In this episode we answer emails from Dave, Jeff and Peter. We discuss a new risk parity ETF, ALLW, a social security claiming question and considerations, and how a listener has been misled regarding so-called dividend investing by misinterpreting a misleading source.

Breathless Unedited AI-Bot summary

Financial misconceptions can cost you dearly. This eye-opening episode tackles three critical investment topics that challenge conventional wisdom and may transform how you approach your portfolio.

When State Street and Bridgewater Associates launched their All Weather ETF (ALLW), it promised the stability of risk parity with the pedigree of Ray Dalio himself. We dissect this new offering—examining its 175% leverage, complex asset allocation, and 0.85% expense ratio—to determine whether it delivers on its promises or falls into the same traps as similar products like RPAR and UPAR. For investors approaching retirement, understanding these nuances could be the difference between confidence and confusion in the decumulation phase.

Delaying Social Security benefits remains one of retirement planning's most debated decisions. We cut through the noise of oversimplified break-even calculators to explore what truly matters: appropriate risk-free rate calculations, the value of guaranteed income streams, and perhaps most importantly, how your family's longevity history should influence your claiming strategy. For married couples, the analysis becomes even more critical as spousal benefits create powerful optimization opportunities that generic calculators often miss.

The episode concludes by dispelling one of investing's most persistent myths: the magical power of dividends. When Hartford Research noted that "85% of the S&P 500's return came from reinvested dividends and compounding," many investors misinterpreted this to mean dividends themselves were responsible for these returns. We reveal how this fundamental misunderstanding leads investors astray, explain why dividend payments offer no advantage in today's zero-commission environment, and demonstrate why creating your own "dividend" through strategic selling provides superior tax control.

Whether you're building wealth or planning your withdrawal strategy, these insights will help you see beyond marketing claims to make decisions based on financial reality rather than comforting illusions. Listen now to align your investment approach with actual market mechanics instead of persistent financial folklore.

Have a question about risk parity investing or portfolio construction? Email frank@riskparityradio.com or visit riskparityradio.com to join our community of thoughtful DIY investors.

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In this episode we answer emails from Ed, Joe and Jack. We discuss a commodities fund, BCI, some more cowbell, and Fidelity's share lending program.

And THEN we our go through our weekly and monthly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional Links:

Father McKenna Center Donation Page: Donate - Father McKenna Center

BCI vs. PDBC vs. COM vs. DBMFX: testfol.io/analysis?s=3NIFkA7mNB9

Small Cap Value vs. S&P 500 In 21st Century: testfol.io/analysis?s=gkqbgk7mzka

Breathless Unedited AI-Bot Summary:

Looking for that perfect balance between return potential and downside protection? This episode delivers practical insights for DIY investors navigating today's complex markets.

We dive deep into commodity ETFs as listener Ed asks about PDBC versus BCI for his portfolio. The comparison reveals surprising differences in expense ratios, management approaches, and tracking errors that could significantly impact your returns over time. Frank shares why he's personally shifted away from dedicated commodity funds toward managed futures for inflation protection.

The conversation then turns to small cap value investing, but with a crucial twist that many investors miss. Rather than focusing solely on whether small cap value will outperform the broader market, Frank emphasizes its diversification benefits during market downturns. The 2022 market crash provides a perfect case study: while growth stocks plummeted 30-50%, value stocks ranged from -10% to +10%, creating powerful rebalancing opportunities that can enhance long-term performance.

We also examine Fidelity's Fully Paid Lending Program, which allows investors to earn additional income by lending their securities. While the potential return seems modest (around 0.625% annually), we consider the counterparty risks and regulatory protections you might sacrifice.

The episode concludes with our weekly portfolio reviews revealing fascinating performance patterns in 2024. Gold continues to shine with a remarkable 26.81% year-to-date gain while the broader market struggles. This performance disparity highlights why thoughtful asset allocation matters more than ever for investors seeking to build truly resilient portfolios.

Whether you're managing a multi-million dollar portfolio or just starting your investment journey, these insights will help you navigate market volatility with greater confidence and clarity.

What's your approach to balancing growth and value in your equity allocation? Have you considered how different assets might interact during the next market downturn?

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In this episode we answer emails from Luc, Ellen and Andrew. We discuss Luc's target portfolio, the process for evaluating and choosing new assets for a portfolio -- comparing why managed futures pass the test, while covered call fund and TIPs funds don't --, what's actually in our personal variation of the Golden Ratio portfolio, finding old podcast episodes and basic rebalancing principles as to timing. And learn some Canadian French and Minnesota vernacular along the way.

Links:

Andrew Beer Interview on Masters In Business Podcast: Andrew Beer on the Hedge Fund … - Masters in Business - Apple Podcasts

RPR Episode 40 on YouTube: Episode 40: Answering A Question About Big ERN's Gold Analysis From Joseph K.

Kitces Article on Rebalancing: Optimal Rebalancing – Time Horizons Vs Tolerance Bands

Breathless Unedited AI-Bot Summary:

What makes a truly resilient portfolio? In this revealing episode, Frank Vasquez pulls back the curtain on both theoretical and practical aspects of risk parity investing through thoughtful listener questions.

When a software engineer from French-speaking Canada shares his leveraged risk parity portfolio, Frank offers nuanced guidance on balancing potential returns with sustainability. Rather than dismissing leverage entirely, he suggests a more measured approach—reducing exposure to funds like UPRO while maintaining their rebalancing benefits. This practical compromise exemplifies Frank's philosophy of building portfolios that remain psychologically manageable through market turbulence.

The conversation takes a fascinating turn as Frank reveals his framework for evaluating new investment opportunities. Unlike many advisors who chase trends, his three-question methodology ensures only truly valuable assets earn portfolio space. His explanation of why managed futures succeeded where TIPS failed demonstrates how professional-grade analysis can be applied to personal investing. "The truth is," Frank notes, "a lot of otherwise viable or interesting strategies actually just don't fit into what we're trying to do here."

Perhaps most valuable is Frank's unprecedented breakdown of his personal portfolio holdings. Beyond the expected allocations to stocks, bonds, gold and alternatives, he shares his experiments with direct indexing of property and casualty insurance companies—a Warren Buffett-inspired approach that provided positive returns even during 2022's difficult markets. This rare glimpse into a professional's actual implementation bridges the gap between theory and practice.

Whether you're questioning how often to rebalance, wondering about international exposure, or simply curious about how a professional approaches their own money, this episode delivers actionable insights while maintaining Frank's trademark blend of humor and wisdom. Ready to build a portfolio that marches to a different drummer? This is the roadmap you've been waiting for.

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