Worth re-emphasizing: today's market is only one of many possibilities. Most portfolios are not balanced such that they will perform well in all such scenarios.
https://twitter.com/ReformedTrader/status/1321335899666272257
There a very large value dislocation now that has benefited expensive stocks rather than the ones that have historically performed better.
If that turns around (AND is coupled with a new macro environment), a lot of portfolios could be caught off-guard.
If that turns around (AND is coupled with a new macro environment), a lot of portfolios could be caught off-guard.
https://twitter.com/ReformedTrader/status/1259165422412128259
Financial advisors, relatives, and media pundits talk about inflation and deflation, but are they positioning their portfolios to do well if those things happen?
Most have only seen one kind of market and are unable/unwilling to think differently. Do your own research!
Most have only seen one kind of market and are unable/unwilling to think differently. Do your own research!
BTW: An objection to risk parity that I hear a lot is that stock and bond valuations are very high. That involves an implicit assumption that value works, so it makes sense to add it as a factor tilt.
The same goes for commodities' contango drag and a carry factor tilt.
The same goes for commodities' contango drag and a carry factor tilt.
On the other hand, if you don't believe factors still work, risk parity seems like the best starting point: diversify as much as possible without the factor overlay.
Leverage depends on how the strategy is built: for example, RPAR doesn't use very much.
etf.com/RPAR#overview
Leverage depends on how the strategy is built: for example, RPAR doesn't use very much.
etf.com/RPAR#overview
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