After the past two years, discussions of risk suddenly seem much less abstract. The way in which apparently diverse markets took a synchronised dive last year has shaken up ideas about diversification.

The greatest concern is that diversification itself did not work the way investors’ models had supposed. Classically, asset allocation involves making trade-offs between different asset classes. This tends to be labelled the “60/40” approach, because many institutions tend to start with 60 per cent in equities and 40 per cent in bonds.