The page behind this dialog is live. Create a free account or sign in and you'll land right back on it.
Forward returns from extreme drawdowns
Drawdowns of 30%+ are rare and concentrated: 1929-32, 1937, 1973-74, 2000-02, 2008-09, 2020. These represent genuine economic crises or systemic dislocations. Buying at these levels has produced exceptional long-term returns in every case.
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Every instance of a -30% drawdown since 1929 has been followed by positive 5-year returns, including those that ultimately fell further (2008 went to -57%).
Advisors who systematically rebalanced into equities at -30% in 2008 and 2020 delivered transformative client outcomes. This is where advisory value is proven.
The bottom is only identifiable in hindsight. Systematic deployment at -30% captures most of the recovery even if the market falls further before reversing.
Drawdowns this deep are where a staged-deployment rule matters most: consider committing rebalancing capital in fixed installments at pre-set levels rather than trying to call a bottom that is only visible in hindsight. Every -30% episode on record was followed by positive 5-year returns — including those that first fell further.