Losing Your Mind Over a Hot Dog

Plus, monthly distributions designed to age 100
And two must-attend webinars

 

Ric Edelman: It's Friday, September 20th. I'm continuing to get lots of feedback from the podcast I did on Wednesday, where I talked about my voting preference in the presidential election. If you missed that podcast, the link is in the show notes, I welcome your comments. And I will, starting in October, talk a lot more about it and I'll share a lot more about the comments.

And I'll share as well, many of the comments that I've received. There are some wacky ones as you might expect, not calling you wacky, but the overwhelming majority are thoughtful, intelligent, well-considered viewpoints that are really, frankly, very helpful to me in my deliberation.  And here's the amazing thing: Of all the comments that I've gotten so far, it's 50-50. Half of the comments I'm getting are supporters of Donald Trump, and half the comments I'm getting are supporters of Kamala Harris. All of you, collectively, are as befuddled and divisive and split as the rest of the country. I guess I shouldn't be surprised, but maybe you are.

Maybe you would have assumed that people tuning into a podcast hosted by the guy who was three times ranked the number one independent financial advisor in the country, the founder of the firm who is still ranked by Barron's as the Number One RIA firm in the nation this year, the mega one, according to Barron's seven years in a row, we've been so-ranked at Edelman Financial Engines. And yet, despite the fact that it's a podcast talking about money and the future and personal finance and so on, I think many people would assume, gee, this must be a conservative audience because they're focusing on money. Well, apparently not. The audience is 50-50, just like the rest of the country. So, stay tuned for more on all that. And if you haven't shared with me your comments, I invite you to do so. Because I genuinely, sincerely and honestly am very interested in what you think to help me, because I remain undecided in this election.

What I want to talk to you about today is this…I want to talk to you about hot dogs. Well, not really, but I'm going to open with that. Do you love hot dogs? What's your favorite brand? What's your favorite hot dog? Well, a hot dog falls into a category of food that is called ultra-processed. Hot dogs, bacon, sausage, salami, bologna. All of that is in the category of ultra-processed food. So are Pringles potato chips. So are Goldfish snacks.  A lot of the cookies that you eat, a lot of the ready-made soups. All of these are ultra-processed.

You want to have a fairly good indication of what is or is not an ultra-processed food. Go into the supermarket.  Walk the perimeter of the supermarket. The perimeter is where you find cheese. It's where you find vegetables. It's where you find fish and meat that is natural, or about as natural as you're going to find in a supermarket. Natural food in the aisles, and I'm not talking about the aisle where you have tin foil. I'm talking about the aisles where you have the cookies and the chips and the breakfast cereals and on and on and on. That, everything in the aisles, that's processed. That's processed. All of it ultra, almost all of it ultra-processed.

Bottom line is, think about what you're eating right now. If it didn't literally come out of the ground, either in the form of vegetables, fruit, or animals--if it didn't literally come from nature--if mankind was involved in its manufacture, it was processed. And ultra-processed foods have now been linked to dementia. Yeah. If you eat a lot of this stuff, you've got a greater risk of developing Alzheimer's or dementia. A new study of 130,000 adults tracked across the country for the past 43 years. And 11,000 of them developed dementia, nearly 10%. And those who had two servings of processed red meat, we're talking hot dogs and the like, two servings per week, had a 14% greater risk of dementia. Unprocessed red meat, we're talking steak and pork chops, did not have a bigger risk than the overall population. There was some, but not much. Ultra-processed foods contain ingredients like soy, protein isolate, high-fructose corn syrup, modified starches, artificial flavorings, and color additives. They also have high levels of sugar, fat, or sodium. We're talking about soda, flavored yogurt, instant soup, like I said, most breakfast cereals. And the problem is that these account for 60% of the calories that we consume in this country, both children and adults. And all this stuff leads to heart disease, diabetes, obesity, cancer, gastrointestinal diseases.

