Scenario building increases in importance

Scenario building, a plan for unexpected events, is the current rage in risk management. Situational analysis and a process to identify future critical uncertainties is especially necessary in risky asset markets. The thought of what is plausible not just probable is where time and effort must be placed.

This process is especially important at the end of the year, or this is when most scenario analysis is done. But, like Christmas, it should be celebrated 365 days a year.