RupeeCase
Education . Drawdown Math . 1 of 3
Systematic Investing 101
The Shallow Fall
Compounds
A 17% fall needs 21% to recover. A 27% fall needs 37%. The gap on the way down was ten points. The gap on the way up was sixteen.
Shallowest Max Drawdown
17.6%
Recovery needed: 21.4%
Deepest Max Drawdown
27.2%
Recovery needed: 37.4%
Fall 20%
needs 25.0% to recover
Fall 30%
needs 42.9% to recover
Fall 50%
needs 100.0% to recover
The fall is arithmetic. The recovery is geometric. That gap decides who compounds and who repairs.