Recovery calculator

Recovery calculator: how far does a fall have to recover?

A fall and the rise needed to undo it are not the same size. Lose 20% and you need a 25% rise just to get back to where you started. Put in the size of a fall and see the rise it needs, and roughly how long that could take.

How far does a fall have to recover?

A fall and the rise needed to undo it are not the same size. Lose 20% and you need a 25% rise just to get back to where you started. This is the percentage maths behind why a fall is so hard to undo.

Your numbers

%
£
% a year
Used only to estimate how long the recovery takes. Real recoveries are never this smooth.

Rise needed to get back to even

0%

Value after the fall£0
Gain needed to recover£0
Time to recover at 5% a year0 years
FallRise needed

How to read this

Selling after a fall turns a loss on paper into a real one and takes you out of the recovery, and missing the recovery is what does the lasting damage. That's the mechanism behind the behaviour gap. Past recoveries are no guarantee of future ones.

How it works

Why a fall needs a bigger rise

Percentages work on whatever you have at the time. After a 20% fall, £10,000 becomes £8,000, and a 20% rise on £8,000 only gets you to £9,600. Getting back to £10,000 needs £2,000 on £8,000, which is 25%.

01

The gap widens

The deeper the fall, the bigger the rise it needs: 30% needs about 43%, and a 50% fall needs a 100% rise.

The table under the calculator shows the pattern.

02

What it means for an investor

Selling after a fall turns a loss on paper into a real one and takes you out of the rise that would have repaired it.

I set out the pattern in the behaviour gap.

03

The time to recover

The time here assumes a steady rate every year, which real markets never deliver. Some recoveries have taken months; others, such as UK shares after 2000, took years.

Past recoveries are no guarantee of future ones.

Questions

Common questions

Quick answers about the figures. For your own circumstances, gov.uk and your provider have the details.

Does adding money during a fall speed up recovery?

Yes. New money bought at lower prices rises further as the market recovers, so a pot that keeps receiving contributions usually gets back to even sooner than the figures here, which assume nothing is added.

Should I cash in my ISA when markets fall?

That’s your decision. I set out what to weigh first in should you cash in your Stocks and Shares ISA?.

Read next

The behaviour gapWhy investors earn less than fundsShould you cash in your ISA?What to weigh firstThinking in years and decadesThe long view

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New to ISAs?

Read the sixteen articles in order.

Getting Started takes you from the basics to opening your ISA, then the principles that keep you invested and how wealth builds over time.

Go to Getting Started

All results are illustrations, not forecasts, and not financial advice. They assume steady rates that real markets never deliver. The value of investments can go down as well as up, and you can get back less than you put in. Allowances, tax rates and ISA rules can change, so always check gov.uk for the current figures.

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