%0 Journal Article %A Eric H. Sorensen %A Nicholas F. Alonso %T The Resale Value of Risk-Parity Equity Portfolios %D 2015 %R 10.3905/jpm.2015.41.2.023 %J The Journal of Portfolio Management %P 23-32 %V 41 %N 2 %X This article examines the application of risk parity to fully diversify an equity portfolio. It presents wealth accumulation in a stochastic dominance framework, tested over increasing investment horizons. The portfolio construction algorithms consider sector, country, and stocks in achieving an alternative to capitalization-weighted approaches. Risk parity is dominant over 75% of the historical periods for any two-year horizon and is dominant in all cases after six-year horizons. It achieves dominance over capitalization-weighted indices over shorter horizons during periods of higher market volatility, periods of higher inflation, and periods with steep yield curves.TOPICS: Equity portfolio management, commodities, analysis of individual factors/risk premia %U https://jpm.pm-research.com/content/iijpormgmt/41/2/23.full.pdf