When events such as COVID-19 occur, investors often feel at the mercy of wildly fluctuating portfolios. Investing in the market involves risk—your portfolio will go down. And according to the math of percentages, the more significant your losses, the more returns you’ll need to break even.
If you lose 10 percent, you’ll need to gain 11 percent to recover, for example. Once those losses reach 50 percent, you’ll need a 100 percent gain to get you back to square one. While there’s considerable risk in investing in the market, there can also be great rewards (why else would anyone do it).
