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Infographic: Market Risk Insights, Q2 2018

Dickensian conditions

 Q2 2018

Risk is amorphous, creating investment opportunities and threats to capital at each stage of the cycle.

In response, investors must watch for familiar patterns and new disruptions amid streams of financial indicators.

Models based on statistical history can serve as useful, if inexact, guides. But we need to use all the tools at hand, going beyond number crunching to consider geopolitical tensions and sustainability concerns, to separate meaningful signals from the noise.

We recommend tracking the following six indicators to recognise risk in its current form – and identify where opportunities lie.

 

 In conclusion

The first quarter of 2018 was characterised by turbulence: it was the best and worst of times. While we can never know the true distribution of asset returns and gauge risk with 100% accuracy, our metrics increasingly indicate downside risk in the coming quarter, warranting a note of caution.

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Sales Contacts

Carlos Capela CFA, CAIA, Director - Business Development Iberia