The 3-Scenario Test Before Any Big Allocation

Before committing meaningful capital, test three scenarios: best case (things go well), base case (normal cycle), and stress case (drawdown + delayed liquidity). This instantly reveals whether the product fits your psychology and timeline.

Many investors allocate in optimism and panic in stress. The 3-scenario test prevents that because you pre-decide your behavior. You know what you will do in each phase.

If the stress-case makes you uncomfortable, reduce the allocation size or avoid. Suitability is not about excitement—it’s about survivability through cycles.

Truvest Insight:
Suitability is proven in stress, not in optimism.
 

Disclaimer:
Educational only. Not investment advice.