Equity Markets Peak to Trough Draw-down Highest in March 2020

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.

march drawdown

Author: Sameer_Jain

Partner. Sameer Jain is founder of FinTech ActiveAllocator.com, the world’s first portal that seamlessly integrates traditional, illiquid and alternative investments within portfolios. Prior to this he was Chief Economist & Managing Director at AR Capital. Before that he headed Investment Content & Strategy at UBS Alternative Investments. At UBS, he served as a non-voting member of the Wealth Management Research investment committee, and as a capital allocator was responsible for all illiquid investing including fund manager selection and due diligence across the platform. Prior to UBS he headed product development & investment research at Citigroup Alternative Investments that managed over $75 billion of alternative investments across hedge funds, managed futures, private equity, credit structures, infrastructure and real estate. Here he led a team that developed proprietary models for portfolio strategy and asset allocation with alternative investments, provided investment support and research to pension plans, sovereign wealth funds, endowments as well as internal clients including Citi Private Bank. Before this he was with Cambridge Alternative Investments and SunGard (System Access) where he travelled to over 80 countries for work across Europe, Asia, Middle-East and Africa. He has written over 30 academic and practitioner articles on alternative investments with thousands of downloads at SSRN, presented at over a hundred industry conferences and has coauthored a book, Active Equity Management. Mr. Jain has multiple degrees in engineering, management, public administration and policy and is a graduate of Massachusetts Institute of Technology and Harvard University. He is a recipient of the Alfred Sloan Fellowship and subsequently was a Fellow of Public Policy and Management at the Harvard Kennedy School of Government for a year. He holds Series 7 and 66 securities licenses.

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