Now, we can add dementia to the list. And there was another study in Brazil that found that people who consume 20% or more of their daily calories from ultra-processed foods experienced not just more incidents of dementia. They experienced a more rapid cognitive decline. And in the United Kingdom, a study of 72, 000 adults over 10 years found that a diet of 10% ultra-processed foods, just 10%, led to a 25% increase in dementia. So, if you want to reduce the risk of developing Alzheimer's or dementia, you need to establish a healthy lifestyle. You'll cut your risk in half.

And on top of all this, piling on, is a new study in The Lancet (a weekly general medical journal and one of the oldest of its kind). They said you need to adopt those healthy lifestyles and you know what they are. There's nothing shocking here. Don't smoke, don't drink, good diet, no ultra-processed foods, get plenty of sleep, exercise, reduce your stress, and maintain and develop good relationships. You do these and you dramatically cut the risk of dementia.

And wait, there's more. The Lancet talked about a few other things in addition to this list. Number one, a risk of dementia, untreated hearing loss. So how loud is the volume on your TV? Is your spouse constantly telling you to turn it down lower? Do you respond to questions by saying “what?” You can't hear them quite right? If you're in a crowded room, do you struggle to understand what people are saying because of all the ambient noise all around you. Do you not like going to concerts because of how loud they are? If you have a hearing loss and you don't treat it, meaning you don't get hearing aids, then you're forcing your brain to work harder to try to listen. And that is putting stress on your brain, which the study says can accelerate dementia.

And the same thing for untreated eyesight problems. Do you struggle to read? Are you squinting all the time? Are you unable to read road signs on the highway when you're driving at a distance? If you don't get eyeglasses, what, are you afraid of looking like a dork? Four eyes, huh? Are you afraid of what people are going to think of you if you have a hearing aid in your ear or glasses on your nose? If that vanity is stopping you from doing this, you're forcing your brain to work too hard trying to see, trying to hear, and the strain is creating an increased cognitive load.  And according to Lancet's study, adults over 65 who experience vision loss have a 50 percent increase of dementia. But if you correct your vision problems, your risk drops dramatically.

Two other things that The Lancet said can dramatically cut your risk of dementia: Number one is education. What are you doing to Exercise your brain. You know, you lift weights to exercise your muscles. You gotta go do a crossword puzzle or play chess, or frankly, just play Monopoly with friends to exercise your brain. And don't fall into a rut. Don't simply play Wordle every morning. That's not going to cut it for brain exercise. You've really got to exercise. You've got to do different things with your brain. Get yourself really thinking and working. This is why a lot of good exercises are also good for your brain. Things that challenge your body, that force your brain to really think about it, are a lot better than autopilot of just walking on a treadmill.

And the final item, get away from air pollution. What you're breathing into your body, if they are pollutants, is a problem.  It creates not only physical issues, but those pollutants not only go into your lungs, they get into your bloodstream and that ends up in your brain. So where do you live? Is there a lot of air pollution where you live? If at all possible, move away. somewhere else. Lots of ways that we can reduce the risk of developing Alzheimer's, delay the onset of symptoms and make those symptoms less severe. And none of this has anything to do with taking medication. All of this has to do with your own lifestyle and your own choices.

Ric Edelman: You're listening to the Truth About Your Future. One of the biggest challenges facing retirees and financial advisors alike, something we talk about here on the program because I can't frankly find many others talking about it elsewhere...is longevity. This is, I think the dominant issue that our nation and frankly, the world is facing from a sociological issue, an economic issue. 

And we need to talk about it. We need to keep talking about it. So, I'm really happy to bring on to the program, Nate Conrad. He is the head of LIFEX. Nate, welcome to the program.  

Nate Conrad: Thanks for having me. Excited to be here, Ric.  

Ric Edelman: Nate was formerly with Goldman Sachs. He was the former head of markets at Stone Ridge and the president of NYDIG.  So, pretty impressive credentials. Nate, I'm really glad that we're having this conversation. What, from your perspective, should financial advisors particularly be thinking about, in terms of longevity for their clients? 

