Definition, Meaning & Synonyms
drawdown
noun
/ˈdrɔːdaʊn/
Definition
A drawdown refers to a reduction in the value of an investment, typically indicating a decline in the net asset value from its peak.
Examples
- After several months of strong performance, the fund experienced a significant drawdown during market volatility.
- The drawdown in the project budget led the team to reconsider their spending strategies.
- It is crucial for investors to be prepared for potential drawdowns in their portfolios.
Meaning
In financial terms, a drawdown often represents the amount of capital loss an investor may face from a high point to a low point, before a recovery.
Synonyms
- decline
- dip
- reduction
- decrease
