i What this calculator does
A portfolio looks diversified until the first real crash shows which holdings fall together. This stress test applies the peak-to-trough drawdowns of four historical crises, the 2008 financial crisis, the 2020 pandemic crash, the 2022 rate shock and the 2000 to 2002 dot-com bust, to the mix you enter across seven asset classes, and shows the rand loss, the percentage drawdown and the gain needed to recover in each.
The drawdowns are rounded figures for the asset-class indices, listed in the table on this page with their periods, so you can see exactly what is being assumed. It is a complement to the forward-looking value at risk calculator: that one asks what a normal bad month looks like, this one asks what the worst years actually did.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
The drawdowns being applied
| Asset class (proxy) | 2008 financial crisis | 2020 pandemic | 2022 rate shock | 2000 to 2002 dot-com |
|---|---|---|---|---|
| Global equities (S&P 500) | −57% | −34% | −25% | −49% |
| SA equities (JSE All Share) | −45% | −35% | −15% | −32% |
| SA bonds (All Bond Index) | −12% | −20% | −8% | −5% |
| Global bonds (US Aggregate) | −4% | −6% | −17% | 0% |
| Gold (USD) | −30% | −12% | −20% | −5% |
| Bitcoin | n/a | −50% | −77% | n/a |
| Cash | 0% | 0% | 0% | 0% |
Each figure is the approximate peak-to-trough fall of the proxy index in its own currency, rounded to the nearest percentage point and taken from the index providers' published series. They are the fall at the worst point, not the calendar-year return, so they are larger than the annual figures usually quoted. Rand investors in global assets did somewhat better than these numbers in 2008 and 2020 because the rand weakened at the same time; the calculator does not add that effect.
How to read the result
The rand loss is the number to sit with. A 30% drawdown on R1 million is R300,000 that is not there on the statement for a year or more, and the gain needed to recover it is 43%, not 30%, which the drawdown recovery calculator turns into years. The four crises differ in character: 2008 and 2000 were long equity bear markets in which bonds and cash held up; 2022 was the rare year in which bonds fell alongside equities, which is why a classic 60/40 mix shows its worst relative result there; 2020 was violent and short.
What it does not tell you
Past drawdowns are a floor for imagination, not a ceiling for losses. Crypto did not exist in two of the four crises and its 2022 figure comes from a single cycle; SA bonds have a wider range of outcomes than three data points show; and correlations that held in these episodes can break. The test also assumes you did nothing during the fall. Most people sell near the bottom, which turns a temporary drawdown into a permanent loss, and that behavioural risk is the one the psychology risk calculator is for.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
Frequently asked questions
Why are these drawdowns larger than the annual returns I have seen quoted for 2008?
Because they measure the fall from the peak to the lowest point, which in 2008 ran from October 2007 to March 2009 across two calendar years. The calendar-year 2008 return of the S&P 500 was about −37%; the peak-to-trough fall was about −57%.
Why does Bitcoin show n/a for 2008 and 2000?
It did not exist as a traded asset. Rather than pretend, the calculator spreads its weight across your other holdings for those two tests and says so in the breakdown.
Does the test account for the rand weakening in a crisis?
No. The equity and gold drawdowns are in their own currencies. In 2008 and 2020 the rand fell sharply, which softened the rand loss on offshore holdings; in 2022 it did not help. Adding that effect would make the test more flattering, so it is left out.
Why does my bond-heavy portfolio look worst in 2022?
Because 2022 was the year interest rates rose fastest in four decades, and bond prices fell with equities instead of cushioning them. It is the main reason the classic 60/40 split is no longer treated as a safe default.
Can I add other asset classes?
Not in this version. Property, commodities other than gold and single shares are left out because their crisis behaviour varies too much to summarise in one number per episode.
What is a reasonable worst-case to plan for?
For a portfolio you will not need for ten years, a 2008-sized fall is the sensible planning case. For money needed within three years, the question is whether you can afford the 2020 result, and if not, the allocation is too aggressive for that money.
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