One of Bridgewater’s greatest successes had been the development of “risk parity” investment techniques. The evidence-based principle on which it rests is that relatively safe assets often provide higher returns than are appropriate for their level of risk, while riskier assets are relatively overpriced and return less than they should. Investors can therefore improve their results by leveraging low-risk assets, buying them with some borrowed money, so as to increase their risk and return,