Nate Conrad: I think you hit the nail on the head, Ric. People are living longer than they used to. And I think most financial advisors really haven't looked at the data to understand both the expected lifespan for the average client, as well as what the right tail looks like. When we talked to financial advisors, we asked them how long they're planning for. 

Most people seem to still be planning to a lifespan around, maybe the 92 to 95 range. And there's such a significant risk for people to live beyond that. And if you're just looking at the probability of success to 92, 95, there's some real risks to people about how they're going to get through those later years in their life. 

Ric Edelman: Yeah, and I know there are two fundamental reasons why financial advisors persist in assuming age 90 or 95 for life expectancies for their clients. This is a key number because that's the basis for their financial planning projections. The number one question all clients always ask, all advisors is, will I ever run out of money? 

Because that's the number one fear everybody has. I don't care how much money you've got, you fear running out of money before you die. We all remember when we were younger, running out of money at the end of the month. Right? Remember when we had to juggle our limited paycheck against our huge incoming expenses? 

We don't want to have that happen when we're in our retirement. Running out of cash and being dependent on social security. So financial advisors always predict or at least try to estimate when the clients are going to die. And there are two reasons financial advisors consistently say you're going to die at age 90 or age 95. 

Number One, I've been a financial advisor for 40 years and that's what I've always said. And advisors are just lazy, they're not updating their data.  

Number Two, they look at actuarial data, published by the IRS and typical insurance companies, and they are backward looking. Here's how long people have lived over the past 100 years. 

And yeah, we're making some advances in medical science, but still, we're going to assume people are going to live in the future about as long as they've lived in the past. I think that advisors are woefully inadequate in their understanding of the longevity issue. So, explain your premise though, Nate. 

Why is it that advisors need to rethink? What is it that's going on that is causing us all, who's alive today, to likely be alive longer than anyone ever has in human history?  

Nate Conrad: Absolutely. I'd probably add a third thing that is going on to your list, which is the clients of financial advisors tend to live longer than the population average. 

We may not want this to be true in society, but it is true today that if you're better educated, if you're wealthier, you tend to have a longer lifespan, better access to medical care. And so, the mainstream media reports of life expectancy tend to really underestimate what's going to be the case for most financial advisors’ clients. 

When you look at everything that's happening in the healthcare system, and you look at the longevity improvement, not only are actuarial tables themselves very robust in predicting lifespan, but the historical data around longevity improvement has actually been very stable in the last many decades about ongoing on the order of about 1 percent reductions in mortality, year over year over year. There's been a little bit of a kink recently that people talk about in the population average, that has caused a little bit of a dip in the population average, which again for a financial advisor is really misleading because that's just not applicable to the client that most people that would be listening to this podcast would be interacting with. 

Those people are continuing to see longer lifespans for those clients. And today the number would be something like 25% of a financial advisor's clients should still be alive at age 95, based on what the actuarial tables are saying today, which is just a massive amount if the financial plan only goes to 95 to have 25% of people alive and wondering if they're gonna be alive to 100, 105. 

Ric Edelman: And that's based on today's data. By the time the client does get to age 90 or 95, just think of the advanced medical innovations we're gonna have in place by then. It's just silly, I think. There are so many medical innovations underway today, and we have only begun to scratch the surface with AI and it's incredible coming potential. Let alone quantum computing over the next couple of decades. So, to assume that you're going to have a client, or frankly, as you pointed out, all of your clients die by 95, that's simply unrealistic. 

And yet it lulls the advisor and the client into a false sense of confidence, because if they run the modeling and they say, sure, based on your income and based on your expenses and based on the presumed performance of your portfolio over the next few decades, you'll easily have enough money to last until age 90 or 95.  But if you run the numbers to age 105, all of a sudden, that financial plan blows up. And I don't think a lot of people are giving that a lot of thought.  

Nate Conrad: Absolutely. The other thing that worries us a lot is that this is one dimension of the risk people have, which is the longevity risk component. 

Ric Edelman: Talk about LIFEX and the focus you have there, because at Stone Ridge and at NYDIG, your big focus has been on the crypto community. This is not a crypto conversation. 

