And yet, some assets are performing. The obvious answer is to diversify. With four decades of declining Treasury rates, liquid financial assets such as equities and government bonds had been the easy long-term answer. But they might not be the answer tomorrow.

The Great Financial Crisis is the most obvious example of increased asset class correlation during periods of illiquidity. While perhaps the most memorable, the GFC is only one in a series of increasing instances of asset class correlation during stress. The tech and IPO crash of 2001, the 1997 Asian crisis, and the collapse of Long-Term Capital Management also foreshadowed the increasing complexities within market volatility. It seems the long-term trend is that during market dislocations, investors suffer from increasing correlations among normally ‘’uncorrelated’’ financial asset classes.

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