Risk Parity Radio

Explore the power of generosity as the hosts celebrate an astounding $22,000 raised for the Father McKenna Center, including a single $15,000 donation. This heartfelt act underscores the community's commitment to aiding the homeless. Delve into savvy investment strategies for college savings and tax-efficient portfolio management, especially for those nearing retirement. The episode includes insightful portfolio reviews, focusing on rebalancing and strategic asset allocation. Tune in for tips on engaging with charitable causes while enhancing your financial game.

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.