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Buying and selling risk

Rampant volatility in 2002 has been a minefield for investors. But risk budgeting and proprietary tools are helping many navigate treacherous markets.

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These are tense days for portfolio managers. Realised equity market volatility is reaching levels not seen since the Long-Term Capital Management debacle and Russian debt crisis of 1998. “The FTSE 100 was off by double digits this morning, was up well over 100 points a few seconds ago and now it’s coming off again,” said Richard Boardman, London-based head of risk at Friends Ivory & Sime (FIS)

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