Stress test your portfolio

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Along with his good news for shareholders in last week’s CBA interim report, chief executive Ian Narev gave some additional views that could cause SMSF investors to pause.

In an interview with the AFR’s Chanticleer columnist (Tony Boyd), Narev said the biggest threat to CBA’s booming results were several “known unknowns” – essentially things which we know about, but which we don’t know when or if they might occur.

He said these included: a freeze of global funding markets; a significant slow down in China; stagflation in Australia and the bursting of the housing bubble. While he dismissed the prospect of these events, he disclosed that the CBA had run a stress test, which showed that it could survive a scenario that included unemployment almost doubling to 11.5% and house prices collapsing by a third.

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