Posted inPortfolio Management

Risk Parity Investing Explained

A complete guide to risk parity investing — how it works, the math behind equal risk contribution, leverage's role, the classic 60/40 problem it addresses, historical performance during 2022, and its risks and limitations.
Posted inPortfolio Management

Portfolio Rebalancing Strategies

A complete guide to portfolio rebalancing strategies — calendar-based, threshold-based, and hybrid rebalancing, the volatility-harvesting math behind rebalancing, tax and cost considerations, and how to choose a rebalancing policy.
Posted inPortfolio Management

Value at Risk (VaR) Explained

A complete guide to Value at Risk (VaR) — how it's calculated using historical, parametric, and Monte Carlo methods, worked examples, Conditional VaR, limitations exposed by the 2008 crisis, and how it compares to maximum drawdown.
Posted inPortfolio Management

Sortino Ratio vs Sharpe Ratio

A head-to-head guide to the Sortino ratio vs the Sharpe ratio — formulas, worked side-by-side examples, when each metric gives a different verdict, which to use for which strategies, and their shared limitations.