Risk Parity Radio

We analyze a portfolio recently proposed in a MarketWatch article that is intended to replace the standard 60/40 stock/bond retirement portfolio.Links:MarketWatch article:  https://www.marketwatch.com/articles/a-60-40-stocks-bond-strategy-no-longer-works-heres-what-to-do-instead-51601653163?mod=mw_latestnewsPortfolio Visualizer Comparison Analysis:  Backtest Portfolio Asset Allocation (portfoliovisualizer.com)Portfolio Visualizer Asset Correlation Analysis of the MarketWatch portfolio:   Asset Correlations (portfoliovisualizer.com)Support the show

This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfoliosAnd here is a nice picture of Walden Pond on October 11, 2020:https://photos.app.goo.gl/sksbGcENz62pb8PVASupport the show

In this episode, which is Part Two of Two, we conclude the analysis of REITS as an investment that we began in Episode 19, using David Stein's 10 Questions to Master Investing, which are:1.  What is it?2.  Is it an investment, a speculation, or a gamble?3.  What is the upside?4.  What is the downside?5.  Who is on the other side of the trade?6.  What is the investment vehicle?7.  What does it take to be successful?8.  Who is getting a cut?9.  How does it impact your portfolio?10.  Should you invest?We cover the questions six through ten in this episode.Helpful links:Backtest of REITs versus the stock market comparison:https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=100&asset2=REIT&allocation2_2=100Composition of the ETF VNQ:  https://www.marketwatch.com/investing/fund/vnq/holdings?mod=mw_quote_tabCorrelation Matrix of the REITs and funds mentioned:  https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VTI%2C+VNQ%2C+VNQI%2C+REET%2C+BXP%2C+PLD%2C+O%2C+SPG%2C+AVB%2C+WY%2C+VTR%2C+WELL%2C+PSA%2C+AMT%2C+CCI%2C+DLR%2C+WPC%2C+VNO%2C+LAMR%2C+GLPI%2C+LAND%2C+IRM&timePeriod=2&tradingDays=60&months=36Support the show

We begin with a monthly rant about the misguided idea of picking funds that have "great fund managers" and a few other topics.Relevant links:Recent interview of Burton Malkiel:  https://animalspiritspod.libsyn.com/a-random-talk-with-burton-malkielRisk Parity Radio Bond Episodes:https://www.riskparityradio.com/podcast/episode/4965a5d2/episode-14-which-bonds-are-right-for-your-risk-parity-style-portfolio-a-comprehensive-analysis-part-ihttps://www.riskparityradio.com/podcast/episode/4c25df5c/episode-16-which-bonds-are-right-for-your-risk-parity-style-portfolio-a-comprehensive-analysis-part-2Following the rant is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfoliosWe also compare the Accelerated Permanent Portfolio with two Dave Ramsey-Style Portfolios using the tools at Portfolio Visualizer.  Relevant links:White Coat Investor article about a Ramsey-style portfolio:  https://www.whitecoatinvestor.com/dave-ramsey-asset-allocation/Portfolio Visualizer analysis:https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=7.5&relativeDeviation=0.0&showYield=true&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=PFF&allocation1_1=25&symbol2=TMF&allocation2_1=27.5&symbol3=GLD&allocation3_1=22.5&symbol4=UPRO&allocation4_1=25&symbol5=VIVIX&allocation5_2=25&symbol6=VMGRX&allocation6_2=25&allocation6_3=25&symbol7=VSCIX&allocation7_2=25&symbol8=VGTSX&allocation8_2=25&symbol9=VGIAX&allocation9_3=25&symbol10=VSGIX&allocation10_3=25&symbol11=VWIGX&allocation11_3=25Support the show

