Even music that is considered to be generally melodic and harmonious contains dissonance. The buildup and subsequent resolution of aural tension is to a great degree responsible for the beauty, emotion, and expressiveness we find so compelling in music.

Musical dissonance–and its opposite, consonance–are terms that apply to melody, harmony, chords, tonality, and even rhythm and meter. As a sound quality, dissonance feels unstable, giving the listener an aural need to resolve to a stable consonance.

While there are physical and neurological realities that contribute to the experience of dissonance, its precise definition is culturally conditioned. While it varies greatly among musical styles, traditions, and cultures, dissonance does exist across all musical traditions. That's why one man's rap music is another man's three-part sonata.

Investors, like some music lovers, seek the ideal in their portfolios. The risk involved in desiring even a relatively smooth ride is that the anomalies associated with investing are what often yield the most treasured returns. Assets can be volatile, yielding returns that are sometimes mild and sometimes extreme.

At First Quadrant, we seek this volatility. We understand that volatility is not consistent, but cyclical. And we know that you need to control your exposure to volatility by conscientiously budgeting risk. The bottom line is that at FQ we delve into positions where many other managers are uncomfortable. We moreover try our best to live above the fray: the latest trends; the investor squabbles about the future; the swings in investor tolerance and appetite for risk. All of that discord, brutal noise to others, is music to our ears at FQ. Simply put, it's dissonance that generates the opportunities that drive our business.