"Navigating such unpredictability requires investors to rely less on historical short cuts and,…"

Tuesday, January 10th, 2012 at 9:10 am

“Navigating such unpredictability requires investors to rely less on historical short cuts and, instead, spend more time decomposing asset classes into their constituent risk factors. Moreover, they need to internalize a much broader set of correlations, pursue a more global opportunity set, and mitigate risk not only by diversifying but also by using active tail hedging aimed at protecting against the bad extremes of possible outcomes.”

Mohamed El-Erian: Investing in a ‘Fat Tail’ World – WSJ.com