​+1 (917) 512-9523
99 Wall Street Suite 1672, New York, NY 10005​
info@investmentscy.com
 
 
Schedule a Meeting
Investment Science | NYC Consulting Services
  • What We Offer
  • Who We Serve
  • About
  • Podcast
  • Insights
  • Case Studies
  • Testimonials
  • Consumers
  • Contact Us
  • What We Offer
  • Who We Serve
  • About
  • Podcast
  • Insights
  • Case Studies
  • Testimonials
  • Consumers
  • Contact Us

Insights

How Exposed Are You In the Next Market Crash?

8/2/2020

0 Comments

 
Picture













      Investment Science has used Investment Lab, a product to push a button, and make money to conduct stress tests during financial panics. While Investment Lab is not for sale or the general public to use, we do have a large data-warehouse to conduct financial analysis and stress tests when market panics occur. This data-warehouse could be used to verify whether or not your clients' portfolios are overexposed.  What we did here was look at the maximum and minimum values of financial instruments during market panics. If you recall, back in 1987, 2009, and 2020 the stock market crashed. This is why it is important to question when many financial experts state to only go 'long' in the stock market, and 'buy and hold' because these draw-downs could occur the year you want to retire, and it could take a large amount of time for the market to recover. Likewise, many consumers unfortunately believe that gold is a safe bet for market volatility. However, gold crashed 60% in 2009, and 30% in 2020. The reasoning behind these market crashes is that firms and individuals will conduct a 'flight to safety' in which every single asset is sold, inclusive of bonds. Almost everything crashes together as well, due to the fact that ETFS (An exchange traded fund (ETF) is an investment fund traded  on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur) contain many stocks, so when these ETFS are purchased and sold, there are ample scenarios where every single asset class moves together, so diversification even won't help. To conclude this post, please open up the attached spreadsheet to see what your draw-down (A drawdown is the negative half of standard deviation in relation to a stock's price. A drawdown from a share price's high to its low is considered it's drawdown amount. If a stock  drops from $100 to $50 and then rallies back to $100.01 or above, then the drawdown  was $50 or 50% from the peak) would be. Max Drawdown During Financial Crises

Hire us for portfolio analysis
0 Comments



Leave a Reply.

    Author

    Michael Kelly has been working within banking technology for over a decade, and his experience spans across algorithmic trading, project management, product management, alternative finance, hedge funds, private equity, and machine learning. This page is intended to educate others across interesting topics, inclusive of finance.

    Archives

    February 2023
    January 2023
    December 2022
    November 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    July 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    September 2020
    August 2020

    Categories

    All
    Agile Project Management
    Change Management
    Compliance
    Data Science
    Disruptive Innovation
    Economic Analysis
    Education Training
    Financial Education
    Marketing
    Natural Language Processing
    Portfolio Management
    Technology Strategy
    Trading Research
    Venture Capital
    XBRL

    RSS Feed

Picture
WHAT WE OFFER  /  WHO WE SERVE  /  ABOUT /  ​PODCAST  /  INSIGHTS  /   CASE STUDIES  /  TESTIMONIALS  /  CONSUMERS   /  CONTACT US  
OUR OFFICE
SAY HELLO
If you are interested in working with us or ​just want to say hello simply drop us a line!

Email: info@investmentscy.com
Phone: ​+1 (917) 512-9523
​
RESERVE TIME
OUR INSIGHTS
Stay up to date with our latest content from our insights page.
Subscribe To Our Insights
  © 2023 Investment Science, LLC  |  All Rights Reserved  |  Legal Statement