Shock Market Simulator

The Shock Market Simulator is a lightweight web app that lets you explore what a 1929-style crash—or five alternate “what-if” stress events—could do to your modern (2025) portfolio. Enter your holdings, pick a scenario, and watch the engine recalculate your net worth, chart the before/after mix, and surface the biggest drivers.

Live demo: https://shockmarketsimulator.com/

What it does

1. Portfolio inputs

   • Quick fields for cash, bonds, stocks, gold, real estate, liabilities, plus an “Other” bucket.
   • Optional advanced splits map simple buckets (e.g. “Bonds”) into specific assets—T-Bills, 10Y Treasuries, IG/HY credit, etc.—so you can tweak how shocks fan out.

2. Scenario selector
   Six stress templates sit on top of the engine:

   • A) 1929 analog (deflationary bust) — built from Damodaran’s 1929-1932 asset returns, FDIC history, World Gold Council’s Gold Reserve Act, and period housing data (e.g., Chicago land prices).
   • B) Stagflation 2.0 — inflation shock with bonds and stocks selling off, gold and bills gaining.
   • C) Bondquake — a term-premium spike; long duration gets hit first, equities follow.
   • D) Credit crunch & property bust — refinancing wall, spreads widen; Treasuries rally while property slumps.
   • E) Tech-lever meltdown (AI unwind) — growth equity mean reversion, safe rates fall, gold rallies.
   • F) Dot-com boom/bust — late-1990s tech mania unwinds, hammering growth stocks while rate cuts aid Treasuries.

   Horizon modes (Year 1, Cycle, Peak→Trough) and location-risk sliders let you adjust the intensity; Scenario A also exposes the 1934 gold revaluation toggle.

3. Shock engine

   • Applies deterministic percentage moves per asset key (e.g. us_large: -65%, tbills: +11%).
   • Handles liabilities (mortgage, margin debt) explicitly—assets get shocked, liabilities stay put.
   • Offers a “real terms” view by dividing nominal results by CPI-style adjustments derived from the same scenario data.

4. Results panel

   • Big before/after net worth numbers, optional real vs nominal.
   • Stacked bar snapshot of composition and a waterfall chart that attributes the change.
   • Top drivers list (with tooltips explaining how simple inputs mapped to the advanced keys).
   • Scenario-specific “Why it changed” bullets plus collapsible drawers for key assumptions and sources.

Why these numbers?

Scenario	Basis	Notes
1929 analog	Damodaran “Historical Returns on Stocks, Bonds, Bills & more (1928–2024)”; World Gold Council’s 1934 revaluation; FDIC guidance; Harvard Business School work on Chicago land values.	Stocks -65% (cycle) / -85% (peak→trough), T-Bills +11%, 10Y Treasuries +15%, IG credit +8%, real estate -25% (location slider up to -50%), gold 0% or +68% when toggled.
Stagflation 2.0	Post-1970s style inflation spikes, policy drives real yields up.	Stocks -45%, 10Y Treasuries -30%, IG -20%, T-Bills +6%, real estate -20%, gold +40%.
Bondquake	Term-premium shock approximating a 400 bps jump with duration 8.	Stocks -35%, 10Y Treasuries -30%, IG -25%, T-Bills +8%, real estate -25%, gold -10%.
Credit crunch & property bust	Flight-to-quality playbook with equity/property stress.	Stocks -50%, 10Y Treasuries +10%, IG -20%, T-Bills +4%, real estate -35% (plus slider), gold +10%.
Tech-lever meltdown	Growth unwind narrative, rates compress.	Broad stocks -45%, growth bucket -65% (if split), 10Y Treasuries +12%, IG -10%, T-Bills +3%, real estate -10%, gold +20%.
Dot-com boom/bust	Nasdaq peak (Mar 2000) to trough (Oct 2002); S&P, Treasuries, credit sourced from FRED and Nasdaq fact sheets; venture drawdowns informed by Ofek/Richardson (2002).	Broad stocks -45%, growth/tech bucket -78%, small cap -35%, international -30%, 10Y Treasuries +15%, IG -5%, HY -25%, T-Bills +3%, real estate -8%, gold +12%, venture-style “other” -60%.

Every scenario ships with the sources called out in-app. See plan/init.md for the full product spec and the raw scenario JSON plus mapping rules in app/src/data/scenarioTemplates.ts. The deterministic shock calculations live in app/src/engine/shockEngine.ts, and the fan-out logic that turns “simple” buckets into advanced asset keys is in app/src/engine/portfolio.ts.

Running it locally

cd app
pnpm install
pnpm run dev

Visit http://localhost:5173/ and start modelling.

Defaults & caveats

• No authentication, no network calls: everything you enter stays in localStorage.
• First visit opens a guided onboarding wizard (cash → bonds → equities → alternatives → review). You can relaunch it later from the portfolio panel.
• Liabilities (mortgage, margin debt) don’t recurse; no forced deleveraging modeled.
• “Other assets” mimic stocks unless you override them in Advanced.
• Advanced overrides subtract from the simple bucket; leaving advanced blank means we split your simple bucket evenly across the mapped assets.
• Real view is a convenience factor based on scenario CPI assumptions—path effects aren’t modeled.

For design and roadmap ideas, see plan/design-directions.md; debugging notes live under debug/.