...in which I explain the motivation to undertake this blog: to research, test, and share insights about Risk Parity investing. And a disclaimer at the end!
After years of thinking about it, I started this project to accomplish three things:
1) I want to research the world of Risk Parity. I’ve been fascinated in my pursuit of understanding RP, and have achieved some measure of confidence with the topic, though there is still much out there to pursue. I find the subject matter interesting in its own terms, so I don’t look at it as work, but I did want to create a project that would cause me to not just look at things in dribs and drabs, but instead in a focused, purposeful way. Sometimes the concepts of Risk Parity are challenging for me (plain English: my upper level math skills ain't so good!), but I did want to try to understand that aspect of RP.
2) I want to test what I’ve learned. Since I’m years away from my earliest possible retirement date at which time I might need to live off my investments, I wanted to put these insights into practice in a systematic way. True, there isn’t as much skin in the game since I’m not actually doing the tests with my retirement nest egg (though I do own the assets I am testing in various amounts), but I do look at it as preparation for the real thing. I am thus applying a realistic and consistent set of rules governing withdrawals from each portfolio, so that I can get a sense of how they’ll perform. Think of this part like a flight simulator before you fly the plane itself - definitely not the same as being in the air, but still valuable training.
3) I want to share what I have learned both from the research and the simulation. I’m a teacher by trade, and by nature, so this project is my way of helping others, if they are interested in the topic, as well. I am inspired by Frank Vasquez who calls his Risk Parity Radio project a “labor of love.” I, too, see this as a contribution, and if not, well, I guess you get what you pay for! I know that this is a niche topic, but I truly believe it’s an interesting and important one, and so part of the project is making that niche a little bit bigger and more accessible.
Hi, I’m Justin. I’m in my late-40s, married, with two wonderful kids and a funny rescue dog named Lego. Originally from California, I now live in Japan, where I have now lived for almost two decades. In my day job, I teach at an international school, and one of my classes is a personal finance course. I also have a side gig teaching an investments course at the high school level. In 2020, I completed a certificate in financial planning from Bryant University, with the thought of a second career as a Certified Financial Planner, though that proved impractical.
I write this blog from the perspective of someone who is knowledgeable about investing, and enough so to know there is much more to learn. While I am definitely no professional, I do hope that what I am experienced with - learning and teaching others - will come through and that I can explain and convey sophisticated topics in an accessible way. For years, my colleagues have heard about my class teaching investments and followed with, “I wish I had that class now,” so this in a way is my attempt to help educate all on this one aspect of investing.
Financial Education, not Advice
Ahh, now time for my favorite part of financial blogs and podcasts, the disclaimer...
This blog is intended for financial education only, and should not be considered professional advice. It is general in nature and is not addressed to you or your particular financial, investing, tax, or accounting situation. Readers should understand that before acting on anything mentioned here, they should seek proper advice from a recognized financial professional, such as one registered as a Certified Financial Planner, Registered Investment Advisor, Chartered Financial Analyst, or other, similar designation.
I will do my best to provide accurate and up-to-date information, but cannot guarantee the accuracy or completeness of sources I might link to or mention and accept no responsibility for their content or their privacy policies.