Episode 433: More About Transitions, Leveraged ETFs And Other Gambling Problems And Wisdom From The Great Jim Rohn

Jun 26, 2025

The discussion tackles the intricacies of transitioning to a risk parity portfolio, emphasizing that many funds provide false diversification. Listeners learn about the challenges of leveraged ETFs and the importance of understanding what's in each investment. Insights from Jim Rohn underline the necessity of discipline in achieving success. Additionally, the importance of charitable support and responsible financial decisions is highlighted, alongside reflections on personal growth and taking charge of one’s financial future.

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ADVICE

Avoid False Diversification

Avoid holding multiple similar large-cap funds as it creates false diversification.
Check fund holdings to understand actual diversification before building your portfolio.

ADVICE

Transition Portfolio Comfortably

Transition to a risk parity portfolio either all at once or through dollar cost averaging.
Choose the method that feels psychologically comfortable, as long-term results tend to even out.

ADVICE

Manage Taxes During Transition

Consider your tax bracket before transitioning, selling tax lots that minimize your tax bill.
Spread conversion over a couple of years to mitigate tax impact if needed.

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In this episode we answer questions from Mason, Brian, and Anonymous. We discuss portfolio transitions from a highly overlapped portfolio and related consideration, treasury strips funds and leveraged ETFs (twice), and the power of advice from the great Jim Rohn. UNLIMITED POWER.

Just remember that "Affirmation without discipline is the beginning of delusion."

And we discuss our campaign for the Father McKenna Center and Quebecois updates to our website.

Links:

Father McKenna Center Donation Page: Donate - Father McKenna Center

The Source of the "We Don't Know" Clip: Jim Rohn Join the 3% Club and Walk away from the 97%

Breathless Unedited AI-Bot Summary:

Transforming your portfolio into a risk parity approach doesn't have to be complicated, but it does require both strategy and courage. This episode dives deep into listener questions about making that transition while navigating tax implications and psychological barriers.

When Mason asks about converting his advisor-built collection of funds into a risk parity portfolio, Frank reveals a crucial insight most investors miss: holding multiple similar funds creates "false diversification." Those four large-cap funds in your portfolio? They're basically the same investment with different names. True diversification comes from understanding what's inside each fund, not collecting different tickers.

For those curious about leveraged ETFs like UPRO, Brian's question leads to fascinating observations about why some leveraged products perform better than others. The conversation reveals why Treasury strips funds like GOVZ/ZROZ make reasonable substitutions for standard Treasury allocations, while leveraged gold ETFs might be problematic for long-term investors. Frank shares his personal experience reducing his own UPRO allocation and explains why experimentation with small portions of your portfolio is the wisest approach to newer investment strategies.

The philosophical foundation of the show emerges when a listener asks about the "Nobody Knows" sound clip. The attribution to motivational speaker Jim Rohn opens a window into the mindset that drives successful investing. Rohn's philosophy that "affirmation without discipline is the beginning of delusion" perfectly captures why just thinking about better investment outcomes isn't enough—you must take action to create them.

Ready to reshape your investment approach? This episode provides both the practical steps and the motivational spark to move forward confidently. As Rohn reminds us, "If you think investing is risky, wait till you get the tab for not investing."

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