Episode 410: PHYS For Gold, AVGE For Stocks, Tail Risk Hedging And Portfolio Reviews As Of March 28, 2025

In this episode we answer emails from Deeps, David, James, Steven and Jordan.  We discuss the PHYS vs other gold ETFs, the podcast feed link, using AVGE in a risk parity style portfolio, why we do this and tail risk hedging.  

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

Additional links:

PHYS vs. GLDM:  testfol.io/analysis?s=1lK9VB9xqaM

RPR Main Feed Link (all the podcasts -- open in browser):  Risk Parity Radio RSS Feed

AVGE Composition And Other Info:  AVGE – Portfolio – Avantis All Equity Markets ETF | Morningstar

Portfolio Matrix:  Portfolio Matrix – Portfolio Charts

CAOS Fund:  CAOS – Alpha Architect Tail Risk ETF – ETF Stock Quote | Morningstar

Amusing Unedited AI-Bot Summary:  

Gold continues to shine while stocks falter in 2024's challenging market environment. This episode demonstrates the power of diversification during turbulent times, with precious metals up over 17% year-to-date as the S&P 500 struggles down nearly 5%. We explore why truly diversified portfolios are proving their worth yet again.

Responding to a listener question about gold ETFs, I break down why PHYS's potential tax advantages rarely outweigh its higher expense ratio compared to traditional options like GLD. The physical gold redemption feature sounds appealing but offers little practical benefit for most investors. The entire physical gold storage industry largely profits from fear rather than delivering substantive advantages to everyday investors.

The highlight of this episode comes from a fascinating listener discovery – combining the comprehensive Avantis AVGE fund with treasuries and gold creates a remarkably simple yet effective portfolio. This approach addresses a critical concern: ensuring surviving spouses can easily manage investments without sacrificing performance. Our analysis using Portfolio Charts shows this simplified approach delivers comparable results to more complex allocations while dramatically reducing management complexity.

We also tackle tail risk hedging strategies, explaining why these insurance-like approaches rarely justify their ongoing costs, especially for investors in the accumulation phase. True diversification provides more reliable protection than specialized instruments designed to profit from market crashes.

The portfolio performance review tells the real story – while traditional stock allocations struggle, our diversified sample portfolios are mostly holding steady or positive for the year. Historical patterns suggest diversified portfolios experience down years only about 20% of the time versus 30% for traditional approaches – a meaningful difference that compounds over retirement timeframes.

Have questions about navigating today's challenging markets? Send them to frank@riskparityradio.com – I'd love to answer them in an upcoming episode!

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