Absolute return funds and turbulent markets

In this time of increasing turbulence, how can investors learn from the lessons of the past and be prepared for any further chaos? Absolute return funds offer one way to adopt a defensive stance

The period of stable interest rates, declining inflation and above-trend economic growth, which has reigned in most of the industrialised world for nearly two decades, was given a name in 2004 by Ben Bernanke, the current chairman of the Federal Reserve. He called it 'The Great Moderation'. In the financial markets, it seemed that periodic crises - such as the Mexican default of 1994/5, the LTCM failure of 1998, the Nasdaq bubble and its aftermath, and the 11 September terrorist attacks - had been overcome, after interventions from central banks, without undue damage to the real economy. ...