No matter how much you steer a client toward staying invested within their comfort zone so they can meet their long-term goals, people have a natural inclination for that “grass is greener” mentality. They watch the news. They talk to their neighbor. They know how the market is performing, and from there, it’s an easy jump to that age-old question: “Why is the market beating my portfolio?"
With Stress Tests, you can answer that question and seamlessly depict the effects of different market scenarios on a client's portfolio with the click of a button. To get started, navigate to a client portfolio and click on the Stress Tests tab found at the top of the portfolio, directly under the client header.
Note: Riskalyze Stress Tests use past market conditions as examples of the scenarios clients ask about most. Stress tests aren't simply a rear view mirror or historical snapshot though. For each scenario, Stress Tests depict how a portfolio would likely perform, in the future, if a similar market period were experienced.
Stress Tests Overview
Riskalyze includes five default Stress Tests for every advisor. The default Stress Tests are a 2013 Bull Market, 2008 Bear Market, Financial Crisis, Interest Rate Spike and 2020 Pandemic. Each stress test shows the advisor the date range used to build the scenario, the historical performance of the S&P in that timeframe, plus what the client portfolio is likely to do if the same market conditions occur again. This allows advisors to stress test investments that may not have even existed in the past:
Compare each stress test to see how hedged a portfolio is against interest rate swings and market performance. Stress Tests allow advisors and clients to visualize how a portfolio would fare under these different circumstances. Stress Tests is, essentially, your "what if?" conversational tool for portfolio comparison.
Note: Stress Tests projections do not assume reinvestment of annuity payments. For annuity accounts that have yet to annuitize, Stress Tests will reflect the guaranteed growth rate specified for the account (Base Rider Increase %).
Filtering Stress Tests
Click the filter icon at the top right to select the Stress Tests you'd like to see and hide the ones you don't. Your saved custom Scenarios are available to be viewed here as well. Don't have any custom Scenarios yet? Learn how in How to Use Scenarios.
Link to Scenarios
Hovering over the header of any individual Stress Test card will reveal a link to our portfolio Scenarios feature, where you can further explore the selected hypothetical - viewing projections for additional benchmarks and comparators, along with switching over to Historical mode to model past performance during the indicated time period.
Note: Advisor fees are not included in any of the Stress Tests shown above.