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.
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Paula Pant's Risk Parity Radio Blueprint: Frank Vasquez Risk Parity Portfolio Giveaway.docx
Claudia Moise Paper: Flights to Safety, Volatility Risk, and Monetary Policy by Claudia E. Moise :: SSRN
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FRDM Fund: FRDM – Freedom 100 Emerging Markets ETF – ETF Stock Quote | Morningstar
Breathless 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 recommendat
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