Markets regularly have periods of falling prices, but financial professionals seem to focus on the upside, directing relatively little effort towards spotting the next crisis. Press coverage seems short-term, with negative market events rapidly forgotten. Discussions with portfolio managers and intermediaries tend to concentrate on the positives and often the potential for downward market moves can seem neglected.
Quintin explores why markets can be prone to crises, suggesting that as well as being alert to the dangers, managers should be discussing the potential for market crises with their clients. He suggests that stress-testing portfolios against such events may help address weaknesses to make portfolios more robust.
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Q G Rayer (2017), Spotting the next crisis: is it time for managers to pay more attention, Citywire Wealth Manager, issue 393, p18, 6 April 2017.