In this episode, Corey Hoffstein from Newfound Research, and Rodrigo Gordillo and Adam Butler of Resolve Asset Management Global, discuss the concept of return stacking and its implications for investors. They delve into the challenges of beating the large cap U.S. equities market, the shift in conversations about return stacking from risk management to creating excess returns, and the potential of diversification in generating consistent positive excess returns.

Topics Discussed

• The difficulties of beating the large cap U.S. equities market and the need for diversification

• The shift in conversations about return stacking from risk management to creating excess returns

• The potential of diversification in generating consistent positive excess returns

• The idea of dictum in the markets and the difference between behavioral time and statistical time

• The concept of risk parity and the importance of maintaining balance in portfolio risk

• The role of trend following in risk management and return stacking

• The potential of stacking strategies in enhancing portfolio returns

• The structural challenges in implementing return stacked strategies in portfolios

• The importance of diversification in ensuring investment success

This episode provides valuable insights into the concept of return stacking and its potential in enhancing portfolio returns. It is a must-listen for investors interested in diversification strategies and the future of investment management.

(0:00) Introduction and discussion on investment strategies (2:03) Sponsor: Returnstack.com (6:36) The challenges and constraints of active management in top-weighted markets (14:18) Analysis of 20 years performance of large cap US funds and questioning the efficiency of large cap US equities (18:30) Introduction to return stacking as a strategy to outperform benchmarks (25:06) Discussion on the differences between stacking alternatives vs active stock picking and understanding active risk budget (29:20) All-weather and all-terrain investing: Balancing optimality and insights into the development of all-terrain portfolios (40:35) The role of trend in diversification, risk parity and all-terrain portfolios with real-world examples (49:05) Discussing risk parity for long-term portfolios and global carry performance during equity bear markets (1:00:38) The importance of diversification in return stack strategies and the structural challenges in adopting them (1:06:44) The potential business benefits for advisors utilizing return stack strategies and reflections on market recovery (1:11:02) Focus on success measures outside of market performance and potential future guests and discussion topics