Stock market crash: Hedge fund strategy fails, could change investing - Business Insider

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A popular trading strategy that preserves hedge funds during stock-market crashes just failed — and Morgan Stanley warns it could change investing as we know it

successfully cushioned the blow to portfolios. In practice, it employs leverage to spread investment risk across various asset classes based on their levels of volatility.

The strategy was particularly effective in the 15 months leading up to Wednesday March 11, the final day of the longest These three benefits were so attractive that Morgan Stanley's US equities chief Mike Wilson described them as "risk parity nirvana." As stocks fell early on Wednesday, bonds initially rose, but eventually caved and sent yields higher amid the widespread virus panic. The anomaly of these simultaneous moves — falling stock prices and rising yields — is illustrated in the chart below.

 

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Because you are thinking the traditional way ie everybody follow the rules but in reality one big player is not. They control their stock market and do whatever they want. Everyone lost except them! All analysis or predictions are garbage!

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