Risk Parity Radio

Episode 7: How To Construct A Risk Parity Style Portfolio From Basic Principles

63 snips

Aug 13, 2020

Discover how do-it-yourself investors can build risk-parity portfolios, from pairing assets with low or negative correlations to choosing broad macro allocations. The discussion explores portfolio simplicity, correlation tools, potential building blocks like stocks, Treasuries, gold, and commodities, and how to compare portfolios and withdrawal rates.

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ADVICE

DIY Risk Parity

Implement Risk Parity principles in your own retirement or drawdown portfolio.
Consider how professionals construct and manage these portfolios.

INSIGHT

Varied Approaches

Professional Risk Parity portfolios vary in strategy and results.
Some are conservative, others aggressive, leading to diverse outcomes.

ANECDOTE

March Drawdowns

Many Risk Parity portfolios saw a maximum drawdown of 17-20% in March.
Wealthfront's version, however, dropped over 42% due to complex strategies.

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