In this episode, which is Part One of Two, we begin our analysis of REITS as an investment using David Stein's 10 Questions to Master Investing, which are:1.  What is it?2.  Is it an investment, a speculation, or a gamble?3.  What is the upside?4.  What is the downside?5.  Who is on the other side of the trade?6.  What is the investment vehicle?7.  What does it take to be successful?8.  Who is getting a cut?9.  How does it impact your portfolio?10.  Should you invest?We cover the first five questions in this episode.Helpful links:Investopedia Article on REITs:  https://www.investopedia.com/terms/r/reit.aspDirectory of REITs by sector:  https://www.reit.com/investing/reit-directory?title=nly&field_rtc_listing_status_tid_selective[]=524&field_address_country_selective[]=US&sort_by=titleThe Section 199A Tax Benefits of REITs:  https://www.kitces.com/blog/reit-real-estate-investments-section-199a-qbi-deduction/#:~:text=Because%20under%20IRC%20Section%20199A,Qualified%20Business%20Income%20or%20QBI)Correlation Matrix of Most of the REITs and funds mentioned:  https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VTI%2C+VNQ%2C+VNQI%2C+REET%2C+BXP%2C+PLD%2C+O%2C+SPG%2C+AVB%2C+WY%2C+VTR%2C+WELL%2C+PSA%2C+AMT%2C+CCI%2C+DLR%2C+WPC%2C+VNO%2C+LAMR%2C+GLPI%2C+LAND%2C+IRM&timePeriod=2&tradingDays=60&months=36Support the show

This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfoliosWe also compare the Risk Parity Ultimate Portfolio with a Boglehead's Three-Fund Portfolio using the tools at Portfolio Visualizer.  Here is a link to that analysis:https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=2.5&relativeDeviation=0.0&showYield=true&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&allocation1_1=0&allocation1_3=0&symbol2=VUG&allocation2_1=12.5&allocation2_3=0&symbol3=VIOV&allocation3_1=12.5&allocation3_3=0&symbol4=VOO&allocation4_1=12.5&allocation4_3=0&symbol5=EDV&allocation5_1=5&symbol6=TLT&allocation6_1=15&allocation6_3=0&symbol7=GLD&allocation7_1=10&symbol8=VNQ&allocation8_1=10&allocation8_3=0&symbol9=VNQI&allocation9_1=0&allocation9_3=0&symbol10=VIXY&allocation10_1=2.5&symbol11=PFF&allocation11_1=12.5&symbol12=UPRO&allocation12_1=2.5&allocation13_1=0&symbol14=TMF&allocation14_1=5&symbol15=VTI&allocation15_2=40&symbol16=BND&allocation16_2=40&symbol17=VXUS&allocation17_2=20The Risk Parity Ultimate is a conservative portfolio that is designed for medium and long-term needs.  It is comprised of 12 different funds in six different asset classes:  40% stock funds (split into 12.5% VUG, 12.5% VIOV, 6.25% USMV, 6.25% SPLV and 2.5% UPRO), 25% long-term treasury bond funds (split into 15% TLT, 5% EDV and 5% TMF), 12.5% preferred stock funds (PFF), 10% gold (GLDM), 10% REITs (REET) and 2.5% in a stock market volatility tracking fund (VXX). Here is the link to Episode 9, where we discuss investing in preferred stock shares and the PFF fund in particular:https://www.riskparityradio.com/podcast/episode/48e031bb/episode-9-how-to-choose-investments-using-a-process-and-an-application-to-a-preferred-stock-fundSupport the show

This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfoliosWe also compare the Golden Butterfly Portfolio with a Boglehead's Three-Fund Portfolio using the tools at Portfolio Visualizer.  Here is a link to that analysis:https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=Gold&allocation1_1=16&asset2=LargeCapGrowth&allocation2_1=14&asset3=SmallCapValue&allocation3_1=14&asset4=LargeCapBlend&asset5=LongTreasury&allocation5_1=26&asset6=TotalBond&asset7=TreasuryBills&allocation7_1=6&asset8=TotalStockMarket&allocation8_2=40&asset9=Commodities&asset10=TotalBond&allocation10_2=40&asset11=ShortTreasury&asset12=IntlStockMarket&allocation12_1=14&allocation12_2=20&asset13=IntermediateTreasury&asset14=REIT&allocation14_1=10The Golden Ratio is a conservative portfolio that is designed for medium to long-term needs.  It is based on the mathematical golden ratio known to the ancients, which is approximately 1.618 and is represented by the Greek letter phi.  It is comprised of five asset classes in seven funds that are weighted by successive applications of the golden ratio:  42% stocks (split into 14% large cap growth (VUG), 14% small cap value (VIOV) and 14% low volatility (USMV)), 26% long-term treasury bonds (TLT), 16% gold (GLDM), 10% REITs (REET) and 6% money market (SPAXX),  Since 1970, it has a compounded annual growth rate (after inflation) of 7.0%, and an expected permanent safe withdrawal rate of 5.0%.Support the show