You have moved into a huge new focus with LIFEX and I don't think it's a household name yet. So tell us about LIFEX and its relevance to this whole longevity issue.  

Nate Conrad: At Stone Ridge, from day one of the firm, our goal has always been how do we think about helping improve the level of financial security for as many people out there as possible? And the products that we’ve done over the years have always been focused around how do we help people get access to things that are different than stocks and bonds and different than the 60/40 portfolio that most people own that provides potential return streams that have a lower correlation, helps diversify the portfolio, and help create a more reliable path to and through retirement.   

And LIFX is really, in our view, the culmination of that journey in our mind. It's a fund that invests in U. S. Treasuries to create a monthly distribution stream that's designed to age 100. So, we're trying to make it possible for financial advisors to extend the planning horizon for their clients.  It's meant to be part of a solution. It's meant to be an allocation in a portfolio. But by investing in LIFX, you're investing in, this fund that is going to target, either a fixed or inflation-protected set of monthly distributions. And we think that there are really powerful characteristics for that, both from an investment perspective, as well as from the financial planning and emotional perspective,  

Ric Edelman: Well, so talk about how that works then. Tell me logistically what's involved here.  

Nate Conrad: This is for people really starting to face longevity risk and thinking about planning for that post-paycheck phase of their life.  

Ric Edelman: Okay.  

Nate Conrad:  You invest, it turns around and it deploys that money into an underlying investment portfolio that's focused on the U. S. Treasury market. And it starts paying monthly distributions immediately, targeting either a fixed rate or a rate that's designed to adjust annually, based on CPI. (Consumer Price Index) 

Ric Edelman: Alright, let's make sure I understand how this works.  Let's say they’ve got a million-dollar portfolio. I decide to put 100 grand into this, and you're going to put it into treasuries. The treasuries you're buying, are they short term, long term, or is it a mixed ladder of treasuries?  

Nate Conrad:  It's a mix. It looks a lot like a ladder out through age one hundred, with some adjustments to the weights to reflect longevity over time. All the funds hold today is just treasuries.  It's also distributing some of your own capital back to you above and beyond that. So, the NAV (Net Asset Value) is intended to decline over time. It’s important to understand if you put in a hundred thousand dollars at age 60, the amount of money in the NAV at age 75 is probably going to be lower than that.  

Ric Edelman: So, in other words, I'm going to be receiving not only the interest from the treasuries, I'm also going to be receiving some of my principal back over time. 

Nate Conrad: Exactly right.  

Ric Edelman: I think some people listening to this are going to say, wow, what an innovative idea. But it does demonstrate that we do need to think innovatively about longevity. We can't continue to approach retirement strategies the way that we've been doing it for the past 50 years. And the problem is most advisors have been in business for the past 50 years. When I got started as an advisor way back in 1986, the notion of long-term financial planning really didn't exist because you didn't have to worry about your long-term future because you weren't gonna have one. You were gonna be dead from heart disease or lung disease, or cancer in your sixties or seventies, maybe into your early eighties. 

The initial financial plans that I created back in the 1980’s and early nineties assumed an age 85 life expectancy, and over the years we gradually increased it to 87 and then 90 and 92 and we got it up to 95. I don't know of any financial advisor who is routinely projecting for their clients age 100 life expectancies. When you talk to all these longevity scientists, I've been on the boards of the Milken Institute Center for the Study of Aging and the Stanford Center on Longevity, and as you pointed out, the more affluent you are, the more likely that will be for you, because we have better access as you said to healthcare. We have lower stress lives. We take plenty of time to go to the gym. We exercise better. We have better diets. We're not drinking and smoking as much as our elders used to. 

