SAGEFUSION STRESS TESTING RESULTS

At SageFusion, our advanced platform has been instrumental in performing rigorous stress tests during times of financial distress. While our proprietary Investment Lab remains exclusive and not available for public use, we maintain a comprehensive data warehouse to carry out detailed financial analyses and stress tests when market instability strikes.

​      This robust database enables us to assess if your clients' portfolios are at risk of overexposure.
Our approach involves examining the extreme values of financial instruments during market panics. Historical data from significant market crashes, such as those in 1987, 2009, and 2020, highlights the importance of scrutinizing conventional investment advice. While many financial experts advocate for a long-term 'buy and hold' strategy, it's crucial to recognize that severe market downturns can coincide with critical moments, such as retirement, leading to prolonged recovery periods.

      Additionally, the misconception that gold is a safe haven during market volatility needs re-evaluation. Notably, gold experienced a 60% drop in 2009 and a 30% decline in 2020. These downturns occur because, during periods of extreme market stress, both individuals and institutions often engage in a 'flight to safety,' selling off all assets, including bonds. Consequently, almost all asset classes can crash simultaneously, a phenomenon exacerbated by the widespread use of ETFs (exchange-traded funds). Since ETFs hold a diverse range of assets, their mass liquidation can cause correlated declines across various asset classes, undermining traditional diversification strategies.

      For a comprehensive understanding of potential drawdowns, refer to the attached spreadsheet detailing maximum drawdowns during financial crises. This information can help you evaluate the resilience of your investments against significant market downturns.

Max Drawdown During Financial Crises
Please open the attached spreadsheet to analyze your potential drawdowns in various financial crises.

• drawdowns__1_.csv

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