T-Bill Ladders, ETFs, and Practicality

Cullen describes T-bill ladders, ETF alternatives, and trade-offs of TreasuryDirect's clunkiness.

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Episode notes

#684: Most people search for the perfect portfolio — the one allocation that works in every market, at every age, for every goal. This interview starts by explaining why that portfolio does not exist.

We talk with Cullen Roche, founder and chief investment officer of Discipline Funds, about why copying someone else’s portfolio can backfire, and why portfolio design works better when it starts with your own constraints instead of rules of thumb.

We walk through real portfolio models. The conversation begins with the classic 60-40 portfolio. You hear where it came from, how it held up during the Great Depression, and why it became so widely adopted. We also talk about its trade-offs — why it feels boring in strong markets and comforting in crashes, and how that emotional balance plays a role in investor behavior.

Next, we shift to a Buffett-style portfolio. You hear why the takeaway is less about stock picking and more about structure. The discussion covers why Buffett keeps a small allocation to cash-like assets, how that “dry powder” functions during downturns, and why psychological stability matters as much as returns.

The episode then turns to cash management. We talk about high-yield savings accounts, money market funds and Treasury bills. You hear how many cash products are built on T-bills, how banks capture part of the yield, and when managing cash directly may make sense. The concept of “T-bill and chill” comes up — along with when the extra effort may or may not be worth it.

Finally, the conversation zooms out to time horizons. We discuss why income from a job functions like a bond allocation, how that changes risk capacity when you are younger, and why the early years of retirement carry the most danger. The episode closes by explaining sequence-of-returns risk and why portfolios need to work not just on paper, but in moments of fear.

Resource:

Cullin's website and newsletter: https://disciplinefunds.com

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

(00:00) Intro

(02:00) No perfect portfolio

(03:34) 60-40 portfolio starts

(06:38) 60-40 keeps calm

(08:00) Buffett portfolio basics

(12:11) Stocks vs cash fear

(13:34) T-Bill and Chill

(18:22) TreasuryDirect is clunky

(23:42) Income as bond proxy

(25:33) Bond tent buffer

(29:12) Sequence risk explained

(31:42) Early retirement mindset