Risk Parity: A Winning Strategy or Capital Market Heresy?

The authors discuss the Risk Parity approach to investing -  equalizing risk by allocating funds to a wider range of categories such as stocks, government bonds, credit-related securities and inflation hedges (including real assets, commodities, real estate and inflation-protected bonds) while maximizing gains through financial leveraging.

The paper includes the differences in this approach from Modern Portfolio Theory, the risks involved and who typically uses this approach.