Risk Parity Radio - Episode 407: Multi-Asset Funds Like GDE, "Life Cycle" Econ-Models, Historical Interest Rate Musings And Portfolio Reviews As Of March 14, 2025

Episode 407: Multi-Asset Funds Like GDE, "Life Cycle" Econ-Models, Historical Interest Rate Musings And Portfolio Reviews As Of March 14, 2025

03/16/25 • 40 min

In this episode we answer emails from Dustin, MyContactInfo, and Mark. We discuss the ETF GDE and combo return stacked funds generally, why you probably don't want to use economists' "life cycle model" for personal finance planning due to its unrealistic underlying assumptions, and whether we could use historical high interest rates to create market timing and allocation signals between stocks and bonds.
And THEN we our go through our weekly portfolio reviews of the eight sample portfolios you can find at Portfolios | Risk Parity Radio.
Additional links:
Article About BTGD: New ETF Offers Dual Exposure to Bitcoin, Gold | etf.com
Optimized Portfolios Site: Optimized Portfolio - Investing and Personal Finance
Rational Reminder Podcast Re Lifecycle Model: Ben Mathew: The Lifecycle Model vs. Safe Withdrawal Rates (SWR) | Rational Reminder 340
Debunking Economics: Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned?: Keen, Steve: 8601406370678: Amazon.com: Books
Amusing Unedited AI-Bot Summary:
When market turbulence strikes, diversification proves its worth. This week, as the S&P 500 tumbles nearly 4% year-to-date and the NASDAQ falls over 6%, gold emerges as the standout performer—surging past $3,000 an ounce with returns exceeding 13%. These dramatic market movements create a perfect real-world demonstration of why uncorrelated assets matter in portfolio construction.
We dive deep into the limitations of economic models for personal financial planning, examining why the Life Cycle Model—while logically sound in theory—falls apart when confronted with life's inherent unpredictability. The assumption that we can accurately forecast our lifespans, relationships, and changing preferences decades in advance reveals a fundamental disconnect between theoretical economics and practical personal finance.
A thought-provoking listener question explores whether allocation strategies should shift dramatically if interest rates ever reach levels where risk-free returns match or exceed historical stock returns. Drawing on lessons from the early 1980s when Treasury yields exceeded 15%, we consider why developing investment rules based on rare historical anomalies rarely serves investors well.
The weekly portfolio review shows mixed performance across our eight sample portfolios, with those holding significant gold allocations weathering the current volatility far better than stock-heavy alternatives. We also examine rebalancing decisions for the Levered Golden Ratio portfolio, making thoughtful adjustments to improve its value tilt and diversification characteristics.
Whether you're curious about combining assets in hybrid funds, wondering how managed futures perform during market corrections, or simply wanting to see how different portfolio strategies are navigating current conditions, this episode delivers practical insights for the thoughtful, independent investor. Join us for this exploration of asset allocation in uncertain times.

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Episode 406: REITs, Vacant Land, Bitcoin Today And Eh, Steve!

