An absolutely horrible, terrible, no good month for investors of any stripe: stocks falling steadily, bonds in free fall, inflation high and rising. But if there is a bright side for RP, it’s that it did less badly than others, with RP portfolios occupying the top 4 spots for the month and overall.
A pillar of Risk Parity portfolios, Long-term Treasury Bonds provide positive expected return, some income, and most importantly, negative correlation with equity funds. To invest in them, I use low-cost, no-frills VGLT, though alternatives such as TLT and EDV are also great choices.
Obviously, I am fully onboard with Risk Parity, but I do have some lingering doubts, if I may be honest. Since the goal with this blog is to research, test, and share insights about Risk Parity, I thought it best to be upfront about questions I have as I go deeper into the rabbit hole…
Not exactly RP, but adjacent to it. This is an industry white paper about one way to use leveraged funds to free up space in the portfolios to make them more balanced. Authors are influenced by Risk Parity principles, and provide ideas for implementation, even though they call it something else.
