In recent years, market volatility has increased significantly, largely due to the rising complexity of global economic systems and the growing interconnectedness of financial markets. The COVID-19 pandemic, for instance, led to a substantial increase in market volatility, with the VIX index (a measure of market volatility) reaching record highs in 2020.
Conversely, the counterparties who remained were those with strict risk limits. Goldman Sachs exited its positions within hours, losing virtually nothing. The lesson from 2021 is clear: Volatility only hurts you if you are forced to act. Unlevered, patient capital treats volatility like weather—noted, but not feared. unperturbed by volatility pdf 2021