Permal co-CIO Robert Kaplan says that investors have become overly complacent after five years of strong bull markets, and that extremely low levels of volatility across asset classes is clearly unsustainable. He foresees an inevitable spike in volatility, but says that this can be viewed as a positive rather than a negative, since volatility can present opportunities. What will be the source of the coming volatility spike? Kaplan says it could be a geopolitical shock, but even in the absence of such turmoil, diverging economic conditions and diverging central banking policies throughout the world will create a volatile investing environment. Therefore, investors should have a plan for capitalizing on the opportunities presented by volatility when they arise.