Break-even return?

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Mar 4, 2009 6:00 pm

 A person who's down 30% in their portfolio needs a 43% return to break even.

 
What's the formula used to determine that required return? (This is not a trick question. I'm curious as to how to calculate it.)
 
Mar 4, 2009 6:02 pm

This can't be serious.  (1 divided by .7) minus 1.


 
Mar 4, 2009 6:12 pm

You want to know something even cooler Borker Boy?

 
If you have been taking 5% withdrawals from your account and you lose 30%, you need 85% to get back to even.  It makes 43% look like a dream.