We need to fight the Reptile brain to allocate better: https://www.solidarity.in/wp-content/uploads/2020/03/Beware-the-inner-reptile-_-Financial-Times.pdf
The only way to protect yourself from “tail risks” is through Asset Allocation: https://www.solidarity.in/observations-on-asset-allocation/
Asset allocation is an effective way to manage the risk of tail events. However, it cannot fully hedge against such events or consistently generate Crisis Alpha. There are liquid alternative investment strategies, such as managed futures (with a global track record since the 1980s), that have demonstrated the ability to generate positive returns during tail events due to their positive skewness and right-tailed return distributions.
Globally, managed futures are a favored alternative hedge fund category for diversification, particularly among long-only pension funds and university endowment funds. As a result, managed futures can help generate Crisis Alpha, which can then be used to purchase undervalued equity units during a tail event.