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Break-even return?

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Mar 4, 2009 11:00 pm

Borker Boy

Joined: 2006-12-10Offline

 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 11:02 pm

Sam Houston

Joined: 2008-12-02Offline

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

 
Mar 4, 2009 11:12 pm

snaggletooth

Joined: 2007-07-13Offline

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.