In portfolio construction, risk is rarely where we look for it. More often, it hides in the architecture — the assumptions, incentives, and mental shortcuts that quietly shape our decisions. Nassim Taleb and Daniel Kahneman, from very different disciplines, converge on this point: the true source of fragility is structural. Markets, portfolios, and even adviser–client relationships can appear stable for years, until the design itself is tested.
History as structure: 55 years of recurring drawdowns Australian investors often mistake the last decade of market calm for the norm. Yet history tells a different story. Over the past 55 years, the share market has experienced at least eight peakto-trough falls exceeding 20 per cent — each a test of structure, not sentiment. Every retiree today has lived through several of these events, even if memory softens their frequency.
