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The investing glossary / Quick reference

Drawdown: meaning and practical context

A decline from a prior peak to a later value, often expressed as a percentage.

A decline from a prior peak to a later value, often expressed as a percentage.

In practice

A 50% loss requires a 100% gain on the remaining balance to recover. Contributions can change account balances without representing investment recovery.

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A definition is a starting point. The related guide explains the mechanics, gives examples, and identifies the assumptions to check before applying the concept.

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General financial education, not personalized investment or tax advice. Investing involves risk, including loss of principal.