Episode 421: NItty Gritty Portfolio Considerations And Variations, What We Actually Hold, And The Basics Of Rebalancing

Risk Parity Radio

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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Chapters

1. Welcome to Risk Parity Radio (00:00:00)

2. Luke's Portfolio Review (00:02:22)

3. Adding New Assets to Portfolios (00:09:05)

4. Frank's Personal Portfolio Breakdown (00:18:34)

5. Accessing Past Episodes & Resources (00:27:23)

6. Portfolio Rebalancing Strategies (00:33:58)

7. Minnesota Sayings & Show Close (00:39:10)