Portfolio drawdown
What it shows
The largest historical drop in portfolio value from a peak to the next trough (over the collected snapshots). Shows how deep drawdowns have been so far. Historical, not a forecast.
How to read it
Drawdown describes the worst episode so far, not what comes next. The shorter the snapshot history, the less reliable the number.
Parameters
- Max drawdown
- The deepest peak-to-trough drop, in percent. A negative value.
- Positive reading: Shallow (near 0%): the portfolio avoided large slides.
- Negative reading: Deep: a large historical slide from the peak; recovery needs a bigger move up.