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Drawdown Recovery Calculator

Calculate the gain and time required to recover from an investment loss.
Gain required
42.86%
Capital remaining
70.00%
Estimated recovery time
4.6 years

A larger drawdown requires a disproportionately larger gain. The result measures the mathematical recovery hurdle, not the likelihood or timing of that return.

Investment losses are asymmetric: a 50% decline needs a 100% gain just to break even. This calculator converts a portfolio drawdown into the exact recovery return and estimates how long recovery would take at an editable annual return. It is a risk-planning tool, not a forecast of when markets will recover.

Formula reviewed 2026-08-021 primary sourceMethodology and disclosures →

How this drawdown recovery calculator works

The calculator starts with 100 units of capital, applies the selected loss, and divides the lost amount by the smaller remaining base. It then compounds the selected annual recovery rate until the balance returns to 100.

Formula

Recovery gain = loss % ÷ (100% − loss %); years = ln(100 ÷ remaining capital) ÷ ln(1 + annual return)

Markets do not recover at a steady rate. A portfolio can suffer additional losses, receive contributions, or change holdings before returning to its prior peak.

Primary specifications

Before you use the result

Assumptions

  • • The loss is measured from a prior portfolio peak.
  • • The recovery rate compounds annually without withdrawals or new contributions.
  • • Taxes, fees, inflation, and the path of returns are excluded.

Quick start

  1. 1. Enter the percentage decline from the portfolio peak.
  2. 2. Choose a conservative recovery-return assumption.
  3. 3. Use the recovery hurdle to evaluate position size and downside before investing.

Frequently asked questions

Why does a 50% loss require a 100% gain?

A 50% loss leaves half the original capital. Doubling that smaller balance is required to return to the starting value.

Does the recovery estimate predict the market?

No. It shows how long a constant assumed return would take. Actual returns are uneven and can include further declines.

Should contributions count as recovery?

New contributions can restore an account balance but are not investment gains. This tool isolates the return required from the remaining capital.

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Go deeper

Investing glossaryUnderstand the conceptsStock researchApply it to real names

A drawdown exposes the risk. What could cause it?

Yield Theory members get source-linked catalysts, risks, and written thesis breakpoints—not just a recovery percentage.

Read the complete investment thesis →

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