For many people, the drawdown is simply the act of withdrawing money from an investment. However, the term can also refer to the point at which an asset's value decreases. A stock market crash or a sudden dip in the value of a currency are both examples of a drawdown. In investing, it's important to be aware of both the possibility and the effects of a drawdown. Protecting your assets from sudden market changes is essential to preserving your wealth. At the same time, recognizing when a drawdown has occurred can help you take advantage of opportunities to buy low and sell high. Understanding the concept of a drawdown is an important part of being a successful investor.