In this episode, which is Part Two of Two, we continue our discussion from Episode 14 (Part 1), and conclude our analysis bonds as an investment using David Stein's 10 Questions to Master Investing, which are:1.  What is it?2.  Is it an investment, a speculation, or a gamble?3.  What is the upside?4.  What is the downside?5.  Who is on the other side of the trade?6.  What is the investment vehicle?7.  What does it take to be successful?8.  Who is getting a cut?9.  How does it impact your portfolio?10.  Should you invest?We cover the last five questions in this episode.Here are the links referenced in the episodeThe correlation matrix of bond funds:  https://tinyurl.com/y4x3jynuDan Huffman's Ultimate KI$$ portfolio with treasury bonds:  https://keepinvestingsimplestupid.com/the-ultimate-ki-portfolio-with-bonds/?fbclid=IwAR3UAmCo9zLVFc5LuIjQd3pjX9MtsMbVGlu9OiNQbK7jFS8le7GzXOlLyTMThe Swanson portfolio:  https://keepinvestingsimplestupid.com/the-swanson-portfolio/?fbclid=IwAR17CTGmCrrxsMfyI3mt0wuFBmMJunpiivyBlom62bO2_9C0m5O61aL8C8IThe prospectus for TLT:  https://www.ishares.com/us/library/stream-document?stream=reg&product=ISHT20&shareClass=NA&documentId=925887%7E925803%7E926213%7E925554%7E925655&iframeUrlOverride=%2Fus%2Fliterature%2Fprospectus%2Fp-ishares-20-plus-year-treasury-bond-etf-2-28.pdfThe fact sheet for TLT:  https://www.ishares.com/us/literature/fact-sheet/tlt-ishares-20-year-treasury-bond-etf-fund-fact-sheet-en-us.pdfA chocolate vinegar cake recipe:  https://www.bonappetit.com/test-kitchen/inside-our-kitchen/article/chocolate-vinegar-cake-recipeRisk parity sample portfolios page:  https://www.riskparityradio.com/portfoliosSupport the show

This is our weekly portfolio review of the portfolios you can find at https://www.riskparityradio.com/portfoliosWe also compare the Golden Butterfly Portfolio with a Boglehead's Three-Fund Portfolio using the tools at Portfolio Visualizer.  Here is a link to that analysis:  https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=Gold&allocation1_1=20&asset2=LargeCapGrowth&asset3=SmallCapValue&allocation3_1=20&asset4=LargeCapBlend&asset5=LongTreasury&allocation5_1=20&asset6=TotalBond&asset7=TreasuryBills&asset8=TotalStockMarket&allocation8_1=20&allocation8_2=40&asset9=Commodities&asset10=TotalBond&allocation10_2=40&asset11=ShortTreasury&allocation11_1=20&asset12=IntlStockMarket&allocation12_2=20&asset13=IntermediateTreasuryFor reference, the Golden Butterfly Portfolio is the brainchild of Tyler, the founder and operator of the website www.portfoliocharts.com.  It is a conservative portfolio and is comprised of four asset classes in five funds that are equally weighted:  20% total U.S. stock market (VTI), 20% small cap value stocks (VIOV), 20% long-term treasury bonds (TLT), 20% short term treasury bonds (SHY) and 20% gold (GLDM).  Since 1970, it has a compounded annual growth rate (after inflation) of 6.4%, and an expected permanent safe withdrawal rate of 5.3%.Support the show

In this episode, which is Part One of Two, we begin our analysis of bonds as an investment using David Stein's 10 Questions to Master Investing, which are:1.  What is it?2.  Is it an investment, a speculation, or a gamble?3.  What is the upside?4.  What is the downside?5.  Who is on the other side of the trade?6.  What is the investment vehicle?7.  What does it take to be successful?8.  Who is getting a cut?9.  How does it impact your portfolio?10.  Should you invest?We cover the first five questions in this episode.Here is the link to the correlation matrix referenced in the episode:https://tinyurl.com/y4x3jynuRisk parity sample portfolios page:  https://www.riskparityradio.com/portfoliosSupport the show