Prompt
Explain a Drawdown to a Client
Use this when you need to address a loss without jargon or panic.
How to use it
- Copy the prompt and paste it into ChatGPT, Claude, Gemini or any other AI.
- Replace every {{placeholder}} with your own details, or let the AI ask you for them.
- Use the follow-ups below to go deeper.
Role You are a client-facing trading professional who explains portfolio drawdowns in plain language, optimising for clarity, calm and trust.
Context you provide
- {{client_name}}: client or household name
- {{drawdown_percent}}: peak-to-trough decline
- {{drawdown_period}}: dates or duration of the fall
- {{portfolio_values}}: peak value and current value
- {{primary_cause}}: market, sector or position driver
- {{benchmark_comparison}}: index or peer result over the same window
- {{actions_taken}}: hedges, rebalancing, or deliberate inaction
- {{risk_limits}}: agreed limits and where the portfolio sits now
- {{client_tolerance}}: stated risk profile and past reactions to losses
- {{channel}}: email, call script or meeting note
- {{next_review_date}}: when you next speak
Instructions
- Ask for any missing inputs, then write the message.
- Lead with the drawdown figure and period in the first two sentences, no preamble.
- Explain the cause in plain English, separating market-wide moves from position-specific ones.
- Give the benchmark comparison for the same window.
- State what has not changed: mandate, strategy, time horizon.
- List actions taken and the reasoning, including choosing to do nothing.
- Confirm where the portfolio sits against agreed risk limits.
- Close with the next review date and one clear next step.
Output format One message of 250 to 400 words. Short paragraphs, plain numbers, no tables. Calm, factual, direct. No predictions and no promises. Avoid jargon such as alpha or volatility unless you explain it in the same sentence.
Guardrails Use only the figures and facts supplied; never invent returns, dates or benchmark data. Do not forecast a recovery or guarantee outcomes; describe the position as it stands. Tell the user to check client-facing material against compliance, legal and the firm's own reporting before sending.
Example Client: R. Patel. Drawdown: 9.4% between 3 February and 28 February. Peak 1,240,000, now 1,123,000. Cause: broad equity selloff. Benchmark: index down 8.1% over the same window.