Very interesting discussion from Mohamed A. El-Erian, who gives these three bulleted lessons investors should be learning from the current shift in volatility:
1. Long periods of market calm create the technical conditions for violent air pockets.
2. Crowded trades can be a lot more unstable than most investors expect.
3. During market turmoil, investor differentiation gives way to indiscriminate action.
Go read the entire thing . . .
Three Lessons for Investors in Turbulent Markets
By Mohamed A. El-Erian
Bloomberg View, February 7, 2018