ActiveAllocator portfolios are designed to be resilient to maximum draw downs- and that’s exactly how it played out for us in March. Examining markets performance in hindsight does not reveal too much for one arbitrarily selects a period to measure – random entry and exit points in an hour, day, week, month or years. Since none of us can time markets ex ante, I calculated the maximum peak to trough decline in all equity markets across the world, and in all sectors, across different time horizons. In other words the maximum amount an investor could have lost.
Anyone who had exercised a put option, or shorted these sectors with perfect foresight, would be laughing all the way to the bank today! I present the maximum sector draw down in a visual.