Edit the assumptions to see how the result changes. These example values are hypothetical.
Try the example, then change one input
Follow the fall and recovery
Use a $10,000 starting peak and an $8,000 trough. Enter 20% drawdown in the calculator.
- Peak assumption
- $10,000
- Trough assumption
- $8,000
- Recovery required
- 25%
The loss is $2,000, or 20% of the original peak. Recovering the same $2,000 from $8,000 needs a 25% gain.
Change one assumption
Select 50% drawdown below. Half the capital remains, so the recovery requirement rises to 100%.
Use the calculator aboveThe loss and recovery use different denominators. This arithmetic does not estimate when a portfolio will recover.
Continue with your own portfolio
Open the example in Aurora, review the request and choose the portfolio or result you want to inspect. The request carries the assumptions and the evidence checks with it.
An editable draft opens. You choose when to send it; opening the draft does not run a test, publish a portfolio or place an order.
Enter the loss from the peak
Enter the percentage decline from the original peak, not the percentage gain since the low. The result is the return needed on the remaining balance to reach that peak again.
Worked example: recovering a 20% loss
Inspect the worked arithmetic
A balance falling from $10,000 to $8,000 has a 20% drawdown. Returning to $10,000 needs a $2,000 gain on the remaining $8,000, which is 25%. The calculator estimates the required gain, not how long recovery will take.
Recovery formula
Recovery formula
Required gain (%) = drawdown / (100 − drawdown) × 100. The loss is measured from the original peak, while the recovery gain is measured from the reduced balance.
A 20% drawdown leaves 80% of the original balance, so recovery requires 25%. A 50% drawdown leaves half the capital, requiring a 100% gain. These are arithmetic relationships, not return forecasts.
Total loss and cash flows
Total loss and cash flows
Zero drawdown requires zero recovery. At a 100% drawdown the balance is zero, so no finite percentage return restores the original amount without adding capital.
Deposits, withdrawals, fees and taxes change the balance and should be analyzed separately. Recovery time cannot be inferred from the required gain.
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