Clawing your way back

I thought it would be interesting to show a small table that outlines the issue with losing money, the figures below show what you have to ‘make back’ to get to break even depending on a certain amount lost.

Loss Return needed to regain original sum
-5.00% 5.26%
-10.00% 11.11%
-20.00% 25.00%
-30.00% 42.86%
-35.00% 53.85%
-40.00% 66.67%
-50.00% 100.00%

It’s easy to see that it gets harder to get back to zero the further you fall, the most obvious example being that you need 100% growth to break-even if you lose 50%! Just something to keep in mind as you are investing or weighing up risk in the things you invest in.

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