We are engaging in behaviors that are more likely to allow us to live longer than anyone has in human history. And that, as you pointed out, perfectly typifies the typical client base of the typical financial advisor.  And I can imagine though, it's a difficult conversation. Do you counsel advisors on how to broach this with their clients? Because when I talk to consumers about the notion that they're going to live to age 100…I do a lot of longevity seminars. I just did one for the New York Public Library last month. And when I talk about the fact that people can reasonably expect they're going to live to age 95, or 100, or 105, I get a lot of pushback. Not that people deny Nate that they're going to live to age 100, but the fact that they say they don't want to, because they have pictures of Whistler's mother in their head.  If all I'm going to be doing at age 95 is sitting in a wheelchair, staring at a window, drooling in a nursing home, I think I'd rather die at 90. So, people don't want to talk about living a long time. So how do you get financial advisors to broach this conversation with clients in a way that engages them rather than repels them? 

Nate Conrad: It's such an important topic. And I think it fits a theme in the financial advisor industry about how do we do more than just help literally manage the finances, but help people live better lives. So, part of it is helping them become aware of this possibility that they will live that long. And the next step is helping create strategies for them to enjoy that. And part of that's a question of financial planning, and how do you achieve that financially? How do you achieve that without tremendous stress that ruins that experience for you. And then some of that’s physical health, enjoyment, connectivity, the human aspects of living. 

Our goal in designing the product this way was really inspired by some of the behavioral finance discoveries. 

Ric Edelman: So, I think that this offers a lot of elements that help the advisor serve the client's best interest in dealing with an issue that the clients haven't spent a lot of time thinking about and would rather not be for a whole lot of reasons, but which the advisor really needs to. 

So, I really think this is worth financial advisors and investors over the age of 60 paying a lot of attention to. I encourage you to go to LIFEXfunds.com. We've got the link to it in the show notes for you. So just click on that and you'll go straight to their website. Nate, any final thoughts that you would like to add to this conversation? 

Nate Conrad: Yeah, I think I would just reiterate what we said at the top of the show. It's so important for financial advisors to really take a close look at what they're thinking about for life expectancy for their client base. And, we're here today with the information we need to have to know to do things differently in the future. And if we were doing the right thing, historically, this isn't to say anybody's been doing their job wrong, but the future is going to be different than the past, probably.  And we all got to take that into account today.  

Ric Edelman: That's Nate Conrad. He's the head of LIFEX, LIFEXFunds.com. The link’s in your show notes. Thanks, Nate, for joining us on the podcast today.  

Nate Conrad: Thanks for having me, Ric. 

Hey, this afternoon at 1:00pm EDT is my webinar, the Q4 Crypto Outlook: What You Need to Know Now. This is going to be really cool. Matt Hougan is joining me today. He's got 20 plus charts that are just eye-opening and revealing what's going on in the world of crypto. What can you expect to happen in the fourth quarter of this year and into early 2025?  You're not going to want to miss this. So check it out today at 1 PM and, you'll really, really enjoy it. It's free. You get one CE credit as well if you're a financial advisor. The link to register for free is in the show notes.

And this coming Wednesday, September 25th, also at 1:00pm EDT, we have another webinar on crypto. This one Unlocking Alpha in Crypto-Equities and Beyond. Going beyond buying Bitcoin and Ethereum and investing in the publicly traded stocks that are engaged in the crypto community.  We're talking about Bitcoin miners, semiconductors, financial services, and a whole lot more. You're going to hear from Chris Rhine, Portfolio Manager at Galaxy, one of the top crypto companies. And he's going to share with you some innovative strategies and active management opportunities. If you're interested in learning more about two of the biggest topics in investment management, this webinar is going to be a whole lot of fun for you.  Again, it's next Wednesday, September 25th, at 1:00pm EDT. And again, you can register for free. The link is in the show notes. Looking forward to seeing you today, and again next Wednesday. 

If you like what you're hearing here on The Truth About Your Future, be sure to follow and subscribe to the show, wherever you get your podcasts, Apple, Spotify, YouTube, and remember to leave a review on Apple podcasts. I read them all. Never miss an episode of The Truth About Your Future. Follow and subscribe on your favorite podcast app.   

I’ll see you Monday. 

