Price excesses have built up over a long bull market. Stocks are expensive, and the volatility shock wave is traveling the globe. This quarter, we discuss the risks correlated with the current volatility, potential new sources of instability, and the sectors that could be the performance beneficiaries of these trends. Our research indicates we have moved into a US dollar bear market, an environment in which foreign and emerging market stocks historically have a tendency to outperform US stocks. In fact, we’re already seeing signs of a rotation into value stocks in foreign markets. We also share why we believe commodities and emerging market bonds may represent the best hedges to equities.