Drawdown Calculator
Measure portfolio losses and the gain needed to recover
Put your portfolio's numbers in
Free. No sign-up. The answer updates as you type.
The high point you are measuring down from, for example 100000. If you are unsure, use the largest balance your statement ever showed.
The bottom of the same fall, for example 70000. Zero and negative balances are allowed here: the calculator measures them instead of refusing them.
A fall of 30.00%: 30,000 gone from a high of 100,000
To get back to 100,000, the 70,000 that is left has to grow by 42.86%, not by 30.00%. The gain is bigger than the fall because it is counted on the smaller amount you have now.
The numbers behind that
Money the fall took
The high point of 100,000 minus the 70,000 at the bottom.
30,000
The fall, as a share of the high
30,000 divided by the high point of 100,000. A fall is always counted from the highest value, not from what you first put in.
30.00%
Gain needed to get back
30,000 divided by what was left, 70,000. This gain is not profit: it only returns the balance to 100,000. As a percentage, it is 1.43 times the fall.
+42.86%
What getting back takes
From 70,000 back to 100,000 is a gain of 42.86%. How long that takes depends on how fast the money grows, with nothing added and nothing taken out:
- At 3% a year, 70,000 is back at 100,000 within 13 years.
- At 5% a year, 70,000 is back at 100,000 within 8 years.
- At 7% a year, 70,000 is back at 100,000 within 6 years.
- At 10% a year, 70,000 is back at 100,000 within 4 years.
Or add 30,000 of new money and the balance is back at 100,000 straight away.
The yearly rates are examples this calculator uses to show the arithmetic. They are not a forecast of what any investment will earn.
What every size of fall demands to get back to even
The money column uses your own high point of 100,000. Read a row like this: if the fall were this deep, this is what would be left, and this is the rise it would take to get back to where you were.
| If the fall were | What would be left | Gain needed to get back to even | How many times the fall that is |
|---|---|---|---|
| 5.00% | 95,000 | +5.26% | 1.05 times |
| 10.00% | 90,000 | +11.11% | 1.11 times |
| 20.00% | 80,000 | +25.00% | 1.25 times |
| 30.00%yours | 70,000 | +42.86% | 1.43 times |
| 40.00% | 60,000 | +66.67% | 1.67 times |
| 50.00% | 50,000 | +100.00% | 2.00 times |
| 60.00% | 40,000 | +150.00% | 2.50 times |
| 70.00% | 30,000 | +233.33% | 3.33 times |
| 80.00% | 20,000 | +400.00% | 5.00 times |
| 90.00% | 10,000 | +900.00% | 10.00 times |
This is why avoiding a deep fall is worth more than it sounds. Up to a fall of about a fifth, the gain you need is no more than a quarter bigger than the loss you took. At a half it is twice the loss, and at four fifths it is five times.
A drawdown measures how far an investment falls from a peak before it recovers. It is one of the most intuitive and widely used measures of downside risk, because it answers the question every investor cares about: how much could I have lost from the top?
Drawdown % = (Peak − Trough) / Peak × 100
Recovery Gain % = (Peak / Trough − 1) × 100
Step 1: Choose how to give the numbers: Highest and lowest for one fall, or List of values to find the worst fall in a history.
Step 2: With Highest and lowest, type the highest value before the fall and the lowest value after it. With List of values, type the value at the end of each period, oldest first.
Step 3: With List of values, use Add a period and the remove buttons until you have one box per period.
Step 4: Read the answer, the breakdown and the table of falls underneath. Everything recalculates while you type, so there is no button to press and nothing left on screen from an earlier set of numbers.
What Is a Drawdown?
A drawdown is the decline of an investment from a peak value to a subsequent trough, expressed as a percentage of the peak. If a portfolio rises to 100,000 and then falls to 70,000, the drawdown is 30%. Drawdowns are measured peak-to-trough rather than from a fixed starting point, because what matters for risk is how far you fall from your high-water mark, the most you ever had.
Drawdown is one of the most honest risk measures because it reflects the loss an investor would actually have experienced and had to sit through. Unlike volatility, which treats upside and downside swings the same way, drawdown focuses only on the downside, the pain that causes investors to panic and sell at the worst possible time.
Maximum Drawdown
Max Drawdown = max[(Peak − Value) / Peak]
Maximum drawdown (MDD) is the largest peak-to-trough decline over a given period. To compute it, you walk through the series of portfolio values while tracking the running high-water mark, the highest value seen so far. At each step you measure how far the current value sits below that high. The deepest of all those declines is the maximum drawdown.
