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Are You Measuring Portfolio Risk Effectively with Aaron Klein of Riskalyze
Can you get a true understanding of a client's risk tolerance and place them in a portfolio with the appropriate portfolio risk by asking a few simple subjective questions? Robo Advisors Betterment (see my interview with Betterment founder Jon Stein) and Wealthfront believe they can but today's guest, Aaron Klein, co-founder of Riskalyze, believes those firms have it all wrong.
Aaron's firm tackles the risk tolerance and portfolio risk challenge from a different angle by utilizing concepts borrowed from Prospect Theory. Prospect Theory was developed by Daniel Kahneman and Amos Tversky and…
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