Drawdown maths, without the spreadsheet goblins

Drawdown Recovery Calculator

See the return required to recover from a drawdown. The lesson is simple: losses and recovery are not symmetrical.

Required recovery return 42.9% to recover from a 30% drawdown

$100,000starting balance

$70,000after drawdown

-$30,000dollar loss

+$30,000profit needed

Readout

A 30% drawdown requires a 42.9% gain to recover.

Lesson

This is why avoiding deep drawdowns matters more than it feels in the moment.

Before, drawdown, recovery

Recovery curve

Drawdown recovery quick reference

The bigger the hole, the steeper the climb

Why it matters

A drawdown reduces the capital base you are trying to grow from. That is why the recovery return is always larger than the loss percentage. Down 10% is annoying. Down 50% means you need to double what remains just to get back to breakeven.