Why Your Portfolio Needs a Stress Test Before the Market Gives It One
Most investors learn how their portfolio behaves under pressure at the worst possible moment: while the pressure is happening. Prices fall, headlines get louder, and decisions that should be calm become emotional. Finance professional Devin Bulna argues that the smarter move is to find those weak points early, on paper, when nothing is at stake yet. That habit is called a stress test, and it may be the most underused tool in personal investing. The Cost of Learning in Real Time A portfolio can look healthy for years and still hide fragile spots. Calm markets reward almost everything, so weaknesses stay invisible. When conditions shift, those weaknesses surface all at once. There is no time to fix them, and panic selling can lock in losses that patience might have avoided. What a Stress Test Actually Is A stress test asks one question: if this specific bad event happened, what would my portfolio do? It is not a prediction. It is a rehearsal. You pick a scenario, estimate the impact ...