Drawdown
Drawdown measures a decline in account or portfolio value from a previous peak. It is commonly expressed as a percentage.
Why it matters to you
Drawdown shows how much capital has been lost from a previous high point. Larger drawdowns require increasingly large percentage gains to recover. For example: A 10% loss requires approximately an 11.1% gain to recover. A 20% loss requires 25%. A 50% loss requires 100%.
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