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Links from today’s show: 

Wednesday’s podcast on my election dilemma:  https://www.thetayf.com/blogs/this-weeks-stories/so-you-think-you-know-who-i-m-voting-for

Edelman Financial Engines: Edelman Financial Engines

Today's Webinar - Q4 Crypto Outlook: What You Need to Know Now: https://dacfp.com/events/q4-crypto-outlook-what-you-need-to-know-now  

9/25 Webinar - Unlocking Alpha in Crypto-Equities and Beyond: https://dacfp.com/events/unlocking-alpha-in-crypto-equities-and-beyond  

LIFEX Longevity Income ETFs: https://www.lifexfunds.com/ 

LIFEX - Stone Ridge Disclosures:  https://www.thetayf.com/blogs/disclosures/important-disclosures-stone-ridge-longevity-etfs

Become Certified in Blockchain and Digital Assets: https://dacfp.com/certification/  

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Follow Ric on social media:  

Facebook: https://www.facebook.com/RicEdelman  

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Brought to you by:  

Invesco QQQ: https://www.invesco.com/qqq-etf/en/home.html  

State Street Global Advisors: https://www.ssga.com/us/en/intermediary/etfs/capabilities/spdr-core-equity-etfs/spy-sp-500/cornerstones   

Schwab: https://www.schwab.com/  

TAYF Disclosure page: https://www.thetayf.com/pages/sponsorship-disclosure-fee  

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Important Disclosures - Stone Ridge Longevity ETFs 

Investors should carefully consider the risks and investment objective of (i) the Stone Ridge Longevity Income 2048 ETF and each other series of Stone Ridge Trust with the same investment objective and strategy that is part of the same fund family (the “Stone Ridge Longevity Income ETFs”) and (ii) the Stone Ridge 2048 Inflation-Protected Longevity Income ETF and each other series of Stone Ridge Trust with the same investment objective and strategy that is part of the same fund family (the “Stone Ridge Inflation-Protected Longevity Income ETFs” and, together with the Stone Ridge Longevity Income ETFs, the “Stone Ridge Longevity ETFs” and each, an “ETF”), as an investment in the Stone Ridge Longevity Income ETFs may not be appropriate for all investors and are not designed to be a complete investment program. Before making an investment decision, investors should (i) consider the suitability of this investment with respect to an investor’s investment objectives and individual situation and (ii) consider factors such as an investor’s net worth, income, age and risk tolerance. There can be no assurance that an ETF will achieve its investment objectives.  

Investors should consider the investment objectives, risks, and charges and expenses of the Stone Ridge Longevity Income ETFs carefully before investing. The prospectus contains this and other information about the investment company and may be obtained by visiting www.lifexfunds.com. The prospectus should be read carefully before investing. 

An investment in the Stone Ridge Longevity Income ETFs involves risk. Principal loss is possible. 

The purpose of each Stone Ridge Longevity Income ETF is to provide reliable monthly distributions consisting of income and principal through the end of a calendar year specified in the ETF’s prospectus. The purpose of each Stone Ridge Inflation-Protected Longevity Income ETF is to provide reliable monthly inflation-linked distributions consisting of income and principal through the end of a calendar year specified in the ETF’s prospectus. 

Each Stone Ridge Longevity Income ETF intends to make distributions for which a portion of each distribution is expected and intended to constitute a return of capital, which will reduce the amount of capital available for investment and may reduce a shareholder’s tax basis in his or her shares. 

Each Stone Ridge Longevity Income ETF is designed to make distributions at a rate calibrated based on the life expectancy of persons born in a specified calendar year (the “Modeled Cohort”), with the understanding that members of its Modeled Cohort are expected to be able to invest in a closed-end fund (each, a “Closed-End Fund”) that seeks to continue to receive that distribution rate beyond age 80. 

Each Stone Ridge Longevity Income ETF intends to make an identical distribution each month equal to $0.0833 per outstanding share of the ETF (multiplied, in the case of the Stone Ridge Inflation-Protected Longevity Income ETFs, by an inflation adjustment as specified in the ETF’s prospectus, which is intended to reflect the cumulative impact of inflation since the launch of the ETF) until April of the year in which members of the Modeled Cohort reach age 80. Thereafter, the ETF will reduce its per-share distribution rate to a level estimated to be sustainable through the year in which the Modeled Cohort reaches age 100. This event is referred to herein as the “recalibration.” An estimate of this reduced distribution rate is provided in each ETF’s prospectus; however, there is a risk that the ETF may ultimately recalibrate its distribution to be higher or lower than this estimate. 

