Chapter 8Conclusion: Strategies for Navigating Volatile Markets

Previous chapters have painted a complex picture. Financial domino effects are complex because they intertwine between different variables, players, economies, and social systems. Complexity is what investors are facing when they navigate financial markets in an age of austerity. Unlike the age of the “great moderation,” where leverage drove risk premiums to the narrowest ever seen and volatility to the lowest ever witnessed, the financial crisis changed this not just by one cataclysmic event but by many domino effects that took place in the aftermath. The great moderation was perhaps known as an era ex-domino effects, an era of low, compressed volatility. Although not entirely as ...

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