MDD is a cornerstone of risk-adjusted performance analysis. Strategies are often compared using the Calmar ratio, which divides annualised return by maximum drawdown, rewarding approaches that earn returns without subjecting investors to catastrophic falls. A strategy that returns 12% a year with a 15% max drawdown is generally preferable to one returning 14% with a 50% max drawdown, because the latter is far harder to live with and far slower to recover from.
The Loss-Recovery Asymmetry
The most important and most misunderstood feature of drawdowns is that losses and recoveries are asymmetric. A 20% loss does not require a 20% gain to recover, it requires a 25% gain. The reason is that the loss and the recovery are measured against different bases. After a fall, your capital is smaller, so the same amount of money represents a larger percentage of the reduced balance.
This asymmetry explains why capital preservation is so valuable. Avoiding deep drawdowns is mathematically more powerful than chasing high returns, because a single catastrophic loss can take years or decades to undo. An investor who never suffers a drawdown larger than 25% needs only modest gains to keep recovering, while one who endures an 80% collapse needs to quintuple their remaining capital just to get back to even.
When the Balance Reaches Zero or Goes Below It
One case is worth stating plainly, because the calculator above measures it rather than refusing it: a balance that reaches zero. The fall is a full 100% of the high point, and the gain needed to recover is not a large number, it does not exist. Zero grows to zero at any rate of return, so nothing but new money brings the account back.
A balance that goes below zero, which a margin or leveraged account can, is worse again. The fall is more than the whole account, and a percentage gain applied to a negative balance only pushes it further from even. The page says so in words instead of printing a recovery figure, because any percentage printed there would be arithmetic with no meaning behind it.
How the List of Values Is Read
The List of values mode reads your list in the order you type it and does not quietly drop anything. A period left empty in the middle of the list stops the calculation and is named on screen, because closing that gap would put two periods side by side that were never next to each other in time, and the worst fall reported would belong to a history you never had. Empty boxes at the end of the list are left out, and the page tells you which ones.
Periods worth zero or less are kept and measured. They are the two values a drawdown tool exists to handle, and discarding them would flatter the answer at exactly the moment a reader most needs it to be honest.
Why Drawdown Matters for Risk & Sequence of Returns
For an investor still accumulating wealth, a deep drawdown is painful but survivable, provided they avoid selling at the bottom and continue investing. For a retiree drawing income, a deep drawdown is far more dangerous. Withdrawing a fixed amount from a portfolio that has just fallen sharply locks in losses and leaves less capital to participate in the eventual recovery. This is the core of sequence-of-returns risk: the order in which returns arrive matters enormously when money is being withdrawn.
Two retirees can earn the same average return over thirty years yet end up with wildly different outcomes if one experiences a severe drawdown in the first few years of retirement. Limiting maximum drawdown, through diversification, position sizing, and an appropriate asset allocation, is therefore one of the most effective ways to protect a portfolio that must also fund spending. Understanding your drawdown profile before a downturn arrives is far better than discovering it in the middle of one.
Frequently Asked Questions About the Drawdown Calculator
Losses and gains are asymmetric because they are measured against different bases. A 50% loss cuts a portfolio of 100,000 to 50,000. To get back to 100,000 from 50,000 you must double your money, a 100% gain, because the recovery is now measured against the smaller base of 50,000. The deeper the drawdown, the more disproportionate the required recovery: a 20% loss needs a 25% gain, a 50% loss needs 100%, and an 80% loss needs a 400% gain just to break even.
Drawdown is the percentage decline from a single peak to a single trough. Maximum drawdown (MDD) is the largest peak-to-trough decline observed across an entire history of portfolio values. To find it, you track the running high-water mark and measure the worst percentage fall below that high. MDD is one of the most widely used measures of downside risk because it captures the worst-case loss an investor would have endured.
A large drawdown early in retirement is especially damaging because you are withdrawing money from a shrinking balance, leaving less capital to recover when markets rebound. This is sequence-of-returns risk: the order of returns matters, not just the average. Two retirees with identical average returns can have very different outcomes if one suffers a deep drawdown in the first few years. Limiting maximum drawdown is therefore central to managing portfolio risk in the withdrawal phase.
Yes, and you should. A balance of zero is a 100% drawdown, the deepest one there is, and the calculator reports it instead of dropping the period. A negative balance, which a leveraged or margin account can produce, is a fall of more than 100% of the high point. In both cases the page stops printing a recovery percentage and explains why there is not one: zero stays zero however much it grows, and a percentage gain on a negative balance only makes it more negative. Only new money closes that kind of hole.
Related tools: Sequence of Returns Calculator · Stock Position Size Calculator
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Educational use only. This tool provides estimates for informational purposes and does not constitute financial, investment, tax, or legal advice. Results are based on inputs you provide and mathematical models, they do not guarantee future performance. Always consult a qualified financial adviser before making investment decisions.