Unlike a traditional investment company with a perpetual existence, each ETF is designed to liquidate in the year that its Modeled Cohort reaches age 100, and there will be no further distributions from each ETF beyond that year. Each ETF’s distribution rates will be recalibrated in April of the year in which the applicable Modeled Cohort turns 80 to a level designed to be sustainable until the year in which the applicable Modeled Cohort reaches age 100. However, due to certain risks impacting the market for the ETF’s investments, such as the risk of a U.S. government default, it is possible that an ETF may run out of assets to support its intended distributions prior to its intended term. Investors should consider the price of the ETF’s shares and the remaining term of the ETF at the time of their purchase when determining whether the ETF is appropriate for their financial planning needs. 

The planned distributions by the ETFs are not intended to change other than in connection with the one-time recalibration of the Fund’s distributions in the year in which the Modeled Cohort turns 80. While the Fund’s investment strategy is intended to substantially reduce the impact of changes in interest rates on the recalibration of its distribution rate, the recalibrated distribution rate may nonetheless be lower than currently estimated if interest rates decrease prior to the recalibration date. On the other hand, if interest rates increase, shareholders face the risk that the value to them of an ETF’s distributions will decrease relative to other investment options that may be available at that time, and that the market value of their shares will decrease. Similarly, if inflation is higher than expected, shareholders face the risk that the value to them of the ETF’s distributions will decrease relative to the cost of relevant goods and services. 

In the case of the Stone Ridge Inflation-Protected Longevity Income ETFs, the amount of an ETF’s distributions will be adjusted for realized inflation, not changes in market interest rates. If interest rates increase, shareholders face the risk that the value to them of an ETF’s distributions will decrease relative to other investment options that may be available at that time, and that the market value of their shares will decrease. Additionally, each Stone Ridge Inflation-Protected Longevity Income ETF will generally seek to fund its distributions and payments by purchasing Treasury Inflation-Protected Securities (“TIPS”) with cash flows that approximately match, in timing and amount, or in interest rate exposure, those distributions and payments. Because TIPS are only available in a limited number of tenors (i.e., lengths of time prior to expiration), this matching will only be approximate, and the ETF will need to periodically buy and sell securities issued by the U.S. Treasury, including TIPS, to fund any additional amounts needed to meet its distribution and payment obligations. This buying and selling activity exposes the ETF to interest rate and inflation risk, as changes in interest rates or expected inflation could make the securities it needs to purchase more expensive or make the securities it needs to sell less valuable. These risks are heightened in the early years of the ETF. These risks are also heightened in the case of a change to interest rates or expected inflation that disproportionately impacts particular tenors of U.S. Treasury securities (what is sometimes referred to as a “non-parallel shift”) because such a change could make the U.S. Treasury securities the ETF needs to buy more expensive without simultaneously making the U.S. Treasury securities already held by the ETF more valuable, or could make the U.S. Treasury securities the ETF needs to sell less valuable without simultaneously making the U.S. Treasury securities the ETF needs to buy less expensive. 

The Stone Ridge Longevity Income ETFs invest in debt securities issued by the U.S. Treasury (“U.S. Government Bonds”) as well as money market funds that invest exclusively in U.S. Government Bonds or repurchase agreements collateralized by such securities. U.S. Government Bonds have not historically had credit-related defaults, but there can be no assurance that they will avoid default in the future. 

