Episode 270: Ergodicity In Investing And Life, A Listener's Golden Ratio Portfolio, Dividend Truths And Portfolio Reviews As Of June 23, 2023
Risk Parity Radio
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The Importance of Ergodicity in Portfolio Construction and Financial Planning
Author and consultant Luca Delana talks with Econ Talk host Russ Roberts about the importance of avoiding ruin when facing risk. Along the way, Delana makes understandable the arcane concept of ergodicity in everyday life. In an ergodic system, the performance or outcome of any individual is likely to match up with the average or be close to it. For instance, if you have a bunch of people all flipping a coin a hundred times, they're likely to all get similar outcomes. This also relates to the work of Naseem Taleb and others.
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