Michael Philbrick, Adam Butler, and Rodrigo Gordillo - It's About Risk Allocation, Not Capital Allocation | #17
Episode 17 starts with the guys from ReSolve discussing how they view asset allocation and top-down investing. They start with the global market portfolio which is the aggregate of what every investor in the world owns, yet interestingly, nearly no individual investor allocates this way. They then adjust the global market portfolio by striving for balance, specifically, risk parity.
Key Points
- Resolve Asset Management emphasizes the importance of asset allocation in determining long-term portfolio outcomes, advocating for a global, diversified approach that adapts to different economic environments.
- The firm utilizes a dynamic strategy that includes risk parity and adaptive asset allocation, leveraging global ETFs to balance risk and capitalize on momentum within the market.
- Resolve views leveraging in portfolio construction as a means to scale risk, aligning with the capital market line to target specific volatility levels and optimize returns.
Resources: Free Resources ReSolve Asset Management Risk Parity Education Portal GestaltU Research Blog
White Papers
Risk Parity Solution Brief The Importance of Asset Allocation vs. Security Selection Adaptive Asset Allocation – Butler, Philbrick, and Gordillo
Other
Trading Front “The Asset Allocation Debate” – Vanguard ETFs May Actually Make Weak Players Weaker – Econompic Data This IS the Global Market Portfolio – Faber
Running Segment: “Things I find beautiful, useful or downright magical”:
ReSolve – Bose QuietComfort Headphones, Natural Reader, and Open Source Programming Meb – Japanese TOTO Washlet
Chapters
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| 57:30 |
Transcript
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