Drawdown Recovery Calculator
See the gain required to recover from a portfolio decline, why losses and recoveries are not symmetrical, and roughly how long recovery could take.
Loss and recovery reference
The gain required after declines of different sizes.
| Decline | Gain required to break even |
|---|---|
| 5% | 5.26% |
| 10% | 11.11% |
| 20% | 25% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100% |
| 60% | 150% |
| 70% | 233.33% |
| 80% | 400% |
| 90% | 900% |
Formula and method
Required gain: d ÷ (1 − d), where d is the decline as a decimal, expressed as a percentage.
Estimated recovery time: ln(1 ÷ (1 − d)) ÷ ln(1 + r), where r is the assumed annual return. It assumes a constant return and no contributions.
Losses and gains are asymmetric because a gain is measured against the smaller, post-loss balance.
Worked example
A €100,000 portfolio falls 50% to €50,000.
Required gain = 0.5 ÷ (1 − 0.5) = 1.0 = 100%.
At an assumed 7% a year, recovery takes roughly ln(2) ÷ ln(1.07) ≈ 10.2 years with no further contributions.
FAQ
Frequently asked questions
Why does a 50% loss need a 100% gain to recover?
The gain is measured against the reduced balance. €100 falling 50% leaves €50, and returning to €100 from €50 is a 100% increase.
What is the formula?
Required gain = drawdown ÷ (1 − drawdown), expressed as a percentage. A 20% fall needs 0.2 ÷ 0.8 = 25%.
Why can a 100% loss never be recovered?
The balance is zero, and no percentage gain applied to zero produces a positive value, so there is no finite required return.
How long would recovery take?
That depends on the return you assume. Enter an expected annual return and the calculator estimates the number of years at that constant rate.
Does this account for contributions?
No. It measures the return required from the remaining balance alone. Adding new money shortens recovery but is not the same as recovering the loss.
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