Drawdown – The Metric Pros Watch Closely

CAGR tells you your average return. 📉 Drawdown tells you what it cost to get there. 🔻 Max Drawdown = largest drop from peak to trough. A smoother 12% return with small dips is often better than a flashy 18% return with 50% crashes. If your capital takes a deep hit, recovery isn’t just emotional—it’s mathematical. Protecting downside is the true mark of a professional investor.