Why Beta Is a Flawed Measure of Real Portfolio Risk

Lucas and Luna challenge the investing industry's obsession with beta as the gold standard for risk. They break down where beta fails — using the 2022 bond rout, when long-duration Treasuries had low beta but lost 30 percent of their value. The hosts then unpack three more useful risk measures: maximum drawdown, downside deviation, and value at risk. They walk through a concrete example: a retiree in 2022 who held a 'low beta' portfolio of bonds and defensive stocks still got crushed because beta ignored interest-rate sensitivity. The episode also touches on how factor-based investing and risk parity strategies offer a richer picture. By the end, listeners understand why a single Greek letter doesn't capture the risks that actually keep them up at night — and how to think about building a portfolio that survives real-world shocks, not just a regression line. #Beta #PortfolioRisk #Drawdown #DownsideDeviation #ValueAtRisk #FactorInvesting #RiskParity #BondRout #2022Markets #InterestRateRisk #ModernPortfolioTheory #Finance #WealthBuilding #Investing #FexingoBusiness #BusinessPodcast #LongTermStrategy #RiskManagement Keep every episode free: buymeacoffee.com/fexingo