Each Stone Ridge Longevity Income ETF is designed to support the option for members of its Modeled Cohort to continue to pursue substantially identical monthly distributions beyond age 80 by investing in a Closed-End Fund. However, the Closed-End Funds may not become available as intended. For example, the Adviser may determine that it is not appropriate to launch the Closed-End Funds if the Adviser believes there may not be a sufficiently diverse investor base, which is expected to be at least 100 shareholders. In the absence of a Closed-End Fund, investors may remain invested in the relevant ETF; alternatively, an investor may sell his or her shares, though investors may not have available to them an alternative investment option that provides the same level of distributions as they might have been able to receive if a Closed-End Fund were available. Shares of the ETFs may continue to be held by a shareholder’s beneficiary or may be sold at the then-current market price. However, a beneficiary of an ETF shareholder will not be eligible to invest in a corresponding Closed-End Fund unless the beneficiary is a member of the Modeled Cohort. The Closed-End Funds will be subject to different and additional risks as will be disclosed in the Closed-End Funds’ prospectuses. This is not an offer to sell or the solicitation of an offer to buy securities of the Closed-End Funds. A form of a Closed-End Fund’s prospectus (which is subject to revision) is included as Appendix A to each ETF’s prospectus. 

If made available, Closed-End Funds shares will be subject to additional risks, including: 

Closed-End Fund shares will not be listed for trading on any national securities exchange. There will be no secondary market for the shares and, because shares will be non-transferable, no secondary market in the shares will develop. 

Shareholders who die after the offering period for the relevant Closed-End Fund (the “Offering Period”) will not be entitled to transfer their shares or to receive the NAV of their shares. 

Shareholders who die after the Offering Period will have their shares cancelled for $0 following their death and will therefore lose all of their remaining investment in the Closed-End Fund. In order to achieve a positive return on an investment in a Closed-End Fund, a shareholder must live long enough to receive a total amount of distributions from the Closed-End Fund equal to the NAV per share of the Closed-End Fund at the time of investment, and the Closed-End Fund must continue to have sufficient assets to make its planned distributions during such shareholder’s lifetime. People with serious or life-threatening health problems should not invest in a Closed-End Fund. 

Closed-End Fund shares will not be insurance contracts or annuity contracts. Distributions provided by a Closed-End Fund will not be guaranteed or otherwise backed by an insurance company or by any third party. Shareholders will not have the protections of the state insurance laws, including the protection afforded by state guaranty funds. 

A Closed-End Fund may fail to make distributions through its planned liquidation date (the “Liquidation Date”). Under certain circumstances, including if the actual mortality rates experienced by shareholders are materially lower than the actuarial estimates, a Closed-End Fund may run out of assets prior to the Liquidation Date. The Fund is subject to the risk that the value of the securities in which it invests will decline due to general market or economic conditions. If, on any scheduled distribution date, the Fund has insufficient assets to make the planned distribution, the Fund will liquidate and distribute proceeds to its shareholders at the time of the liquidation, and there will be no further distributions. 

A significant portion of each Closed-End Fund distribution is expected and intended to constitute either a return of capital or capital gains, which will reduce the amount of capital available for investment and may reduce a shareholder’s tax basis in his or her shares. 

The ETFs are subject to risks related to exchange trading, including the following: 

Each ETF’s shares will be listed for trading on an exchange (the “Exchange”) and will be bought and sold on the secondary market at market prices.  Although it is expected that the market price of ETF shares will typically approximate the ETF’s net asset value (“NAV”), there may be times when the market price reflects a significant premium or discount to NAV. 

Although each ETF’s shares will be listed on the Exchange, it is possible that an active trading market may not be maintained. 

Shares of each ETF will be created and redeemed by a limited number of authorized participants (“Authorized Participants”).  ETF shares may trade at a greater premium or discount to NAV in the event that the Authorized Participants fail to fulfill creation or redemption orders on behalf of the ETF. 

Each ETF has a limited operating history for investors to evaluate, and new ETFs may not attract sufficient assets to achieve investment and trading efficiencies. 

For additional risks, please refer to the prospectus and statement of additional information. 

The information provided herein should not be construed in any way as tax, capital, accounting, legal or regulatory advice.  Investors should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.  Opinions expressed are subject to change at any time and are not guaranteed and should not be considered investment advice. 

The Stone Ridge Longevity ETFs are distributed by Foreside Financial Services, LLC.