Has Your Portfolio Been Stress Tested?
Stress Testing is about assessing the potential impact of a broad array of economic scenarios (e.g. oil crash, inflation, etc.) on your portfolio and other investments.
We use a tool called Hidden Levers to measure how oil prices impact Exxon, how home sales impact Lowe’s, and millions of similar relationships between the economy and investments. Hidden Levers creates what-if scenarios to model recessions and other economic events.
For example: What if oil hits $20/barrel; what if the 2008 Recession happens again? In a stress test, we use the relationship between an investment and an economic indicator to project possible performance. For instance: if Exxon usually falls 3% when oil falls 10%, then Exxon would lose 15% if oil fell 50%.
Watch this short video to understand how we can use Hidden Levers to show you those economic factors which could have the biggest impact, positive or negative, on your portoflio.
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HiddenLevers, providers of the software used to generate portfolio stress test reports, makes the following disclosures:
This report describes one or more potential scenarios that may or may not occur. HiddenLevers does not guarantee that any particular scenario will occur as modeled in this report. HiddenLevers uses historical analysis in the creation of this report, and past performance is not a guarantee of future results. The information contained in this report is not to be construed as advice and should not be confused as any sort of advice. GxWorks LLC (dba HiddenLevers), its employees, officers or affiliates, in some instances, may have long or short positions or holdings in the securities or other related investments of companies mentioned herein. Investors should consider this report as only a single factor in making their investment decision.
HiddenLevers' mission is to educate and provide useful macro risk analytical tools to help investors make smarter investment decisions. We rely on financial data, including stock prices, provided by third parties. The data is believed to be accurate, but HiddenLevers does not guarantee or warranty this data. This report is intended only as an informational tool for you and your investment advisor, and should not in any way be construed as investment advice by HiddenLevers. If you make investment decisions based on information you receive in connection with this report, you do so at your own risk and neither HiddenLevers nor its employees will be liable for any losses that you may incur. Users of this should conduct their own independent research and due diligence and consult with their investment advisor before making any investment decisions or recommendations.