# Drawdown

*Risk & Portfolio — Finicade finance glossary*

The drop from a portfolio's peak to its subsequent trough — how deep the hole got before recovery. A strategy's worst drawdown often matters more than its average return, because it's the pain investors actually have to sit through.

**Related terms:** [Volatility](https://finicade.com/glossary/volatility), [Value at Risk (VaR)](https://finicade.com/glossary/value-at-risk), [Risk Tolerance](https://finicade.com/glossary/risk-tolerance)

Source: https://finicade.com/glossary/drawdown