During periods of global economic uncertainty and heightened financial market volatility, it is worth considering how investors should think about risk when constructing their portfolios.

To this end, I was delighted to have the chance to talk recently to David Dredge at Convex Strategies in Singapore. David not only understands risk, but he also delivers his great insights in a highly entertaining way.

He spends his time immersed in understanding sources of risk and developing strategies that mitigate their impact.

He does this by embracing convexity, which is buying pockets of cheap volatility as insurance against negative outcomes in conditions of uncertainty.

When should investors do this? He says, just like insuring your house, always.

He has strong views that contradict the accepted assumptions behind Modern Portfolio Theory, which he calls Sharpe World, which, in his view, falsely equates risk with volatility.

David is full of anecdotes and illustrations of the risks investors assume in markets regulated to a Sharpe World and operated by what he calls, Rational Accounting Man.

This episode is probably the most challenging one I have edited. We spoke for nearly two hours, and I could have happily gone on for longer.

I thought about making it two episodes, but maybe take a break, if you can draw yourself away and come back to it.

I've listened to this one a few times already, and I keep hearing new gems.

As ever, none of what you are about to hear is any kind of advice. I hope you find it as entertaining and informative as I did, but this should not be used as the basis of an investment decision. Please take personal financial advice before investing a penny of your money in these crazy markets.

Please enjoy my conversation with the maverick, David Dredge.

Brought to you by Progressive Equity.

Episode 25: Meghan Duggan and Kendall Coyne Schofield