What is your estimated maximum drawdown your net wealth has experienced so far?
E.g. if the richest you’ve ever been was 100k and your net wealth dropped back to 80k (before hopefully recovering), you had a 20% drawdown
but what if max % drawdown wasn’t at max net wealth? my biggest drawdown was during dotcom crash, but i had very little assets then compared to now.
Fair enough, not for tiny amounts. Say anything above 50-100k CHF equivalent
Ie doesnt have to be max wealth overall. Just max wealth at the time
Do you also include 2nd pilar in your Net worth?
I am including it so it smooth the trauma.
I was started to be invested into equity from 2012 so no major crash except Covid and Trump tweets.
This is just by end of month values.
Increase: +20% in May 2026
Decrease: -12% in July 2026
But that is month to month, I gained about +7% on 30 July, so the if you look at peak to trough it would have been around -20%.
This is including total wealth. If we are just talking about stocks then those numbers would be quite a bit bigger (+46% in May 26 and -23% in July 26, though again that would have been more like -30% if counted peak to trough rather than month to month).
I think this is a good mental trick. I look only at my stock portfolio which makes it much more volatile. I think it is because it is the most visible. I have an app on my phone which shows minute by minute moves.
Whereas for things like Pillar 2 you probably don’t see that often, maybe once per year in a statement. Same for value of real estate.
NW - barely 7% m2m (back in 2020)
Equity - probably 20+%
Thanks all. The reason I was asking- I had the hypothesis that a lot of the FIRE community hasn’t been through a real stress test yet. And with that might be selling in a true painful drawdown.
But looks like that hypothesis doesn’t hold. At the same time, there might be bias, because anyone who has been wiped out or called it quits at the lows, might not be on this forum anymore. Time will tell
If you have your equity asset split into multiple brokers (3 for me) + 5 LPP3 accounts,you cannot monitored them easily nor liquidate your position that quickly. I have to check my aggregated spreadsheet to gget the view of the drawdown.
During Covid the painfull part was not the drawdown in it’s own but more the noise generated by all the news and when to invest your cash reserve if you have some …
It is a good plan to define how much you will invest when global indexes becomes red (xxk chf at -15%, xxk chf at -30% …). It can help you to pull the trigger and rebalance your bond allocation.
Well, the current situation could also be a test. On the one hand, we have the crazy AI boom, big valuations, big debts, increasing energy costs, war in iran etc. one could easily argue for higher interest rates triggering a recession and a big crash.
On the other hand you could equally argue for continued loose fiscal policy combined with a dovish fed that will print and carry out operation twist in coordination with Treasury to control interest rates across the yield curve. In such a case you could argue for even crazier asset prices maybe offset a bit by lower USD.
The other question is what you will sell to make such an investment.
The maximum drawdown is one thing, the recovery time (how long until you get back to ATH) another.
For me: 2021-12 to 2024-02 (-27% in 2022-12), so 27 months (all in retirement)
I didn’t lose sleep, but it wasn’t fun, either.