# Case: the "market is down 30%" message

> Write the in-app message for a deep fall and decide when it should appear.

- Course: [Long-Term Investing: Index Funds, Risk and Your Own Behavior](https://productovi.com/courses/long-term-investing.md)
- Module: How much can you lose, and for how long?
- Lesson 8/32, ~33 min
- Source: https://productovi.com/courses/long-term-investing/case-down-30

## The message nobody wants to need

**Grace:** Last March task at Zapas. As the PM you've seen a bad year, a 45% drawdown and how long windows behave. Today you design the message users get when the world fund is down 30%.

**Ethan:** My draft: "Stocks are on sale! The bottom is in, now's the time to buy more. Markets always come back within a year." Upbeat, right? Nobody leaves an upbeat app.

**Grace:** Every sentence in it is a promise we can't keep. Before you rewrite it, let's gather what we already know.

**Sofia:** Let me list what March gave us first. A typical bad year of −4.4% and a worst year of −30.0%.

**Grace:** Plus the standard deviation behind them, 14.7 points. Then the drawdown: 45.4% deep, 72 months under water, 11 years after inflation. And rolling windows: 19.4% of five-year periods lost buying power, none of the twenty-year ones.

**Ethan:** That's a lot of numbers for one notification.

**Grace:** Which is why we choose. A user at −30% needs two or three of them, not a lecture. The rest stays one tap away. Now the chart, with a line at −30%: that's where a trigger would sit.

**Tessaro World below its peak, years 20–27**

| Month of the window | Drawdown |
| --- | --- |
| 1 | 0 |
| 2 | 0 |
| 3 | -1.4 |
| 4 | 0 |
| 5 | 0 |
| 6 | 0 |
| 7 | 0 |
| 8 | -0.8 |
| 9 | 0 |
| 10 | 0 |
| 11 | 0 |
| 12 | 0 |
| 13 | -3.1 |
| 14 | -9.1 |
| 15 | -5.1 |
| 16 | -13 |
| 17 | -17 |
| 18 | -11.1 |
| 19 | -14.5 |
| 20 | -22.3 |
| 21 | -19.8 |
| 22 | -24.4 |
| 23 | -18 |
| 24 | -22 |
| 25 | -27.7 |
| 26 | -21.6 |
| 27 | -30.3 |
| 28 | -33.4 |
| 29 | -26.5 |
| 30 | -32.8 |
| 31 | -37.2 |
| 32 | -34.8 |
| 33 | -41.2 |
| 34 | -43.2 |
| 35 | -40.6 |
| 36 | -45.4 |
| 37 | -38.9 |
| 38 | -35.2 |
| 39 | -38.1 |
| 40 | -32.8 |
| 41 | -31 |
| 42 | -32.7 |
| 43 | -30.2 |
| 44 | -29.1 |
| 45 | -31.6 |
| 46 | -30 |
| 47 | -29.3 |
| 48 | -30.1 |
| 49 | -31.5 |
| 50 | -30.2 |
| 51 | -30.6 |
| 52 | -24.9 |
| 53 | -23.3 |
| 54 | -22.5 |
| 55 | -19.8 |
| 56 | -17.7 |
| 57 | -20.7 |
| 58 | -21.1 |
| 59 | -18.7 |
| 60 | -17.5 |
| 61 | -19.1 |
| 62 | -23 |
| 63 | -21.1 |
| 64 | -18.3 |
| 65 | -21.1 |
| 66 | -18.8 |
| 67 | -18.8 |
| 68 | -17.6 |
| 69 | -13.5 |
| 70 | -9.2 |
| 71 | -4.5 |
| 72 | -5.1 |
| 73 | -6 |
| 74 | -2.3 |
| 75 | -7.4 |
| 76 | -7.2 |
| 77 | -4.6 |
| 78 | -7.9 |
| 79 | -13.1 |
| 80 | -13 |
| 81 | -11.2 |
| 82 | -5.1 |
| 83 | -3.4 |
| 84 | 0 |
| 85 | 0 |
| 86 | 0 |
| 87 | -1.6 |
| 88 | -2.4 |
| 89 | -4.7 |
| 90 | -1 |
| 91 | -1.5 |
| 92 | -8.9 |
| 93 | -8.2 |
| 94 | -6.1 |
| 95 | -7.5 |
| 96 | -7.8 |

