Episode 418: Different Drummers, Even More GDE, Nice Blogging When You Can Get It, And Portfolio Reviews As Of April 25, 2025
Apr 27, 2025
This engaging discussion explores the emotional aspects of financial decisions, emphasizing how spending on relationships can enhance happiness in retirement. With laughter and listener anecdotes, the conversation includes a look at portfolio reviews and the complexities of finding uncorrelated assets. The hosts also delve into the evolving dynamics of communication in the digital age, reflecting on free speech and storytelling. Plus, get insights into the current market trends and the stability of diversified portfolios amid financial fluctuations.
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volunteer_activism ADVICE
Spend For Relationships' Benefit
When considering large retirement purchases, evaluate how they affect your relationships and happiness.
Prioritize spending on things that facilitate meaningful connections over simply saving money.
volunteer_activism ADVICE
72(t) Distribution Flexibility
Starting 72(t) distributions in your wife's IRAs vs. your own is not materially different despite a three-year longer payout.
Choose the approach that is most convenient without worrying too much about the time difference.
volunteer_activism ADVICE
Roll Coverdells Into 529 Plans
Roll over unused Coverdell accounts into 529 plans to benefit from more flexible rules and long-term use.
In this book, Nate Silver delves into the world of prediction, examining why many predictions fail and how some succeed. He uses case studies from diverse areas like baseball, elections, climate change, financial crashes, poker, and weather forecasting to illustrate statistical principles. Silver emphasizes the importance of probabilistic thinking, humility, and acknowledging uncertainty in making predictions. The book is praised for its accessible explanation of complex statistical concepts and its wide-ranging coverage of predictive methods.
The Malleus Maleficarum
The Hammer of the Witches
Heinrich Kramer
The Malleus Maleficarum, or "Hammer of Witches," is a treatise on witchcraft written by Heinrich Kramer and Jacob Sprenger. Published in 1486, it became a foundational text for witch hunts in early modern Europe. The book details the authors' beliefs about a global conspiracy of witches led by Satan, outlining methods for identifying and prosecuting them. It promoted the use of torture to extract confessions and advocated for the death penalty for those found guilty. The Malleus Maleficarum's influence contributed significantly to the widespread persecution of individuals accused of witchcraft. Its misogynistic views and promotion of violence continue to be studied and criticized.
Sapiens
A Brief History of Humankind
Yuval Noah Harari
This book surveys the history of humankind from the Stone Age to the 21st century, focusing on Homo sapiens. It divides human history into four major parts: the Cognitive Revolution, the Agricultural Revolution, the Unification of Humankind, and the Scientific Revolution. Harari argues that Homo sapiens dominate the world due to their unique ability to cooperate in large numbers through beliefs in imagined realities such as gods, nations, money, and human rights. The book also examines the impact of human activities on the global ecosystem and speculates on the future of humanity, including the potential for genetic engineering and non-organic life.
In this episode we answer emails from Jeff, Jenzo and Sam. We discuss spending money on relationships, a 72(t) situation, what to do with an unused Coverdell, GDE (again), a nice risk parity write-up and some random musings about the history of free speech and communications technologies.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Sam's Most Excellent Bill Of Rights Blog Post: Boxed In | SSiS
Breathless Unedited AI-Bot Summary:
When markets tumble and headlines scream doom, properly diversified portfolios reveal their quiet strength. This episode showcases exactly that phenomenon - while small cap value has plummeted 15.58% and the S&P 500 has shed 5.74% year-to-date, gold has soared a remarkable 25.87%, creating a balancing effect that keeps risk parity portfolios remarkably stable.
We dive into listener Jeff's retirement strategy, examining his use of 72T distributions and exploring whether his recent RV purchase makes financial sense. The answer turns out to be more about relationships than raw numbers. Research shows expenditures that facilitate meaningful connections tend to yield the greatest happiness returns - a powerful framework for evaluating major purchases in retirement.
The emerging world of composite leveraged ETFs takes center stage as we examine GDE, which combines S&P 500 exposure with gold allocation at 1.8x leverage. While innovative funds like these package risk parity principles into convenient solutions, they represent a tradeoff between simplicity and control. We explore whether these instruments belong in a sophisticated asset allocation strategy or if traditional single-asset funds still offer superior flexibility.
For investors fascinated by portfolio design theory, we tackle the question of just how many truly uncorrelated assets one needs. While hedge funds and endowments might pursue 15+ distinct asset classes, diminishing returns suggest a more practical approach for individual investors. The mathematical reality shows the incremental benefit of adding that 11th or 12th asset pales in comparison to the impact of moving from one or two assets to five diverse investments.
Our weekly portfolio review reveals the practical power of these principles. Despite market turmoil, most of our sample portfolios remain nearly flat or slightly positive for the year - precisely the stability risk parity promises. Whether you're just beginning your investment journey or fine-tuning an established strategy, this episode offers both theoretical frameworks and practical evidence for building resilient portfolios in uncertain times.
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