Risk Parity Radio

Episode 27: What About Utilities As An Allocation In A Risk-Parity Style Portfolio?

Oct 29, 2020

26:04

In this episode, which is a follow-up to Episode 25, we analyze as an investment in utilities for a risk-parity style portfolio using David Stein's 10 Questions to Master Investing, which are:

1. What is it?
2. Is it an investment, a speculation, or a gamble?
3. What is the upside?
4. What is the downside?
5. Who is on the other side of the trade?
6. What is the investment vehicle?
7. What does it take to be successful?
8. Who is getting a cut?
9. How does it impact your portfolio?
10. Should you invest?

Links and References:

Optimal Finance Daily Podcast Episode 1329: https://oldpodcast.com/1329-is-value-investing-dead-by-vitaliy-katsenelson-of-contrarian-edge-on-growth-stocks-fang/

Fi-Lexible Webinar (scheduled for Nov 1, 2020): https://www.eventbrite.com/e/free-webinar-are-you-fi-lexible-tickets-125036815481

Episode 7 re the Three Principles: https://www.riskparityradio.com/podcast/episode/4ec882cb/episode-7-how-to-construct-a-risk-parity-style-portfolio-from-basic-principles

Correlation Matrix for Utility ETFs: https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VTSAX%2C+TLT%2C+GLD%2C+VNQ%2C+XLU%2C+VPU%2C+FUTY%2C+IDU&timePeriod=2&tradingDays=60&months=36

Portfolio Visualizer Backtest of Portfolios with REITs and Utilities: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTI&allocation1_1=42&allocation1_2=42&allocation1_3=42&symbol2=TLT&allocation2_1=26&allocation2_2=26&allocation2_3=26&symbol3=GLD&allocation3_1=16&allocation3_2=16&allocation3_3=16&symbol4=XLU&allocation4_1=10&allocation4_3=5&symbol5=VGSIX&allocation5_2=10&allocation5_3=5&symbol6=CASHX&allocation6_1=6&allocation6_2=6&allocation6_3=6