In this episode, we answer emails from Spencer, Ko and Steve. We discuss REITs as a portfolio allocation, why vacant land is probably not a good investment for most people, "talking your book" with bitcoin for fun and profit and how it looks today in a portfolio, law school education and that infamous Cederburg paper (again but only briefly).
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
NAREIT -- Types of REITs: Learn about Investing and Market REIT Sectors Today
Weird Portfolio: Weird Portfolio – Portfolio Charts
Ko's Michael Saylor Video: Michael Saylor’s Big Bitcoin Prediction | Relai Bitcoin Podcast #90
Amusing Unedited AI-Bot Summary:
Ever caught yourself obsessing over a particular asset class? In this engaging episode of Risk Parity Radio, Frank Vasquez tackles three fascinating investment topics that challenge conventional wisdom while providing practical guidance for DIY investors.
We begin with an exploration of REIT allocations beyond the standard 10% recommendation. Frank breaks down why correlation with broader markets matters more than yield history, why individual REITs often outperform REIT index funds for diversification purposes, and why these investments belong in retirement accounts rather than taxable brokerage accounts. A listener's cautionary tale about vacant land investing serves as a powerful reminder that illiquid, non-income-producing assets can become financial quicksand rather than solid foundations for retirement.
The conversation shifts to Bitcoin's evolving role in investment portfolios. Frank cuts through the promotional noise from crypto evangelists, explaining how Bitcoin's behavior has transformed from a true diversifier to essentially "a three times leveraged QQQ fund" highly correlated with tech stocks. This critical insight helps investors properly categorize crypto within their asset allocation rather than viewing it as a separate diversifying asset class.
Finally, we examine the controversial academic paper promoting 100% equity portfolios for retirees. Frank exposes the significant limitations of this research, demonstrating why seemingly groundbreaking financial theories often collapse under real-world scrutiny. Throughout the episode, Frank's pragmatic approach reminds us that successful investing requires looking beyond popular headlines and understanding the fundamental characteristics of what we own.
Whether you're rethinking your REIT strategy, curious about crypto's place in your portfolio, or questioning conventional retirement wisdom, this episode offers clarity amidst the noise of financial media. Share your own investment questions at [email protected] and join our growing community of thoughtful DIY investors.

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Episode 408: Rebalancing Frequency, Share Lending, Style Boxes, Strips, And The Golden Ratio Portfolio

In this episode we answer emails from Randy, Richard and Jamie. We discuss rebalancing frequency, share-lending at Fidelity, moves in Morningstar's style boxes and strips treasury funds vs. long term treasury bond funds.
And we announce the new listing of the Golden Ratio portfolio at Portfolio Charts and thank Tyler and Van for that.
Links:
Father McKenna Center Donation Page: Donate - Father McKenna Center
Golden Ratio Portfolio at Portfolio Charts: Golden Ratio Portfolio – Portfolio Charts
Golden Ratio Portfolio Write-Up: Beautiful Constants and the Golden Ratio Portfolio – Portfolio Charts
Kitces Article re Rebalancing:
Optimal Rebalancing – Time Horizons Vs Tolerance Bands
Discussion of Changes to Morningstar's Style Boxes: Morningstar redefines growth/value style box criteria - Bogleheads.org
Risk Parity Radio All Episodes Feed Page: Risk Parity Radio RSS Feed

Amusing Unedited AI-Bot Summary:

Exciting news opens this episode as Frank announces the Golden Ratio Portfolio has been officially added to Portfolio Charts, complete with its own dedicated page and insightful write-up. This recognition represents a significant milestone for a portfolio strategy that has been a cornerstone topic throughout Risk Parity Radio's 400+ episodes.
The heart of the episode focuses on answering thoughtful listener questions about portfolio management techniques. Randy inquires about rebalancing frequency and whether to participate in Fidelity's securities lending program for gold ETFs. Frank explains that while rebalancing more frequently than once a year generally doesn't improve performance, coordinating semi-annual rebalancing with tax planning can be advantageous. As for securities lending, Frank shares his personal experience that these programs work smoothly but typically generate minimal income—setting realistic expectations for listeners considering this option.
A particularly detailed discussion explores the nuances between traditional long-term treasury funds and STRIPS funds (GOVZ, ZROZ, EDV). Frank clarifies that STRIPS-based ETFs typically move at approximately 1.5 times the rate of standard long-term treasury funds when interest rates change, effectively functioning as a form of leverage. This characteristic makes them valuable tools for tax-loss harvesting or creating more efficient allocations by achieving similar interest rate sensitivity with smaller position sizes. Rather than focusing on market timing for transitions between these instruments, Frank emphasizes coordinating such moves with broader tax management strategies—practical advice that demonstrates how risk parity investors can implement sophisticated portfolio techniques while maintaining tax efficiency.
Want to connect with other Risk Parity Radio listeners? Frank announces a meetup at the Economy Conference at the Solari Hotel. Email [email protected] for details and to join the community of thoughtful DIY investors exploring alternatives to traditional asset allocation.

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