Tail Risks and Protecting Against the Unknown

Investors are challenged to mitigate the impact of a variety of risks, from rising inflation to a global economic downturn. What about the risks that are harder to imagine? Recent events such as the pandemic and the war in Ukraine have altered the investment outlook in significant ways, turning a spotlight on the potential for new tail risks that may be on the horizon. In this episode, author and UC Berkeley lecturer Kevin Coldiron and Columbia Business School professor Laura Veldkamp discuss recent liquidity crises, portfolio strategies for managing tail risks, and why tighter monetary policies could expose cracks in the financial system. For more on this topic, PGIM's 2022 Global Risk Report analyzes the results of our tail-risk survey, which canvassed 400 senior decision-makers whose firms have a combined AUM of more than $12 trillion.