Drawdown Recovery Calculator
Calculate how long it will take your portfolio to recover from market drawdowns. This tool helps you understand the impact of market declines on your investments and how regular contributions can accelerate recovery time.
Portfolio Information
Contribution Information
Drawdown Recovery Analysis
Drawdown Amount
$0
Loss from peak value
Portfolio After Drawdown
$0
Remaining portfolio value
Recovery Time
0 months
With regular contributions
Contribution Impact
0.00%
Recovery time reduction
Recovery Timeline
Time
Portfolio Value
% of Original
Initial
$500,000
100%
After Drawdown
$0
70.00%
Recovery Comparison
Without Contributions
0 months
With Contributions
0 months
Time Saved:
0 months
Contribution Impact Analysis
Total Contributions Until Recovery
$0
Recovery Time Reduction
0.00%
Contribution Percentage of Recovery
0.00%
Understanding Drawdown Recovery
A portfolio drawdown occurs when your investment value drops from its peak. This calculator helps you understand how long it might take to recover from such a loss, and how your ongoing contributions can accelerate the recovery process.
Key insights:
- Recovery time: Without contributions, recovery depends solely on your investment returns. The mathematical formula is: Recovery Time = ln(Original Value / Value After Drawdown) / ln(1 + Annual Return Rate)
- Contribution impact: Regular contributions can significantly reduce recovery time. The larger and more frequent your contributions relative to your portfolio size, the greater the impact.
- The power of consistency: Even modest contributions made consistently can have a substantial effect on recovery time, especially for larger drawdowns.
Remember that market returns are not consistent year to year, and actual recovery times may vary from these projections. This calculator assumes a constant annual return rate, which is a simplification of real-world market behavior.