncle Frank:

The other thing I would recommend you do is not watch any financial TV. Do not watch any of it or read a lot of the headlines because that kind of content encourages people to make bad decisions by jumping on the latest, greatest thing.

Voices:

You know, whenever I see an opportunity now, I charge it like a bull. Ned the bull, that's me now.

Mostly Uncle Frank:

Those headlines and that content is designed to attract your eyeballs with exciting things like Jim Kramer's pics because they want you to watch the ads and things. It is not good for your overall financial health and will not help you reach your goals.

Voices:

I'm gonna end up eating a steady diet of government cheese and living in a van down by the river.

Mostly Uncle Frank:

You're much better off reading books and listening to podcasts, particularly podcasts of people who are professionals. If you want to hear a podcast like that, listen to something called excess returns. You probably won't understand what they're talking about, but that is the level at which you need to be thinking about if you want to be making moves, if you will. And if you don't understand what those people are talking about and I guess that they bring on, then you shouldn't be trying to make moves. So I'm hoping that helps. I think if you are diligent about saving and investing, you are staying the course and not jumping in and out of things and are consistent about it, and pick up the other recommendations from catching up to fi, I think you will get there in a ten year time frame. At least that is what the catching up to fi crowd is all about. So please do check that out. Hopefully that helps. Thank you for being a donor to the Father McKenna Center, and thank you for your email.

Voices:

And now for something completely different.

Mostly Uncle Frank:

And something completely different is our weekly portfolio reviews of the eight sample portfolios you can find at www.riskpartyware.com on the portfolios page. Just looking at where the markets are year to date, starting with VOO, the SP 500, that's up 18.12% year to date. The Nasdaq 100, represented by QQQ, is up 22.8%. Small cap value, represented by the fund VIOV, is up 6.81% for the year. Gold continues to blow everything else out of the water.

Voices:

I love gold.

Mostly Uncle Frank:

Representative fund Jill DM is up 60.01% for the year so far.

Voices:

You're insane, gold member! And that's the way uh-huh uh-huh. I like it. Casey on the shunshine band.

Mostly Uncle Frank:

Long-term treasuries represented by the fund VGLT are up 5.73%. REITs represented by the fund REET are up 7.67%. Commodities represented by the fund PDBC are up 6.83%. Preferred shares represented by PFFV are up 2.02%. And managed futures are managing to do pretty well. Representative fund DBMF is up 11.72% for the year so far. Moving to these portfolios. We did do distributions last week, and that's covered on the website, so I'm not going to go through that. We'll just talk about where we are this week. First one's the all seasons. It is down 0.57% for the month of December, the week of December. It's up 13.64% year to date, and up 23.37% since inception in July 2020. We need these kind of bread and butter portfolios. First one's golden butterfly. This one's 40% in stocks divided into a total stock market fund and a small cap value fund. 40% in treasury bonds divided in long and short, and 20% in gold, GLDM. It's down 0.11% for the month of December. It's up 18.58% year to date and up 58.8% since inception in July 2020. Next one's Golden Ratio. The Golden Ratio seek. Next one's the Risk Parity Ultimate. It's kind of our kitchen sink here. I'm not going to go through all 12 of these funds. It is down 0.55% for the month of December. It's up 16.87% year to date and up 39.48% since inception in July 2020. Now moving to these experimental portfolios.

Voices:

Pony Stark was able to build this in a cave with a bunch of scraps.

Mostly Uncle Frank:

Don't try this at home, even though I know some of you do. These all involve leveraged funds that are much more volatile than the regular portfolios.

Voices:

You have a gambling problem.

Mostly Uncle Frank:

First one's the accelerated permanent portfolio. This one's 27.5% in a levered bond fund TMF, 25% in UPRO, a leverage stock fund, 22.5% in gold, and 25% in preferred shares fund PFFV. It's down 1.21% for the month of December. It's up 22.67% year to date and up 23.93% since inception in July 2020. Next one's the Aggressive 5050. This is the most levered and least diversified of these portfolios. It's one-third in a levered bond fund, TMF, one-third in a levered stock fund, UPRO and the remaining third in ballast in a preferred shares fund and an intermediate treasury bond fund. It's down 1.4% for the month of December so far. It's up 13.44% year to date and down 0.09% since inception in July 2020. Next one's a levered golden ratio. This one is 35% in a composite fund called NTSX, which is the S P 500 and Treasury bonds levered up 1.5 to 1%. It's got 15% in AVDV, which is an international small cap value fund, 20% in gold in GLDM, 10% in a managed futures fund, KMLM, 10% in TMF, a levered bond fund, and the remaining 10% divided into UDAO and UTSL, which are levered funds that follow the Dow and a Utilities Index. It's down 1.19% for the month of December so far. It's up 24.62% year to date and up 19.11% since inception in July 2021. Year younger than the first six. And finally, the OPTRA portfolio is the last one. One portfolio to rule them all.

Voices:

One ring to rule them all. One ring to find them. One ring to bring them all. And in the darkness, I'm them in the land of all where the shadows lie.

Mostly Uncle Frank:

This is a return stacked kind of portfolio. It's 16% in UPRO, a leverage stock fund, 24% in AVGV, which is a worldwide value-tilted fund, 24% in GOVZ, a Treasury Strips From the remaining 36% divided into gold and a managed futures fund. It is down 0.29% for the month of December so far. It's up 24.69% year to date, and up 28.33% since inception in July 2024. It's only about 18 months old.

Voices:

He kinda looks like a baby. Come here, I'm gonna eat you! Get in my belly!

Mostly Uncle Frank:

And that concludes our weekly portfolio reviews. So you can wake up now.

Voices:

Well, listen up, Sunny Jim! I it's a baby! Oh hi! Baby! The other other wait me! Baby! It's what's for dinner!

Mostly Uncle Frank:

But now I see our signal is beginning to fade. Happy birthday once again to our listener Mick.

Voices:

It's my birthday.

Mostly Uncle Frank:

As sponsored by his sister Cha Cha. And in the meantime, if you have comments or questions for me, please send them to Frank at RiskPartyRadio.com. That email is Frank at RiskPartyRadio.com. Or you can go to the website www.riskparty radio.com. Put your message into the contact form, and I'll get it that way. If you haven't had a chance to do it, please go to your favorite podcast provider and like, subscribe, and give some stars, a follow, a review. That would be great. Okay. Thank you once again for tuning in. This is Frank Vasquez with Risk Party Radio. Signing off.

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Frank Vasquez

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