Portfolio Strategies The Danger of Getting Out of Stocks During Bear Markets Panicking and pulling out of
stocks during turbulent market conditions can have a significant and lasting negative impact on your wealth.
Expected tail loss is an estimation process that seeks to measure potential
loss during turbulent markets and is based on the relative historical performance of each sector.
Diversified portfolios help smooth out the volatility in the markets as different segments fall in and out of favor, and that can help limit downside risk,
especially during turbulent markets.
During turbulent markets or in thinly traded securities like municipal bonds or stocks in developing nations, that swap may come off at widely divergent prices.
During turbulent markets, active managers can move to cash or concentrate on low - volatility sectors to protect investors from losses.