Volatility Reminds Us to Hedge – There May Be a Better Way to Do That
Many investment managers and asset owners are struggling with a new reality and working to restructure portfolios, all while trying to shrug off a 10-year bull market euphoria-induced hangover. For the last decade, it seemed like the U.S. equities market knew no limits, with active managers struggling to even come close to meeting their benchmarks. Allocations to alternatives became less of a concern with each passing stock market record. Strong economic fundamentals – record low unemployment, wage growth, strong housing markets – continued to boost certainty that the party was not ending anytime soon.
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