Know When to Hold’em, Know When to Fold’em

BLOG SERIES: RISK PARITY

In the second installment of this blog series on risk parity, we are going to dive into how dynamically adjusting the leverage applied to the strategy can result in increased stability of the portfolio’s return profile. Actively adjusting the amount of leverage applied to the portfolio is how the strategy scales the size of its bets based on changes in market risk.

ESG’s Internal Scorecard

Environmental, social, and governance (ESG) metrics for publicly traded companies has become one of the fastest growing movements in the investment management industry. The expectation is that companies who implement strong ESG metrics will become more profitable and valuable over time by improving the interests of society, which should provide investors in these companies with…

The Game Has Changed

It’s likely safe to classify 2020 as a year that has defied expectations and predictions. Led by COVID-19, the real economy and financial markets have felt the wrath of the pandemic. Since March however, there has been a disconnect between the stock market and “main street,” as the real economy continues to sputter while equity…

Is the 60/40 Portfolio Dead?

Over the last decade, there have been many proclamations that the traditional 60/40 portfolio is dead, mainly due to the fact that bonds were supposedly overvalued and yields couldn’t go any lower. This article from Ben Carlson highlights that while a 60/40 portfolio has delivered outstanding returns as a result of falling real interest rates…

The Impacts of Risk Parity Strategies

Ray Dalio’s Bridgewater is the latest celebrity investment management firm to opine that in a low-interest rate environment government bonds not only offer little in the way of value for investors, but that their ability to provide risk reduction during financial stress will be impaired as well. As this article from Bloomberg reports, Bridgewater is…