What exactly does 'Maximum Drawdown' mean?

Maximum Drawdown (MDD) is the largest percentage drop from a portfolio's peak to its lowest trough before a new peak is achieved. It measures the absolute risk of loss over a period.

How can I reduce my portfolio's drawdown?

Diversification is the best defense. Adding non-correlated assets like Gold or Debt to an equity portfolio significantly reduces the depth of drawdowns during market crashes.

Why is recovery time important?

Recovery time tells you how long you would have been 'underwater' (having less money than you started with). This is crucial for short-term goals.

Portfolio Drawdown Simulator

Stress-test your investments by simulating peak-to-trough declines and recovery paths from historical market crashes.

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Documentation

Quick Summary: Portfolio Drawdown Simulator

A Portfolio Drawdown Simulator helps investors visualize the 'worst-case' historical scenarios for their asset allocation. By calculating the maximum peak-to-trough percentage decline (e.g., a 30% drop during COVID-19) and the subsequent recovery time, you can better align your investments with your actual emotional risk tolerance in India.

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Regulatory Disclaimer

Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

Consult a SEBI-registered IA or CA for personalised advice.

9 out of 10 traders in F&O incurred net losses (SEBI 2023). Tax estimates based on IT Act 2025. Trezoriq is not liable for financial decisions based on results.