At the time that I am writing this, global stock markets which are open for trading are markedly higher with gains ranging from 4% to 10% in some cases. However, when a gain follows a long stretch of losses it’s important to put this into context – it’s not as rosy as one would think (although certainly welcome).
50% = 100%
Here’s the best example: Let’s say your portfolio is down 50% – it was worth $100,000 and is now worth $50,000. Just to get back to where you were would require a 100% gain – your $50,000 would have to double to get back to $100,000.
Here’s a chart which shows the recovery you need after suffering from various levels of declines: