A drawdown is a drop in value - of a stock, a fund, or your own portfolio. It is often accompanied by a knot in the pit of your stomach and a feeling of anxiety. Our aversion to a drawdown is what most of us mean when we think of risk. We can read all we want about statistics, but it's a sharp and prolonged drawdown that most of us fear. It's a natural reaction; we're only human.

But drawdowns are a fact of life. They have occurred in every market from the beginning of time, even in 'riskless' assets like U.S. T-Bills. So in this section we want to talk about drawdowns. It is the drawdowns that make us behave irrationally, that make us do things we later regret, like selling out at what ended up being the bottom of the market so we could put our money into cash. An investor needs to know in advance if the investment they're about to make is going to be suitable for their temperament. For that, they need to know about drawdowns.

If you already know the various types of drawdowns, skip this button and read on, otherwise start here:	Show us the Martial Capital funds drawdowns compared to the market:
How to reduce drawdowns in your own portfolio: