We divide market risks into two categories: foreseeable riskssuch as growing inflation or election results, and unforeseeable risks, i.e. unexpected events that surprise the markets. The latter are also known as black swans. The outbreak of the Covid-19 pandemic in 2020 was one such unpredictable risk. But other events such as large-scale cyber attacks or terrorist attacks and natural disasters also fall into this category. How can investors protect themselves against foreseeable and unforeseeable risks?
Focus: inflation and growth
With central banks aggressively raising interest rates to combat persistently high inflation, we see a risk that the economy could weaken or even contract. The consequence is higher risk premiums across the board. We think portfolios need to be more targeted and flexible in this volatile market environment. In our view, there is every reason to take a broad view of the market in order to strengthen portfolio resilience.
Build robust portfolios
Investors may be better able to manage the downside risk that can arise from a variety of adverse conditions by understanding the general resilience optimize their portfolios. Resilient portfolios take measured risk that accounts for uncertainty, pay attention to diversification, and adapt to changing market conditions over the long term.
Explore the suggestions we’ve put together for you in the tabs below and learn how to make your portfolio more resilient – with stocks, bonds and commodities.
Risk Warnings
capital risk. The value of investments and the income from them can go down as well as up and are not guaranteed. Investors may not get back the amount originally invested. Past performance is not a reliable indicator of current or future results and should not be the only factor considered when selecting a product or strategy. Changes in exchange rates between currencies may cause the value of investments to go down as well as up. For funds with higher volatility, fluctuations can be particularly pronounced and the value of an investment can fall suddenly and significantly. Tax rates and the basis for taxation may change from time to time.
Legal Information
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