The Nonsensical Ridings of a Lunatic Mind

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Mark: I have three questions about the risk-free rate of return. One is whether it's a useful concept when evaluating investment allocations in the context of a risk parity portfolio. Remember, thou art mortal. Two. More specifically, should our allocation to higher risk investments decrease as the risk- Free Rate rises and the excess return gap between them shrinks? And last off. All hail the commander of his Majesty's Roman legions, the brave and noble Marcus Vindictus. But we'll just chalk that up to another one of my quirks.

In this episode we answer emails from Thirsty Horse, Alexi (a/k/a "the Dude") and Mark. We discuss our charity, assorted Monte Carlo simulations on Portfolio Visualizer and data sources, rebalancing of leveraged portfolios and the choice of leverage (follow up on Episode 259), Flight of the Conchords, and the pitfalls of trying to use valuation metrics as crystal balls.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Become a Patron and Support our Charity: Risk Parity Radio | creating A Podcast | Patreon

Monte Carlo Analysis of basic Golden Ratio portfolio back to 1994: https://tinyurl.com/mswkra9c

Monte Carlo Analysis of Golden Ratio portfolio back to the 1970s: https://tinyurl.com/hzd6xftt

Portfolio Charts Retirement Spending Calculator: RETIREMENT SPENDING – Portfolio Charts

Michael Kitces Optimized Rebalancing Articles: Optimal Rebalancing – Time Horizons Vs Tolerance Bands (kitces.com)

Aswath Damodaran on Long View Podcast: Aswath Damodaran: A Valuation Expert’s Take on Inflation, Stock Buybacks, ESG, and More | Morningstar

Aswath Damodaran/Equity Risk Premium: Damodaran On-line Home Page (nyu.edu)

Errant 2013 Paper re 4% Rule: delivery.php (ssrn.com)

Kitces CAPE Ratio Article 2014: Shiller PE: Bad Market Timing, Good Retirement Planning (kitces.com)

Kitces CAPE Ratio Article 2016: Reducing Retirement Return Assumptions For High Valuation? (kitces.com)