*Percent below the highest level so far, nominal dollars. The −30% line is the proposed trigger. Synthetic data.*

**Dataset (CSV):** [Tessaro World crash window, 96 months (years 20–27)](https://productovi.com/datasets/long-term-investing/case-down-30/crash_window_monthly.csv)

**Sofia:** The line is first crossed in month 27, fifteen months after the peak.

> **Exercise:** In the crash window, the peak is month 12. In which month does Tessaro World first fall 30% or more below it?

> **Exercise:** Once Tessaro World was 30% below its peak, the worst of the crash was already over.

## What goes into the message

**Ethan:** Fine, no bottom call. But I still want them to stay.

**Grace:** So do I. The way to keep them is honesty they can check. Four parts: honest numbers, their own horizon, no promise, and the one thing to avoid.

![The message fires when the world fund is 30% below its peak and has four parts: honest numbers, the user's horizon, no promise of a date or a bottom, and avoiding a panic sale.](https://productovi.com/courses/long-term-investing/diagrams/m2-l4-down-30-message.png)

*Calm, specific and short beats cheerful.*

**Grace:** The action to avoid matters most. A user who sold in month 27 locked in −30.3%. One who held to month 84 was back at the old peak: 119.77 against 80.8 at the trigger, +48.2% from there.

> **Exercise:** Which elements belong in Zapas's "down 30%" message? Choose all that apply.

**Sofia:** Users will also read "down 30%" as "30% to win back".

**Grace:** They will, and it's wrong in the comforting direction. The climb back from −30% is steeper than thirty. Put the real figure in the message, plainly, so nobody is surprised by how long it takes.

> **Exercise:** A user's world fund is exactly 30% below its peak. What gain does it need to get back to the peak, in percent, to one decimal?

> **Exercise:** Which draft should Zapas send when the world fund is 30% below its peak?

**Ethan:** OK, I'm convinced. But the push notification is one line. What goes there?

**Grace:** The push only has to open the message calmly, without a number that sounds like an alarm. Try it, then write the whole thing.

> **Exercise:** Write the push notification that opens the "down 30%" message: a title of up to about 8 words and one short line, calm and honest, with no promise.

**Ethan:** And when the market is back at its peak, do we send a "we're back" message?

**Grace:** A quiet one, in the same tone, without a victory lap. Otherwise the next fall message will read like a sales pitch, and users stop trusting both.

## Write the message

**Grace:** Now the full version. Use the crash data, say when it fires, and keep it under about 120 words for the user-facing part.

> **Exercise:** Write Zapas's in-app "market is down 30%" message and its trigger rules, using the crash data.

> **Key ideas**
>
> - Trigger the message on the drawdown of the fund the user holds (about −30% from the peak), once per episode; in our crash it would have fired first in month 27.
> - Four parts: honest numbers (deepest fall 45.4%, 72 months back to the peak), the user's horizon, no promise, and one action to avoid.
> - Nobody knows the bottom: after −30% the fall went on nine more months, to −45.4%.
> - From −30% a fund needs +42.9% to recover; a panic sale in month 27 locked in −30.3%.
> - Calm, specific and short beats cheerful; a push only opens the message.

> **Educational, not advice**
>
> This course explains how long-term investing works; it never tells you what to buy. Investments can fall, and you can get back less than you put in. Check the current rules where you live or ask a licensed professional.

**Grace:** That's March done: users can now see how far and how long they could fall. In April we ask why one fund should hold thousands of companies.

- Previous lesson: [Holding period and the chance of a loss](https://productovi.com/courses/long-term-investing/holding-period.md)
- Next lesson: [Company risk vs market risk: how many holdings are enough](https://productovi.com/courses/long-term-investing/company-vs-market-risk.md)

---
Productovi Learning. Free, no sign-up needed to read.