Risk Parity Radio Episode 55: Mailbag With Jason And Part One Of An Analysis Of Managed Futures Fund DBMF
Feb 11, 2021
AI Snips
Chapters
Transcript
Episode notes
Use SHY To Reduce Portfolio Volatility
- Consider a modified Golden Ratio portfolio substituting SHY for REITs and cash to lower volatility.
- Run analyses (e.g., Portfolio Visualizer) before using it as collateral and avoid highly volatile stock subcomponents.
Don't Use Leveraged Funds As Collateral
- Avoid using highly leveraged ETF blends as collateral because maintenance requirements and volatility raise margin call risk.
- Prefer conservative allocations for collateral that will reliably outpace low-cost margin rates.
Separate Cash Emergency Fund From Intermediate Savings
- Keep a small cash emergency fund and use a separate intermediate-term portfolio for 3–5 year needs.
- Use a risk-parity style intermediate portfolio (e.g., Golden Ratio) for planned medium-term expenses.