# Profs Roy Smith and Stephen Brown on the risks of hedging

1 Faculty News May 31, 2012 ![CNNMoney logo](/sites/default/files/styles/246w/public/assets/images/con_030743.jpg?itok=5lrpsukl)>

Excerpt from [CNNMoney](http://www.money.cnn.com/2012/05/31/investing/hedging-portfolio-risk/) -- "Hedging carries a host of other risks, like a Lehman-like bankruptcy by a counter-party leaving the fund holding the bag, according to [Roy Smith](http://w4.stern.nyu.edu/faculty/bio/roy-smith) ... 'Diversification alone is no protection against tail risk,' said [Brown](http://w4.stern.nyu.edu/faculty/bio/stephen-brown). 'In a tail risk event, we all fall down together.'"
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Read more](http://www.money.cnn.com/2012/05/31/investing/hedging-portfolio-risk/)