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Any loss sustained in one’s portfolio requires a greater return to get back to the original starting point. A twenty percent loss will require a twenty five percent return on remaining principal to get back to the starting value. For example, look at these two hypothetical situations first from a rebounding market and a then from a declining market.

Rebounding from a market decline: $100,000 starting value - 37.6% cumulative decline You will need a 60% return to get back to $100,000

Approaching retirement, look what happens when withdrawals are taken during a market decline: $100,000 starting value 5% withdraw rate each year for retirement - 37.6% cumulative decline. You will need a 87% return to get back to $100,000 if you take a 5% withdraw.

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