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Episode 392: Small Cap Value Indexes, Managed Futures Butterly, And A Mini-Rant On Bucketeering

Risk Parity Radio

CHAPTER

The Myth of Bucketing in Asset Allocation

This chapter critiques the common asset allocation strategy known as 'bucketing,' arguing that it serves more as a psychological tool than an effective performance enhancer. The discussion addresses misconceptions about sequence of returns risk and emphasizes the importance of understanding withdrawal rates over oversimplified financial models. The speaker also highlights the potential pitfalls of excessive cash storage in portfolios, ultimately advocating for a deeper grasp of investment strategies rather than following superficial tactics.

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