Adam and Pierre focus their discussion on diversification as a combination of "diversity" and "balance". Diversity is about holding investments that are designed to thrive in very different market environments, and for different reasons. Balance has the objective of ensuring that investments are all able to express their unique personalities. Risk parity is the ultimate expression of diversification. Sadly, many investors are misguided about the concept, and focus on the wrong things. We drill to the heart of the idea and illuminate why a risk parity portfolio should be the starting place for most investors.

For those of you who don't know it, Adam Butler and his partners, Mike Philbrick and Rodrigo Gordillo are among North America's small community of rising authorities on on the subject of quantitative investing, risk parity, and adaptive asset allocation.