Stress test your portfolio in seconds – 2020 Update

14 min Read Published: 29 May 2020

UPDATE May 2020: I have now updated the stress test tool to take into account a new important scenario, as described in full at the foot of this article. The new scenario looks at the possible impact of an escalation in the Covid-19 pandemic (or indeed any pandemic) or if we encounter an unexpected slump in economic growth, be it a recession or depression.

Investors, be they professional or DIY investors, don't give enough consideration to the downside potential of their portfolios. When engineers build a new skyscraper they don't just focus on reaching for the stars. In fact, they pay more attention to the structure's ability to remain upright. How will the structure cope in high winds or an earthquake? How much weight can it hold per square inch? This stress testing of materials and construction ultimately lays the foundation for the success of the project.

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