Build Custom Scenarios for Insight Into How Your Portfolio May Perform

HOW DID STOCKS PERFORM as the Spanish flu ran its course a century ago?

- Mihai Stefanita, Constantin Cosereanu and Steven Ioannou

At the beginning of 1918, the Dow Jones Industrial Average stood at 76. Although the pandemic emerged in the early months of the year and World War I raged in Europe, the benchmark rose 17% to a high in October. The end of the war was nearing that month, but it was also when the virus’s lethal second wave crested.

IN THE CURRENT environment, many firms are building historical or hypothetical scenarios to get insight into how to position their portfolios. The Portfolio & Risk Analytics (PORT) function enables you to conduct deep analysis of a portfolio’s performance under different stress scenarios and then share your analysis across your firm or with other sets of users.

You can use PORT, for example, to build a custom scenario based on how markets behaved in the era of the Spanish flu and use that to stress-test your portfolio. Here’s how.