Episode 399: A Good Deed Shining In A Weary World, Thoughts On Hoarding, Preferred Shares, Gold And Portfolio Reviews As Of January 31, 2025
Feb 2, 2025
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Celebrate Groundhog Day with insightful discussions on charitable giving and the innovative McKenna Man portfolio. Explore the balance between preferred shares and REITs, and dive into the quirky world of financial hoarding. Delve into the thought-provoking relationship between money and personal satisfaction, highlighting the importance of experiences. Plus, enjoy entertaining portfolio reviews and lighthearted analyses of market trends, including the intriguing concepts of gold investments and a unique Bitcoin-gold ETF strategy.
43:29
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Quick takeaways
Ron proposes a new equity-based portfolio to support the Father McKenna Center, highlighting the intersection of charitable giving and investment strategy.
The discussion critiques clients' hoarding behavior, emphasizing that wealth should enhance life quality through experiences and charitable donations rather than mere accumulation.
Deep dives
Exploring Portfolio Allocations and Charity Support
The episode features a discussion about portfolio allocations, highlighting a listener, Ron, who proposes creating a new equity-based portfolio to support the Father McKenna Center. His suggested allocations include 70% in total market, 20% in small cap, and 10% in international equities, with an annual withdrawal rate of 8%. The host expresses excitement about this idea, noting how it reinforces their commitment to charitable actions while also providing an experimental approach to portfolio management. This engagement with the audience underscores the community aspect of the podcast, where listeners are encouraged to think critically about their investments and their impact.
Questioning Investment Strategies
A listener, Jay, contemplates adjustments to his retirement portfolio, specifically considering replacing a REIT investment with a preferred stock fund for its higher yield and lower volatility. The host provides guidance on the potential trade-offs, explaining how preferred shares generally offer lower overall returns compared to REITs but with reduced volatility. Additionally, he addresses concerns about gold investments, emphasizing its role as a diversifier and suggesting that investors should maintain a consistent allocation rather than making impulsive changes based on market fluctuations. This dialogue illustrates the importance of strategic planning in investments as transitional phases of life like retirement approach.
Addressing Client Behavior and Spending Mindset
The host critiques common behaviors among wealthy clients, particularly the tendency to hoard money rather than spend it to enhance their quality of life. He references conversations among financial advisors who often express frustration over clients' reluctance to spend their wealth, pointing out that this behavior is rooted in fear or identity issues. The episode stresses that living a fulfilling life involves spending on relationships, experiences, and charitable causes, rather than accumulating wealth for its own sake. By challenging these hoarding tendencies, the discussion seeks to empower listeners to reassess their financial philosophies and the role money plays in achieving personal satisfaction.
Reflecting on Portfolio Performance and Adjustments
The host conducts a review of various sample portfolios, noting their performance over the past month, with a particular focus on the strategies employed. Each portfolio shows fluctuations in returns, revealing patterns that can guide investors in making informed decisions about rebalancing their investments. For instance, the All Seasons portfolio has performed steadily, proving the effectiveness of its conservative allocation, while more aggressive portfolios reflect the risk-reward dynamic inherent in leverage. This segment serves to further educate listeners on portfolio management principles and the impact of market conditions on investment strategy, underlining the importance of ongoing evaluation.
In this episode, we celebrate Ground Hog Day and answer emails from Ron, Jay and Pete. We discuss the value of giving and the new McKenna Man portfolio that Ron is constructing, preferred shares vs. REITs, holding gold, what financial advisors really think about their hoarding clients but can't say in front of them but I will, and Pete's risk parity style portfolio and his 6-year old's potato chip gambling problem.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Pete's Fund and Correlation Analysis: https://testfol.io/analysis?s=4Qh1xI3JKMl
Amusing Unedited AI-Bot Summary:
Unlock the secrets of alternative investments and discover a fresh perspective on asset allocation with Risk Parity Radio. Ever wondered how creative financial strategies can transform charitable giving? Listen in as we highlight Ron, a dedicated listener, who proposes an innovative approach to support the Father McKenna Center in Washington, D.C. We'll dissect his all-equity portfolio idea, and explore an alternative inspired by the Rick Ferri Core 4 portfolio, tailored for an 8% withdrawal rate. This episode promises to inspire with its blend of community-focused financial creativity and solid investment insights.
Curiosity piqued? Learn why PFFV trumps PFF in cost-effectiveness and tax benefits, especially for those in higher tax brackets. The episode tackles listener questions head-on, like the VNQ versus PFF debate, and shines a light on the essential role of gold in diversification. A personal tale unfolds as I recount my unexpected removal from Andy Pankow's Facebook group, sparking a discussion on the dynamics of online financial communities. This engaging narrative provides a nuanced view of maintaining a steady allocation amidst the ebb and flow of digital interactions.
Explore the lighter side of finance as we analyze the performance of various portfolios in a quirky review of January's market highlights. With imaginative requests, like a breakfast order for the "bacon man," and the intriguing concept of combining Bitcoin and gold in an ETF, this episode offers both entertainment and education. From the conservative All Seasons to the experimental Golden Ratio, each portfolio reveals unique allocations and outcomes. Join us on this enlightening journey through investment strategies, and uncover the unexpected joys of charitable giving through creative financial planning.