Artifacts Exposed

Risk Metrics:
Embracing Uncertainty  

January 2016

The investment industry has traditionally relied on a set of standard methodologies to classify, measure and document investment choices. But some of these metrics may have become overused and ineffective. We call these "artifacts."

When it comes to evaluating risk, we often gravitate toward metrics that are easily quantifiable, and, therefore, easily justified. But taking a closer look, these methodologies can be oversimplified and highly imprecise. Statistical shortcomings in risk calculations and a narrow definition seem, well, risky.

Over the next 10 years, a heightened focus on risk exposure was cited as the number one expected shift in investors' and providers' investment strategies.1

So isn’t it time to break from tradition?


1 State Street Center for Applied Research Survey Analysis 2015