Risk Parity Radio

In this episode we answer emails from I Have No Name, Deep and Joel.  We discuss the extraordinary generosity of our listeners and how it uplifts the workers in the FMC trenches, rebalancing in accumulation, tax considerations for an intermediate term portfolio, saving for college, and what to do with new money just a few years from retirement.And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.To donate to the Top of the T-Shirt campaign and double your fun, please visit the Father McKenna Center donation page and note "Risk Parity Radio Match" when making your contribution.Additional Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterFMC Instagram Page:  The Father McKenna Center (@thefathermckennacenter) • Instagram photos and videosFMC Facebook Page:  The Father McKenna Center | Washington D.C. DC | FacebookBreathless Unedited AI-Bot Summary:Charitable giving and strategic investing merge powerfully in this week's episode as we celebrate remarkable fundraising success and tackle sophisticated portfolio questions. What began as a modest matching campaign for the Father McKenna Center has exploded into something extraordinary—over $22,000 raised in just two weeks, including a single $15,000 anonymous donation that left me nearly speechless. The genuine impact of this community's generosity on homeless and hungry individuals in DC cannot be overstated.Diving into listener questions, we explore the nuances of portfolio construction across different life stages. For physicians in their accumulation phase, we distinguish between large cap growth and large cap value when paired with small cap value, revealing how Shannon's Demon effect operates during dollar-cost averaging. The discussion expands into tax-efficient risk parity strategies for high-income earners, offering practical guidance on minimizing taxable events while maximizing returns.Parents of newborns will appreciate our deep dive into college savings strategies, including the optimal 50-50 large cap growth and small cap value approach that investment educator Paul Merriman and I both recommend. I share tactical insights on 529 plans versus brokerage accounts, suggesting that funding 529 plans earlier in a child's life maximizes tax advantages before transitioning to additional savings vehicles.For those approaching retirement, we address the critical transition from accumulation to decumulation portfolios, emphasizing that your financial independence number—not market predictions—should drive allocation decisions. The episode concludes with our weekly review of eight sample portfolios, highlighting performance across conservative, balanced, and experimental approaches.Follow the Father McKenna Center on social media to witness the direct impact of your donations, and consider contributing to our ongoing "Top of the T-shirt" campaign through July. Your support transforms lives while you transform your investment approach.Support the show

In this episode we answer emails from Brent, Peter and Cy.  We discuss our Father McKenna Center Top-of-the-T-Shirt Matching Campaign (again), Peter's risk-parity style portfolio in retirement and what to do with new cash coming in, and Cy's small cap value direct indexing experiment.If you'd like to support the Father McKenna Center and get your questions answered on the show, please donate through the link in the show notes. Every dollar will be doubled through our matching campaign.Links:Father McKenna Center Donation Page:  Donate - Father McKenna CenterStacking Benjamins YouTube Live Stream Roundtable:  Decumulational Strategies: The Special Retirement Spend Down Strategy RoundtableHendrik Bessembinder on Rational Reminder Podcast:  Episode 346 - Hendrik Bessembinder: Why It's So Hard to Beat the Market — Rational ReminderBreathless AI-Bot Summary:Marching to the beat of your own financial drummer doesn't mean ignoring proven investment principles. In this insight-packed episode, I dive into personalized portfolio construction for retirement success while answering thoughtful questions from listeners who've supported our Father McKenna Center charity campaign.When constructing retirement portfolios, certain parameters consistently enable higher safe withdrawal rates: 40-70% in equities, 15-30% in treasury bonds, 10-25% in alternatives, and less than 10% in cash. We explore how one listener's portfolio elegantly captures these parameters with a 60/40 split tilted toward value and supplemented with gold, managed futures, and preferred shares.The eternal question of adding international exposure resurfaces as we examine AVDV (international small-cap value) and IDMO (international momentum). While these funds have performed admirably this year—partly due to dollar weakness—I caution against chasing recent performance without long-term commitment. The property and casualty insurance sector (KBWP) similarly warrants consideration for its diversification benefits, having weathered the 2022 downturn admirably.Perhaps most fascinating is our deep dive into direct indexing small-cap value stocks. One listener's meticulous experiment—complete with profitability screens, debt filters, and rebalancing protocols—illustrates both the potential and the complexity of this approach. I contrast this with Hendrik Bessembinder's research showing that roughly 4% of stocks drive the vast majority of market returns, underscoring why picking individual small-caps presents particular challenges.For those approaching or in retirement, I offer a counterintuitive perspective on lump-sum cash inflows: sometimes the most efficient approach isn't investing at all, but rather using those funds to cover expenses for several years, potentially reducing tax liability without significantly impacting long-term portfolio growth.Whether you're crafting your retirement strategy, exploring direct indexing, or optimizing your withdrawal approach, this episode delivers practical insights for aligning your investments with your unique financial journey.Support the show

