This free portfolio stress-tester simulates how your investment mix would behave under adverse macroeconomic conditions — specifically a change in interest rates (a Fed rate hike or cut) and a shift in inflation. Set your allocation across equities, bonds, gold, and cash, then turn the macro dials to see your expected return, portfolio volatility, Sharpe ratio, and an estimated stress drawdown update in real time. All modelling happens locally in your browser.
Each asset has a sensitivity (beta) to interest rates and to inflation. When you apply a macro shock, the tool adjusts every asset's expected return by its betas, then recomputes the portfolio's risk using a stressed correlation matrix. The core relationship is:
R_stressed = R_base + (β_rate × Δrate) + (β_inflation × Δinflation)
Long-term bonds, for example, have a large negative rate beta, so they suffer most when rates rise. Cash benefits from higher rates, and gold tends to help against inflation.
In a real crisis, assets that normally move independently start falling together — correlations rush toward 1.0 and diversification stops protecting you. That's exactly what broke the classic 60/40 stock/bond portfolio in 2022, when rapid rate hikes and high inflation hit both halves at once. To replay it here: set a 60/40 allocation, push the rate dial up 2–3% and the inflation dial up 2%, and watch the drawdown estimate. The model raises all correlations in proportion to the shock, so the risk numbers reflect how portfolios actually behave under stress. Full methodology: How to Stress-Test Your Portfolio.
What is a good Sharpe ratio? The Sharpe ratio measures return per unit of risk. Above 1.0 is generally considered good and above 2.0 excellent; below 0.5 means you're taking on a lot of risk for little extra return over cash.
Is the 60/40 portfolio still reliable? The classic 60% stocks / 40% bonds mix struggled in 2022 when rates and inflation rose together and both fell at once. Use the dials to see how a 60/40 allocation holds up under different shocks.
This tool is Step 7 of our master guide — The DIY Financial Plan: From First Dollar to Financial Independence.
Explore our other tools — the Retirement Calculator, FIRE Calculator, and Mortgage Calculator. WealthDeck provides educational tools only, not financial advice — see our Terms & Disclaimer.