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Glossary · PSX term

Drawdown.

A drawdown is the drop from an investment's peak value to its lowest point before a new high.

Definition

It shows the worst loss an investor would have endured over a period, which tests emotional and financial staying power. A large drawdown takes a bigger percentage gain to recover from.

Worked example

A portfolio falling from Rs. 1,000,000 to Rs. 700,000 has suffered a 30% drawdown.

Related on PSX Clarity

Maximum drawdown

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