The 80-20 Investor stress test tool was designed to provide insight into how individual funds performed during past periods of equity market stress, typically when equity markets fell by 10% or more. Using these insights you can attempt to ascertain how funds may perform in a future market sell-off caused by similar macro headwinds.
The 80-20 Investor stress test tool allows you to analyse over 2,000 unit trust funds which makes it incredibly powerful. But a recent chatterbox question inspired this piece of research off the back of the latest stress test tool update.
An abridged version of the question is as follows:
"I’m noticing increasing thoughtful media attention to actual inflationary indicators and growing scepticisms that Central Banks may find themselves ‘ambulance chasing’ if markets generate inflationary heat which cannot be soothed by calming words. Rather than waiting for a storm to possibly break would it be sensible to offer a range of investment areas/funds etc that not only would be a ‘safe haven’ but could actually benefit from a period of inflation that may last longer than 1-2 years?"
Of course, I don't have a definitive answer to this question as I don't have a crystal ball that can determine which funds will perform the best.
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