How to Build a Risk Parity Portfolio

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Roxanne Jones: What we're trying to do here is try to achieve higher, safe withdrawal rates. When the stocks are performing well, say in a period like from 2010 to 2020, this kind of portfolio will underperform a portfolio that has more equities than it just will. She says when presented with materials from an expert your reaction should be to absorb what is useful, discard what is useless, and add something that is uniquely your own.Jones: I drink your milkshake.

In this episode we answer an email from Judy. We discuss a 2013 Michael Kitces article about risk parity, which aspects we have incorporated and which we have not (and why), and then talk about an interview of William Bernstein about his new book and some related thoughts and ramifications about bonds, crystal balls, annuities and other things. (Note: I think I said it was the 4th edition, but its really just the 2d.)

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:

2013 Michael Kitces Risk Parity Article: Microsoft Word - Kitces Report November-December 2013 - RISK PARITY - FINAL

Morningstar Long View Interview of William Bernstein: Bill Bernstein: Revisiting The Four Pillars of Investing | Morningstar

Morningstar Long View Interview of Aswath Damodaran: Aswath Damodaran: A Valuation Expert’s Take on Inflation, Stock Buybacks, ESG, and More | Morningstar

Factor Investing Book: Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today by Andrew L Berkin | Goodreads

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