‘Tail Risk’ Hedging Irrational to Bernstein: Chart of the Day
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Investors seeking to avoid losses are better off spreading around their money than buying assets that are supposed to protect against the risk of highly unusual events, according to Richard Bernstein, chief executive officer of an investment firm bearing his name.
“Today’s concerns regarding the need to hedge ‘tail risk’” are irrational, Bernstein wrote in a July 7 report. Paying to minimize this threat doesn’t make as much sense as diversifying, he added.