The Benefits of a Risk Parity Portfolio

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A risk parity portfolio does not mean your portfolio will always be in the black, does it? No. Sometimes the non-correlated assets can't save a portfolio from taking on losses. The golden butterfly had down years in about 10 of those instances, so less than 20% and that its longest time to recover was three or four years. A 60-40 portfolio was down 28% of the time in the same time period,. That was worse. Longest time to recover for that portfolio was over 12 years, which is very undesirable when you're drawing down on a portfolio.

In this episode we answer emails from Lauren, Paul and MyContactInfo. We discuss Emerson and Thoreau and how we apply their teachings, comparing risk parity style portfolios with others using Portfolio Charts, and an article about Bill Bernstein's new bond ladder and how it fits in.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio.

Additional links:

Self Reliance by Emerson: Self Reliance by Ralph Waldo Emerson (Full Text) (thefreshreads.com)

A Guide to Self Reliance: Self-Reliance: Change Your Life For The Better - Ralph Waldo Emerson (emersoncentral.com)

Parable of the Ham: The Parable of the Ham – Results Typical

Golden Butterfly Portfolio Particulars: Golden Butterfly – Portfolio Charts

60/40 Portfolio Particulars: Classic 60-40 – Portfolio Charts

Three-Fund Portfolio Particulars: Three-Fund Portfolio – Portfolio Charts

Risk-Reward Comparisons of Common Portfolios: RISK AND RETURN – Portfolio Charts

2022 Comparisons of Common Portfolios: Learning the Hard Way: 2022 Portfolio Rankings – Portfolio Charts

Bill Bernstein Article about his new Bond Ladder: Riskless at Age 104 - Articles - Advisor Perspectives