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

<p>In this episode we discuss how professionals construct risk-parity style portfolios, what are the basic principles for the do-it-yourself investor, and how to implement them.  The three basic principles are (1) the Holy Grail Principle; (2) the Macro-Allocation Principle; and (3) the Simplicity Principle.<br/><br/>Here are the links mentioned in the episode:<br/><br/>March draw-downs for professional risk-parity style portfolios: <a href='https://www.markovprocesses.com/blog/risk-parity-funds-in-the-coronavirus-market-rout/'>https://www.markovprocesses.com/blog/risk-parity-funds-in-the-coronavirus-market-rout/</a><br/><br/>Ray Dalio explains the Holy Grail principle of risk-parity style investing: <a href='https://www.youtube.com/watch?v=Nu4lHaSh7D4'>https://www.youtube.com/watch?v=Nu4lHaSh7D4</a><br/><br/>Ray Dalio reveals the most basic components of most risk-parity style portfolios:<br/><a href='https://www.youtube.com/watch?v=KA7U8xT_2Dk'>https://www.youtube.com/watch?v=KA7U8xT_2Dk</a><br/><br/>Portfolio Visualizer Asset Correlation Calculator:  <a href='https://www.portfoliovisualizer.com/asset-correlations'>https://www.portfoliovisualizer.com/asset-correlations</a><br/><br/>Portfolio Charts Master Portfolio Analyzer:  <a href='https://portfoliocharts.com/portfolios/'>https://portfoliocharts.com/portfolios/</a><br/><br/></p>