Unlocking The ‘Holy Grail’ Of Investing With Return Stacking ETFs

Asset allocation and portfolio construction are my passions, and there’s a deeply personal reason behind it.

Ray Dalio calls diversification the “Holy Grail” of investing, and it can potentially transform your thinking about financial planning, investing, and achieving your dreams.

In this interview, I share my personal story about my commitment to non-correlated diversifiers that thrive in a down market.

My family faced a financial crisis when my grandmother needed a nearly $1 million surgery. The potential for bankruptcy was real. No emergency fund could handle such a massive expense. That’s why having assets in your portfolio that can be relied upon to go up when the market declines are crucial.

Imagine needing to come up with several hundred thousand dollars for whatever reason in October 2022 when a traditional 60-40 portfolio was down 21%. However, alternative assets such as managed futures were up as much as 47% then. That’s the potential salvation we needed if those huge expenses had arrived at the worst possible moment.

This experience taught me the importance of asset allocation, especially for someone with a 50+ year time horizon. Because unpredictable events will happen—black swan events that could bankrupt you if you’re not prepared. Sleeping Well At Night in all markets and economic conditions requires knowing you’re covered in case something terrible happens that you can’t yet imagine.

That’s why it’s my privilege to present this interview with Rodrigo Gordillo, who helps run the Return Stacked family of ETFs.

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Adam Galas:

Today, we have the privilege of speaking with Rodrigo Gordillo, President of Resolve Asset Management Global, who co-founded and is a joint venture with Newfound Research for the Return Stacks ETFs I’ve written about for the last few weeks and months. Thank you so much for joining us, Mr. Gordillo.

Rodrigo Gordillo: Thank you for having me. It’s a pleasure. I can’t wait to get into it.

Adam Galas: Thank you. I want to start by explaining why this is so passionate for me. Asset allocation truly has changed my life and my family’s life. You know, we’ve been struggling with some medical issues with, uh, you know, unfortunately, you know, some of our, uh, family members have had cancer, and you know, uh, last year, last year, one of my family members came down with brain cancer. And you can imagine how terrible that was. And this wasn’t just something that happened, you know, over time. This was, you know, they, they suddenly, we thought they had a stroke and they, it turns out, needed emergency surgery. And thank goodness they are, you know, they’re okay now. And we were, our insurance was, you know, relatively good by American standards.

Rodrigo Gordillo: Right.

Adam Galas: The actual cost of this surgery was $880,000. Now, you know, our family is okay. And, and, you know, but, you know, along with some business setbacks, we had to come up with A lot of money quickly. And so this is where you can have an emergency fund of six months, 12 months. Sometimes, some people have two or three years, but when talking about potentially hundreds of thousands of dollars in costs just out of the blue, you can’t have a million dollars in an emergency fund. That’s just not tenable. We’re not Bill Gates. This is where, fortunately, we could tap our assets because it was 2023, the market was roaring, and everything was okay. But this is when I realized what will happen to people like us in 2022.

Imagine you had a six-month emergency fund, a million dollars in a 60 40, and it’s October 2022; the 60 40 is down 21%. And it would be best if you had hundreds of thousands of dollars. Now, you are screwed. Stocks and bonds were the worst bond bear market in history. Stocks and bonds usually don’t do that. But they did. This is where I learned about these alternative asset classes and how trends, bonds, and stocks have stayed the same, at least since 1988, in the same year, all three. And when you add a fourth class called carry, they’ve in] recorded history, as far my research has found, they’ve never all gone down simultaneously, which means that you would have something you can sell at a profit. To raise cash quickly if God forbid some terrible calamity befalls your family. Thank you so much for allowing me to share this and discuss the importance of diversification with our subscribers and readers, and how return stacking can help us have our cake and eat it.

Rodrigo Gordillo: Well, Adam, I think. Thank you for sharing that, by the way, and I’m sorry to hear about all the trouble. Uh, we’re going through a health crisis right now, as well as in the family. We found. There was mold on the second floor of…