Over the past five years, investors have learned, sometimes from bitter personal experience, that markets have become increasingly unpredictable. Even three years ago, sovereign risk was barely considered by investors. Now it is a major focus.
From Lehman Brothers to Greece, a series of crises have forced investors to ask themselves some searing questions about their appetite for risk in sideways markets. These raise fundamental issues about investment behaviour – is it possible to hedge against growing uncertainty, by either minimising the loss or even to invest in a way in which they can benefit from chaotic situations?
