drawdown
/ˈdrɔːdaʊn/
the peak-to-trough decline in a portfolio's value during a specific period
drawdown in a sentence
“The fund's maximum drawdown of 35% during the crash tested investors' conviction.”
Origin of drawdown
Draw (Old English dragan) + down — the amount value is drawn downward from peak
Related Words
risk-reward ratio
the expected profit of a trade compared to its potential loss, used to evaluate trade quality
stop-loss order
an order to sell a security automatically when it reaches a specified price, limiting downside loss
limit order
an order to buy or sell a security only at a specified price or better
dollar-cost averaging
investing a fixed dollar amount at regular intervals regardless of price, reducing the impact of volatility
rebalancing
adjusting a portfolio back to its target asset allocation by buying and selling assets
alpha
excess return on an investment relative to the return of a benchmark index