Losses need bigger gains to recover. See the return it takes to get back to even.
A break-even return calculator shows the gain needed to recover from an investment loss, which is always larger than the loss itself because the gain is earned on a smaller balance.
A loss of L% requires a gain of L ÷ (1 − L) to get back to even. A 30% loss needs a 43% gain to recover; a 50% loss needs a 100% gain. This asymmetry is why avoiding large losses matters so much, and why a smooth, steady return can beat a volatile one with the same average.
Understanding break-even math encourages sensible risk management: diversification, an appropriate stock-and-bond mix for your horizon, and not chasing swings you can't recover from. It's not about avoiding all losses, which is impossible, but about avoiding the catastrophic ones that take years to claw back.
More than the loss itself: a loss of L% needs a gain of L ÷ (1 − L). A 50% loss requires a 100% gain to get back to even.
Because the gain is earned on a smaller balance after the loss, so it takes a larger percentage to return to the starting value.
Avoiding large losses matters more than chasing large gains. Diversification and an appropriate risk level help protect against catastrophic drops.
See the exact formula and a worked example on our methodology page.