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Evidence of the benefits of diversification

Modern portfolio theory. Lets look at the risk and return figures for 3 asset allocations since 1972. 1. 100% S&P 500 2. 60% S&P500 & 40% 10 Year US Govt Bonds 3. 20% S&P500, 20% Foreign Stocks (MSCI EAFE), 20% 10-Yr US Govt Bonds, 20%…

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Risk Parity

Let’s take a look at a way to practically implement risk-parity in a portfolio. A traditional 60/40 mix of stocks and bonds can be leveraged one of three ways. First, through a traditional margin account with the investor being charged the broker call rate +…

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Intro Reading

Three white papers by Bridgewater and PanAgora to introduce the blog and the topics of post modern portfolio theory and risk-parity… "Engineering Targeted Returns and Risks" – Bwater "The Biggest Mistake In Investing" – Bwater "Risk Parity Portfolios" – PanAgora

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