Bridgewater Explains Risk Parity… Again

In Bridgewater Associates second research note on risk parity in the month of September alone, Ray Dalio and his crew felt the need to explain the concept once again following a 4.2 percent August loss using the strategy, which also fell in July. While other banks have explained the strategy, most clearly done by Credit Suisse and most notably done by JPMorgan, the Bridgewater research note attempts to clarify the firm’s unique implementation of risk parity, according to a memo reviewed by ValueWalk. [dalio] As the Fed fails to hike, central bank policy appears as one catalyst to negative performance…