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Maximum Drawdown Calculator

Measure the largest peak-to-trough fall and the gain required to recover from it.

About Maximum Drawdown Calculator

A 30% fall requires a 43% gain to recover, because the gain is measured against the reduced value. That asymmetry is why avoiding large drawdowns matters more than capturing every upswing. Maximum drawdown is the risk measure investors actually respond to, and the recovery asymmetry is what makes deep losses so costly in time.

Formula

Maximum Drawdown

Drawdown = (peak − trough) ÷ peak; recovery gain = (peak − trough) ÷ trough

recovery gain
Always larger than the drawdown, because it is measured on a smaller base

Worked example

With the default values below, Maximum Drawdown Calculator returns Maximum Drawdown of 28.800%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Peak portfolio valueminimum 0.01
250,000
Trough portfolio valueminimum 0
178,000
Current portfolio valueminimum 0
215,000
Expected annual returnaccepts 0–100 %
7 %

Results

Maximum Drawdown
28.800%
Gain Needed to Recover the Peak
40.449%
Value Lost at the Trough
$72,000.00
Drawdown Still Outstanding
14.000%
Years to Recover at the Expected Return
2.23

Step by step

  1. 1Values used
  2. 2Maximum Drawdown
  3. 3Maximum Drawdown= 28.800
  4. 4Gain Needed to Recover the Peak= 40.449
  5. 5Value Lost at the Trough= 72,000.00
  6. 6Drawdown Still Outstanding= 14.000
  7. 7Years to Recover at the Expected Return= 2.23

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or fees or charges into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Maximum Drawdown calculated?

Drawdown = (peak − trough) ÷ peak; recovery gain = (peak − trough) ÷ trough A 30% fall requires a 43% gain to recover, because the gain is measured against the reduced value. That asymmetry is why avoiding large drawdowns matters more than capturing every upswing.

Why does Maximum Drawdown matter?

Maximum drawdown is the risk measure investors actually respond to, and the recovery asymmetry is what makes deep losses so costly in time.

What values do I need to enter?

This calculator takes 4 inputs: Peak portfolio value, Trough portfolio value, Current portfolio value, Expected annual return. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

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