The dismal performance of equities over the past 10 years, coupled with strong performance in the bond markets, has left investors grasping for a new approach to allocate assets. For some managers and consultants, Risk Parity is that new approach.

But for those of us who grew up with Modern Portfolio Theory (MPT) and its "Efficient Frontiers," the Risk Parity philosophy may sound like heresy.   

A provocative new white paper by Federal Street Principal Mark Peters examines the Risk Parity approach, why some proponents are selling it so bullishly, and why Federal Street Advisors is not.