Calculators
Drawdown recovery calculator
A 50% loss needs a 100% gain to undo. The relationship is not linear and it gets punishing fast, which is the entire argument for caring about the size of a drawdown rather than only about average return.
The drawdown
Or use a real one — S&P 500
Gain needed to get back to even
+42.9%
A 30.0% loss takes $100,000 down to $70,000.
Lost
$30,000
30.0% of the peak
Left to compound
$70,000
the base the recovery starts from
Years at 8.0%
4.6 yr
of nothing but climbing back
Required gain = 1 ÷ (1 − loss) − 1. Recovery time = ln(1 ÷ (1 − loss)) ÷ ln(1 + r), which assumes the return arrives smoothly. Real recoveries arrive in bursts, so treat the figure as an average rather than a schedule.
| Loss | Gain to break even | $100,000 becomes | Years at 8.0% |
|---|---|---|---|
| −5% | +5.3% | $95,000 | 0.7 |
| −10% | +11.1% | $90,000 | 1.4 |
| −15% | +17.6% | $85,000 | 2.1 |
| −20% | +25.0% | $80,000 | 2.9 |
| −25% | +33.3% | $75,000 | 3.7 |
| −30% | +42.9% | $70,000 | 4.6 |
| −35% | +53.8% | $65,000 | 5.6 |
| −40% | +66.7% | $60,000 | 6.6 |
| −50% | +100.0% | $50,000 | 9.0 |
| −60% | +150.0% | $40,000 | 11.9 |
| −70% | +233.3% | $30,000 | 15.6 |
| −80% | +400.0% | $20,000 | 20.9 |
| −90% | +900.0% | $10,000 | 29.9 |
Why the curve bends where it does
For the first twenty percent or so, the gain needed to recover is only slightly larger than the loss, and intuition holds up fine: lose 10%, make 11%, you are back. That is the range most people have actually experienced, which is why the rest of the curve is so consistently underestimated. Past about 40% the required gain starts running away from the loss, and past 70% it becomes a number that has no relationship to the decline that caused it — a 70% drawdown needs a 233% gain, which is more than the S&P 500 produced in the entire decade after 2009.
The reason is that the gain is measured against what is left, not against what was lost. Every percentage point of decline shrinks the base that has to do the recovering, so the same absolute dollar recovery becomes a larger and larger percentage. This is also why the two halves of a round trip are asymmetric in time as well as size: the descent happens at the pace of a panic and the climb happens at the pace of compounding.
The practical consequence is not 'avoid losses' — nobody can. It is that limiting the depth of a decline is worth more than improving the return that follows it, and the gap between those two levers widens the deeper you go. A strategy that caps its worst drawdown at 20% instead of 40% has saved itself a 42-point gain, which at 8% a year is nearly four years of not going backwards. That is the argument sitting underneath every fixed-fraction position sizing rule.
One caveat about the years figure. It assumes the return arrives smoothly, and recoveries do not work like that: the 2020 decline of nearly 34% was fully recovered in under five months, and the 2000–02 decline of 49% took until 2007. The smooth number is useful as an average expectation and misleading as a schedule.
Questions people ask about this
- Why does a 50% loss need a 100% gain?
- Because the gain is measured against the smaller balance that is left. $100 falling by half leaves $50, and getting $50 back to $100 is a doubling. The required gain is 1 ÷ (1 − loss) − 1, which stays close to the loss for small numbers and then runs away: 10% needs 11%, 30% needs 43%, 70% needs 233%.
- Is this the same as maximum drawdown?
- Maximum drawdown is the largest peak-to-trough decline a portfolio actually experienced, expressed as a percentage of the peak. This calculator takes any such figure and tells you what climbing out of it costs. The historical drawdowns of the S&P 500 are listed on a separate page if you want real numbers to put in.
- Does a faster recovery mean the strategy was better?
- Not by itself — recovery time depends on the return that follows, which is largely luck of timing. What is not luck is the depth: a strategy that limits the decline needs a smaller subsequent gain, so it spends less of its life climbing back to a level it had already reached.
Sources and method
- Data
- None. This tool sends nothing anywhere — every figure is computed in your browser from the values you type, and no input is stored, logged or transmitted.
- How it was calculated
- Required gain = 1 ÷ (1 − loss) − 1, and recovery time = ln(1 ÷ (1 − loss)) ÷ ln(1 + r), both computed in your browser. The time figure assumes the return arrives smoothly, which real recoveries do not.
- How often it changes
- The formula never changes. The historical preset buttons come from the S&P 500 drawdown dataset and move with it.
- Citing this page
Free to quote — please link rather than copy the table.
Plutux. "Drawdown recovery calculator." https://plutux.ai/resources/tools/drawdown-recovery-calculator
Historical figures for information only — not investment advice, and not a forecast.
Related tools
- Historical drawdownsPeak, trough, depth, and how long it took to get back — for every decline of at least 10% in the record.
- Position sizeWork backwards from the loss you are willing to take to the number of shares, and check what that position does to your account if it gaps.
- CAGRTurn a starting value, an ending value and a number of years into a compound annual growth rate — and see what the same total return looks like over other horizons.
Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer