Episode 445: "Funny How" With Listener Humor, Rebalancing Leveraged Funds, And CTA

Risk Parity Radio

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9d ago 32:56

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In this episode we answer two emails from John and one from Pete. We revel in John's summary of the podcast from its humble beginnings to its current form, his sailboat analogy to portfolio construction and his highly humorous questions. We also discuss two common but conflicting investor biases: rejecting assets because they've performed poorly recently or because they've performed too well recently and discuss rebalancing rules for leveraged funds and the newer managed futures fund CTA.
Links:
Listener Blog Post Describing Risk Parity Concepts: 15 Uncorrelated Assets | SSiS
Pete's Testfolio Rebalancing Analyses: testfol.io/?s=k6HKskV4lsy
Testfolio CTA Analysis: testfol.io/analysis?s=9WzkwrOUa0h
Breathless Unedited AI-Bot Summary:
The evolution of Risk Parity Radio takes center stage as we dive into a fascinating listener journey through 445 episodes of financial wisdom and soundbite mayhem. From our humble COVID-project beginnings to developing signature elements like standardized soundbites, cowbell references, and charitable partnerships, this episode offers a rare look at how the podcast has grown alongside its community.
A brilliant sailing analogy perfectly captures the essence of risk parity investing: just as skilled sailors can make forward progress in various wind conditions by using the right sails, diversified portfolios can navigate different economic environments by including assets that perform well under specific conditions. This metaphor elegantly explains why we emphasize creating all-weather portfolios rather than attempting to predict market movements.
Gold's dramatic turnaround provides a perfect case study in investment humility. In late 2022, some listeners questioned including gold, calling it a "waste of space" that wasn't fulfilling its purpose. Fast forward to 2025, and gold delivered an impressive 28% compound annual growth rate. This example highlights a common cognitive trap: rejecting unfamiliar assets either because they've performed poorly recently ("must be done forever") or because they've performed too well ("must be too high to invest in now").
We also explore technical questions about rebalancing strategies for portfolios containing leveraged ETFs and observations about managed futures funds, demonstrating how complex portfolio management requires thoughtful consideration beyond simple formulas.
Whether you're a longtime listener appreciating the walk down memory lane or a newcomer curious about our approach to investing, this episode delivers valuable insights about portfolio construction while maintaining our characteristic blend of education and entertainment. Ready to dive deeper? Subscribe now and join our community of thoughtful DIY investors!
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Chapters

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

2. John's Podcast Journey Review (00:06:10)

3. Sailing Analogy for Risk Parity (00:10:30)

4. Gold's Dramatic Performance Turnaround (00:14:00)

5. John's Humorous Investment Questions (00:19:35)

6. Rebalancing Strategies with Leveraged ETFs (00:24:00)

7. Final Thoughts and Contact Information (00:29:00)

449 episodes

#Trading #Business #Frank Vasquez