"I am a trend-follower for both price and fundamentals. I am also a very serious scenario realist."
The first two choices are strongly systematic. Diversification and portfolio structuring can done well before a negative event. Similarly, stop-loses can be added before any action is necessary albeit there is evidence that stop-loss triggers may be sub-optimal. Many systematic managers find the third option problematic. Engaging in scenario analysis can be disciplined but it is not a systematic activity. There is no easy way to add rules to account for scenarios, yet this can be a very effective exercise.
Why are scenarios relevant? The catalysts for any change in trends are usually, although not always, known or within our grasp. Prices are primal and condense all information, but their weighting of probabilities change through time. Past prices can be wrong about the future.
Scenario analysis can tell us something about the potential correlation of risks. A Fed tightening shock will likely have an impact on all emerging market debt. An oil shock will have an impact on the real economy and equity markets. Consequently, scenario analysis may help change the strategic weights or leverage within a portfolio. Although difficult, the mapping of scenarios to asset classes could be done systematically. Scenarios are a fundamental component of risk analysis. The biggest disconnects between trends and weighted scenarios are also likely the greatest risks. One can follow trends but still engage in scenario analysis to measure potential risks.