3min chapter

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Episode 246: Risk Parity ETFs, Leverage, Alternatives, Podcasts and Ohio!

Risk Parity Radio

CHAPTER

The Leverage Ratio Is 1.6 to 1

The S&P 500 and treasury bonds levered up 1.5 to 1 which is actually designed for long-term holding. But as you've observed some of these funds that were designed for short-term trading like UPRO and TMF can also be used. The optimal amount of leverage seems to be somewhere about 1.6 or 1.7 to 1 by the way. All of this is relatively new but it is a good feature I think for do-it-yourself investors if it's not misused.

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