A maximum drawdown (MDD) measures the maximum fall in the value of the investment. This is done by calculating the difference between the value of the lowest trough and that of the highest peak (before the decline). By measuring the difference between the highest peak and the lowest trough values of an investment, MDD shows the volatility of an asset’s value in the past. This provides a fairly accurate way of forecasting future price movements. A low MDD value indicates a lower degree of risk, and vice versa.
Rule of 72
The Rule of 72 is a formula that calculates how long it'll take for an investment to double in value,...
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