Listeners shower the hosts with gratitude, sparking a celebration of community spirit. They explore using risk parity portfolios for smart intermediate-term savings, with humorous insights on tax efficiency. The conversation dives into navigating taxable investments, and retirement finance takes center stage as they discuss decumulation strategies. The hosts also analyze portfolio performances as of May 2025, sharing metrics from major funds and inviting audience feedback on strategies. It's a blend of finance, generosity, and camaraderie!

Listeners dive into a community-focused discussion, tackling audience emails and fundraising for the Father McKenna Center. The intriguing BOXX ETF is analyzed for its tax advantages, challenging traditional financial wisdom. The conversation shifts to the evolving landscape of hedge fund taxes and the benefits of direct indexing for high-income earners. The focus then turns to self-managed investing, urging listeners to seek purpose beyond mere wealth accumulation, all while celebrating inspiring contributions to society through personal agency and community impact.

Listeners dive into creative portfolio experiments, like the quirky 'Berry Pie' strategy, offering fresh perspectives on investment efficiency. The discussion humorously challenges traditional value and size factors, bringing in Shannon's Demon to spice things up. Charity initiatives are also highlighted, promoting support for the Father McKenna Center. Weekly and monthly portfolio reviews reveal insights on shifting to ETFs and the surprisingly strong performance of gold and other assets, all wrapped in a light, engaging tone.

Explore the nuanced world of margin accounts and the risks involved in leveraging investments. Discover insights about the SCHD fund as a staple in value investing and its implications for safe withdrawal rates. Dive into the obsession with international funds and learn about diversification strategies. With a touch of humor and engaging anecdotes, the discussion sheds light on common misconceptions and offers valuable investment wisdom for both novice and seasoned investors.

This installment dives into Interactive Brokers' margin accounts, shedding light on how to use portfolio assets as collateral and avoiding nasty margin calls. It also tackles the pesky tax implications of gold ETFs, specifically those pesky small distributions on 1099 forms. The discussion transitions into an insightful analysis of BTAL versus treasury bonds, exploring how differing asset classes interact. Listeners are treated to thoughtful weekly and monthly portfolio reviews, enhancing their personal finance journey.

Discover the ins and outs of the new ALLW ETF, a collaborative effort meant to bring stability through risk parity. Analyze its complexities and high fees against traditional portfolio strategies. Delve into the confusing landscape of Social Security claiming with practical insights on personal longevity and family histories. Uncover the truth behind dividend investing—most returns stem from reinvested dividends, not just payouts. This episode demystifies common financial misconceptions and helps refine your investment approach.

Listeners are in for a treat as the hosts delve into comparing two commodity funds, PDBC and BCI, revealing hidden differences that can impact returns. They also explore the benefits of small cap value stocks, emphasizing their role in diversifying portfolios, especially during downturns. Fidelity's new gold lending program sparks lively discussions about risks versus rewards, all while the team maintains a humorous tone. Plus, there’s a nod to charitable giving efforts, keeping the conversation engaging and socially conscious.

This discussion dives into the nuances of portfolio management, evaluating assets like managed futures while questioning the merits of covered call funds. Anecdotes from a listener in Québec add humor while illustrating investment strategies with Canadian and U.S. ETFs. Rebalancing timelines and methods are explored, emphasizing sustainability and simplicity in portfolio management. The host also offers guidance on navigating the podcast's episode archive, keeping the conversation lively and accessible.