Investing can be exciting—but it also comes with risk. Even a carefully built portfolio can be vulnerable to market crashes, inflation spikes, or unexpected geopolitical events. That’s why I’ve developed a workflow to stress-test my investment portfolio using AI, and I want to share it with you. The good news? You don’t need to be a finance expert or coder. With Excel, AI, and the right prompts, you can analyze your portfolio, simulate scenarios, and make data-driven investment decisions.
In this guide, I’ll show you how to create a master portfolio, enrich it with AI, generate stress-test scenarios, and visualize results, so you can manage risk proactively.
Step 1: Build Your Master Portfolio in Excel
The foundation of any stress-test starts with a structured Excel portfolio. I call this my “master investor portfolio.” It contains all the assets I hold, along with essential details that will guide the AI analysis.
When building your Excel portfolio, include:
Asset Name & Type: Stocks, bonds, ETFs, crypto, commodities
Quantity & Current Value: How much you own and its market value
Purchase Price & Date: Helps track gains and losses
Sector & Industry: Tech, energy, healthcare, etc.
Geographic Exposure: Country or region
Optional Metrics: Dividend yield, liquidity, ESG score, risk rating
The more complete your Excel sheet, the better AI can enrich it and generate actionable insights.
AI Prompt to Enrich Your Portfolio
*"I have an Excel portfolio with 25 assets, including stocks, bonds, ETFs, crypto, and commodities. For each asset, enrich the dataset with:
Sector and sub-sector classification
Geographic exposure (country and region)
Historical 5-year volatility
Correlation with S&P 500
Market cap and average daily trading volume
Return the results in CSV format ready to merge with my Excel portfolio."*
With this step, your portfolio becomes an enriched master dataset, ready for stress-testing.
Step 2: Generate Stress-Test Scenarios
Once the portfolio is complete, the next step is defining the stress-test scenarios. I like to cover both historical events and hypothetical scenarios to capture a wide range of risks.
Examples of scenarios I include:
Historical market crashes: 2008 Financial Crisis, 2000 Dotcom Bubble, 2020 COVID crash
Economic shocks: sudden interest rate hikes, inflation spikes
Sector-specific crises: tech collapses, energy price drops
Black swan events: geopolitical conflicts, pandemics
AI Prompt to Generate Scenario Master List
*"Generate a list of 30 stress-test scenarios for a diversified investment portfolio including stocks, bonds, ETFs, crypto, and commodities. For each scenario, provide:
Event description and timeframe
Approximate market impact on equities, bonds, crypto, and commodities
Sector-specific impacts
Suggested metrics to track (volatility, drawdown, correlations)
Format the output as a structured table for use in Excel."*
This gives you a comprehensive scenario master list to consistently apply to your portfolio.
Step 3: Run Stress Tests Using AI
With your enriched portfolio and scenario list, I run simulations using AI. This is where you can truly see potential portfolio vulnerabilities across multiple market events.
Advanced AI Prompt for Stress Testing
*"I have a fully enriched portfolio with 25 assets, including stocks, bonds, ETFs, crypto, and commodities, complete with sector, geographic exposure, historical volatility, and correlations. Run the following stress-test scenarios:
2008 Financial Crisis: equities -45%, bonds -5%, crypto -50%, gold +5%
2000 Dotcom Bubble: tech stocks -60%, other equities -15%, bonds +2%, gold +3%
2020 COVID Crash: equities -30%, crypto -35%, bonds +5%, gold +10%
3% interest rate hike: equities -10%, bonds -12%, crypto unchanged, gold -2%
5% inflation spike: equities -8%, bonds -5%, crypto +2%, gold +5%
Provide:
A table with potential loss/gain per asset for each scenario
Total portfolio impact per scenario
Heatmaps showing high-risk assets
Recommendations for rebalancing, diversification, or hedging
Optional: a brief explanation of why each asset reacts the way it does"*
This ensures quantitative and qualitative insights in one output.
Step 4: Visualize Your Results
Visualization is key for understanding your portfolio’s risk profile. I use:
Tables: Showing potential losses per asset and total portfolio impact
Heatmaps: Highlighting high-risk sectors or positions
Scenario comparison charts: Comparing portfolio performance across historical and hypothetical events
Diversification diagrams: Displaying concentration and correlation risks
Clear visuals make it easier to identify weak spots and opportunities.
Step 5: Take Action and Iterate
Once I have insights, I can:
Rebalance overexposed sectors or assets
Implement hedging strategies with bonds, options, or commodities
Adjust geographic and asset-class diversification
Update the master portfolio regularly and rerun stress-tests
This forms a continuous feedback loop: Excel → AI enrichment → Scenario generation → Stress-test → Visualization → Portfolio refinement.
Step 6: Advanced Prompts for Deeper Analysis
Here are some additional prompts I use for deeper insight:
Risk Contribution Analysis
"Using my enriched portfolio, calculate the contribution of each asset and sector to total portfolio risk under the following scenarios: 2008 crash, dotcom bubble, COVID crash. Provide a ranked table of assets and sectors contributing most to portfolio drawdown."
Correlation Impact Analysis
"Analyze how correlations between assets change under stress scenarios. Highlight which assets are likely to move together and which provide true diversification. Suggest adjustments for better risk reduction."
Portfolio Optimization Suggestions
"Based on the stress-test results of my enriched portfolio, suggest adjustments to improve the risk-return profile while keeping expected returns within ±10% of current allocation. Provide rebalanced weights for each asset, considering sector and geographic diversification."
Why I Use This Workflow
Excel as the foundation: Keeps everything structured and transparent
AI for enrichment: Completes missing data, calculates metrics, and improves accuracy
Scenario master list: Ensures consistent stress-tests across multiple events
Actionable insights: Enables proactive portfolio adjustments
Repeatable process: Can be rerun monthly or quarterly
This workflow helps me manage risk like a professional, anticipate market shocks, and make informed investment decisions—all without complex software.
Tools I Use
Excel/Google Sheets: Master portfolio
AI Models: ChatGPT, Gemini
Market Data Sources: Yahoo Finance, Morningstar, Coingecko
Key Takeaways
Start with a structured master portfolio in Excel
Enrich your portfolio with AI to fill gaps and calculate metrics
Generate a comprehensive list of stress-test scenarios
Use AI to run simulations using your enriched portfolio
Visualize results using AI with tables, charts, and heatmaps
Make data-driven adjustments and iterate periodically
By combining Excel and AI in this way, you can stress-test your portfolio effectively, anticipate risk, and optimize for better returns—even in volatile markets.
💡 Pro Tip: Treat your master portfolio as a living document. Update it monthly, enrich it with AI, and rerun stress-tests. Over time, this becomes your personal risk-management system, giving you clarity and confidence in all market conditions.
Disclaimer: This article is for general information and education only. Nothing here is financial advice, and it shouldn’t be used as a recommendation to buy or sell anything. Always do your own research and make decisions based on your own situation. Investing—especially in crypto—comes with risks, including the chance of losing all of your money. I’m not a licensed financial advisor. Everything you read here is simply my personal view.