Drawdown recovery calculator
How much must an investment gain to recover its old value after a fall, and how long does it take at the return you choose? The calculation is illustrative and returns are not guaranteed.
Enter your assumptions
How much you need to earn back
| Fall | Gain needed | Time at 7% a year |
|---|---|---|
| −10% | +11.1% | 1.6 years |
| −20% | +25% | 3.3 years |
| −30% | +42.9% | 5.3 years |
| −40% | +66.7% | 7.6 years |
| −50% | +100% | 10.2 years |
| −60% | +150% | 13.5 years |
| −70% | +233.3% | 17.8 years |
| −80% | +400% | 23.8 years |
| −90% | +900% | 34 years |
Why recovery is harder than the fall
A 10% loss is repaired by an 11.1% gain, but a 50% loss needs 100% and an 80% loss needs 400%. The deeper the fall, the steeper the way back. That is why professional investors focus above all on keeping losses from getting too deep.
Enter the value at the peak, the fall and the return you expect after it. Add a monthly deposit and see how the recovery shortens.
Frequently asked questions
Why does recovery need a bigger gain than the fall?
Percentages are measured from different bases. After a 50% fall half the value is left, and to get back you have to double it, a gain of 100%.
How is the required gain calculated?
The formula is 1 / (1 − fall) − 1. A 20% fall needs 25%, a 33% fall needs 50% and a 50% fall needs 100%.
Does buying more speed up recovery?
Regular deposits at lower prices shorten recovery because you buy more units. Try adding a monthly deposit in the calculator.
How long did recoveries take after historical falls?
It depends on the market. Detailed falls and recovery times for the S&P 500, Nasdaq and Bitcoin are on the Bear market radar page.
Related
Calculations are illustrative and based on the assumptions you enter. This is not investment or tax advice and returns are not guaranteed.