Asset Allocator's Soapbox: Oscillating wildly

Market oscillations since the start of 2009 have forced risk management back to the heart of investment. Many investors still choose to use models that rely on historic data, based on past economic and business cycles (some as far as back as 20 years), to assess future risk. If anything, recent events have reinforced our view that history carries some serious limitations in directing portfolio management today. Indeed, at the turn of the century, think how inconceivable it was that the BRICs would be the next economic powerhouses; that the ‘risk-free’ asset would become a misnomer; that ...