In this shocking, season-ending episode we answer an email from another generous and Nameless listener regarding a levered portfolio for Nameless, Jr., their omnipotent baby in waiting. We also have fun with Fibonacci numbers.
And THEN we do our annual rebalancings of the first four sample portfolios you can find at Portfolios | Risk Parity Radio. And we also do our weekly portfolio reviews.
Additional Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Bigger Pockets Money Podcast #1: The Secret to a 5% Safe Withdrawal Rate | Frank Vasquez
Bigger Pockets Money Podcast #2: We Built a 5% SWR Retirement Portfolio Using Fidelity in 48 Minutes (Golden Ratio Portfolio)
All Seasons Portfolio Write-Up: All Seasons Portfolio – Portfolio Charts
Golden Butterfly Portfolio Write-Up: Golden Butterfly Portfolio – Portfolio Charts
Golden Ratio Portfolio Write-Up: Golden Ratio Portfolio – Portfolio Charts
Breathless Unedited AI-Bot Summary:
A foolish consistency may be the hobgoblin of little minds, but financial consistency through strategic portfolio rebalancing is the cornerstone of successful long-term investing. Welcome to Episode 439 of Risk Parity Radio, where we're tackling our annual portfolio rebalancing ritual with a healthy blend of investment wisdom and pop culture quips.
After sharing highlights from recent appearances on the BiggerPockets Money podcast where I guided host Mindy through constructing a risk parity portfolio using the golden ratio, we dive into an extraordinary listener story. TheNamelessOne made a mathematically beautiful donation of $5,321.10 to the Father McKenna Center—a reverse Fibonacci sequence that brilliantly connects to our golden ratio portfolio construction methods.
The market snapshot reveals gold shining brightest in 2023, up over 27% year-to-date, significantly outperforming both the S&P 500 and NASDAQ 100. This performance pattern creates the perfect scenario for demonstrating the discipline of rebalancing—systematically selling high (primarily gold across all portfolios) and buying low (particularly Treasury bonds and small cap value).
Each of our four sample portfolios gets the rebalancing treatment, with the Golden Butterfly standing tall at 43.16% return since inception while maintaining sleep-at-night stability. For those fascinated by the mathematical underpinnings, I explore how the Fibonacci sequence approaches the golden ratio (approximately 1.618), creating natural proportions that translate beautifully to portfolio construction.
Beyond the standard portfolios, we venture into experimental leveraged territory—not recommended for beginners but fascinating for understanding how different approaches perform through market cycles. The stark contrast between our worst performer (Aggressive 50-50, down 11.37% since inception) and our best (Golden Butterfly) offers powerful lessons in risk management.
Whether you're a math enthusiast, movie quote afficionado, or serious DIY investor, this episode delivers practical rebalancing strategies while maintaining that distinctive Risk Parity Radio blend of education and entertainment. Your portfolio might march to the beat of a different drummer, but that's precisely what makes risk parity so fascinating.
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