While large doses of monetary and fiscal policy got the rebound in stocks started, it was declining infection rates and economic recovery throughout the summer that kept the party going.

With progress stalling on both fronts in the fall, however, it’s a good time to reassess investment conditions. Liquidity is still ample, but momentum is slowing. Perhaps most importantly, several sources of potential volatility are imminent. That leaves investors with the challenge: Should I stay or should I go?

Risky business

That decision of course involves tradeoffs, and those tradeoffs involve some assessment of risk. Although it has been quite a while now since the financial crisis in 2008, that event focused minds on topics like risk management and financial system fragility that had earlier received little but passing attention. Much like today.

Many of the insights came from physics, engineering, and other disciplines that have long histories of contending with systemic failure. Concepts such as "fat tails" and "nonlinearity" entered the investment vernacular.

After years of rising markets, however, and a rapid recovery from the selloff in March, discussion of these topics has faded from the public sphere as concerns about risk have abated. This is a shame because the structural risk elements are more relevant now than ever.