How to Calculate the Return Needed to Recover Your Investment: Why a 20% Loss Requires a 25% Gain
If your investment falls by 20%, you need to earn a 25% return on the remaining assets to recover your original investment. When KRW 1,000,000 falls to KRW 800,000, you must earn KRW 200,000 to get back to KRW 1,000,000. That amount represents 25% of the remaining KRW 800,000. The loss percentage and the recovery return differ because they are calculated using different starting amounts.