drawdown
The decline in value from a peak to a low point.
A drawdown measures how much an investment or portfolio has fallen from its highest value before recovering. If a stock reaches $100, then drops to $70, that’s a 30% drawdown. The term is commonly used to describe temporary losses during market downturns or periods of poor performance.
Drawdowns matter because they show real losses investors experience and how long money stays underwater. A large drawdown—say 50%—means you need a 100% gain just to break even. When you see drawdown mentioned in headlines, it typically signals that an asset or fund is underperforming, which investors watch to assess risk and decide whether to hold or sell.
Written once as a plain-English reference, not as advice. Nothing here is a recommendation to buy or sell anything.