Target high returns and greater consistency with this insightful guide from a leading investor
The market volatility exacerbated by the COVID-19 pandemic has led many to question their exposure to risk in their own portfolios. But what should one do about it?
In Risk Parity: How to Invest for All Market Environments, accomplished investment consultant Alex Shahidi delivers a powerful approach to portfolio management that reduces the potential for significant capital loss while maintaining an attractive expected return.
The book focuses on allocating capital amongst four diverse asset classes: equities, commodities, Treasury bonds, and Treasury Inflation Protected Securities. You’ll learn about:
- The nature of risk and why traditional approaches to risk management unnecessarily give up potential returns or inadequately protect against catastrophic market events
- Why proper risk management is more important now than ever
- How to efficiently implement a risk parity approach
Perfect for both individual and professional investors, Risk Parity is a must-have resource for anyone seeking to increase consistency in their portfolio by building a truly balanced asset allocation.
Table of Contents
Foreword ix
Preface xi
Acknowledgments xiii
About the Author xv
Introduction xvii
Chapter 1 What Is Risk Parity? 1
Chapter 2 Two Steps to Build a Well-Balanced Portfolio 11
Chapter 3 Equities 21
Chapter 4 Treasuries 35
Chapter 5 TIPS 51
Chapter 6 Commodities 63
Chapter 7 Other Asset Classes 75
Chapter 8 Risk Parity Portfolio Summary 89
Chapter 9 Risk Parity Portfolio Historical Returns 99
Chapter 10 The Timeliness of Risk Parity 115
Chapter 11 The Rebalancing Boost 129
Chapter 12 Efficient Implementation 135
Chapter 13 When Does Risk Parity Underperform? 143
Chapter 14 FAQs 155
Chapter 15 Conclusion 173
Index 175
