See how big a gain it takes to climb back from a loss, and roughly how many years that could take at a steady yearly return.
Gain needed to get back to even
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Time to recover at that return
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Account value now
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Dollars to win back
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Gain needed to recover from each drawdown
How it works
Losses and gains are not symmetric. After a fall, the smaller balance has to grow by a larger percentage just to get back to where it was: a 50% loss needs a 100% gain.
The deeper the drawdown, the faster the required gain climbs, which is why protecting against large losses matters more than chasing large wins.
The formula
Gain needed = 1 ÷ (1 − Drawdown) − 1
Years to recover = ln(1 ÷ (1 − Drawdown)) ÷ ln(1 + Yearly return)
Worked example
A $100,000 account that falls 30% is worth $70,000. To get back to $100,000 it needs a gain of 1 ÷ 0.7 − 1 = 42.9%. At 8% a year that takes about 4.6 years.
Drawdown Recovery questions
Why does a 50% loss need a 100% gain?
Because the gain is measured on the smaller balance. Half of $100 is $50, and $50 has to double to get back to $100.
How do I measure my drawdown?
Take the highest value the account reached and the lowest point after it. The drop between them, as a percent of the high, is the drawdown.
Does the recovery time include new deposits?
No. It assumes the account recovers from returns alone. Adding money shortens the time but does not change the percentage gain the investments need.
For informational and educational purposes only. Not investment advice, and not a recommendation to buy or sell any security. Results are estimates from the numbers you enter.