How to 'stress test' your shares

Tim Bennett explains six tests which you should perform on stocks before you consider adding them to your portfolio, and picks four shares that pass the tests.

The US authorities have 'stress tested' US banks to see how they'll cope with the slump. The tests weren't nearly stressful enough (unemployment is already higher than the tests estimated), but the concept is good. So here are six tests for potential stocks before you consider adding them to your portfolio.

1. Is the dividend vulnerable?

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.