Do You Know What Diversification Means?

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Diversification does not mean different in portfolio construction. It's like going to the supermarket and just throwing things in your cart because they look different. You want to create a meal that's going to have specific ingredients that work together. There's also this idea that diversification is valuable in unto itself. The only purpose of it is to reduce the overall volatility in your portfolio.

In this episode we answer emails from Dan, Chas and Sam. We discuss some aspects of a new Risk Parity book, the poor performance and problems with TIPs, sub-portfolio constructions, using a correlation analysis to determine which non-U.S. funds to use, which bond funds to use, why you shouldn't pay attention to proposed legislation, more on international funds and how to find the podcast where your email is answered.

And THEN we our go through our weekly portfolio reviews of the seven sample portfolios you can find at Portfolios | Risk Parity Radio. We also review the lackluster annual performances of RPAR and other professional risk-parity style funds. Note that RPAR is run by the author of the book discussed in answer to the first question.

Additional links:

Father McKenna Center Donation Page: Donate - Father McKenna Center

Commodity Producers ETFs list: Commodity Producers Equities ETFs (etfdb.com)

Original RPAR Episode: Podcast #31| Risk Parity Radio

Correlation Analysis of Chas's Proposed Funds: Asset Correlations (portfoliovisualizer.com)

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