Episode 7: How To Construct A Risk Parity Style Portfolio From Basic Principles
Risk Parity Radio
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How to Implement the Do-It-Yourself Risk Parity Principles
The simplicity principle means that you are better off not overdoing it with the number of funds and the number of asset classes in your portfolio. The Holy Grail principle says we need to look for maximum diversification. We need to find asset classes that have zero or negative correlations as our primary building blocks. And finally, the simplicity principle says we shouldn't use more funds than we have to in order to meet our goals.
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