Question 1

How do I calculate percentage change in portfolio value?

Accepted Answer

Portfolio percentage change = ((New Value - Old Value) / Old Value) × 100. Example: portfolio grew from €10,000 to €11,500 = ((11,500 - 10,000) / 10,000) × 100 = 15% gain. For a loss: portfolio fell from €10,000 to €8,200 = ((8,200 - 10,000) / 10,000) × 100 = -18% loss. StrategyIndex.io's Percentage Calculator automates these calculations and also handles percentage of total, percentage increase/decrease, and reverse percentage calculations.

Question 2

How much does a 50% loss require to break even?

Accepted Answer

A 50% loss requires a 100% gain to break even. This is because losses and gains are asymmetric: if your €10,000 portfolio loses 50%, you have €5,000. To recover to €10,000, you need to double it — a 100% gain. This is why avoiding large drawdowns is so critical in investing. Max Drawdown is one of the most important risk metrics — a 70% drawdown requires a 233% gain to recover. Tactical strategies like GEM aim to limit max drawdowns to reduce this recovery burden.

Question 3

What is the formula for CAGR (Compound Annual Growth Rate)?

Accepted Answer

CAGR = (Ending Value / Beginning Value)^(1/Number of Years) - 1. Example: portfolio grew from €10,000 to €19,487 over 7 years = (19,487/10,000)^(1/7) - 1 = 1.0996 - 1 = 9.96% CAGR. CAGR is the smoothed annual return rate that would produce the same final result with consistent growth each year. It eliminates volatility from the return figure, making it useful for comparing different investment strategies.

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