Stress Test Your Portfolio

What is portfolio stress testing?

  • The Federal Reserve, Wall Street banks, and major hedge funds use stress testing to project their losses in the event of the unexpected.
  • We start by asking questions like, "What happens if the dollar crashes, the economy falls back into recession, or oil prices skyrocket?" - over 50 scenarios in all.
  • Our model measures the impact of these scenarios on your investments using history as a guide, giving you a clearer picture of the risks to your portfolio.

How does stress testing work?

  • Our software measures how the economy has affected an investment in the past. For instance, we measure how different oil stocks behaved when oil prices skyrocketed in 2008, and how different mortgage lenders performed when home prices rose - and then fell during the 2000's.
  • The software then uses this data to project how your investments might react to a future scenario.
  • When running a stress test, each investment in your portfolio is tested against over 50 scenarios in this manner, with the results combined and summarized for easy understanding.

What can I expect upon requesting a stress test?

  • After completing three short steps, you'll immediately receive stress test results on the investments you select.
  • An advisor will contact you with the full details of your stress test, and to discuss any particular concerns that you may have.
  • The advisor will walk you through potential risks to your portfolio, and can recommend a plan of action to protect against those risks.