New answers tagged stock-analysis
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Now, hypothetically, assume that the U.S. produces no GDP growth at all in the future due to population declining. Would this mean that the stock market (index) would also stay close to the same level in the long term, making it a bad investment?
You are forgetting several key things.
Firstly, many companies in US stock market are actually internationally ...
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Theoretically, the growth in stock prices is highly dependent on GDP. Stock prices are largely determined by their earnings and earnings are largely dependent on the economy. If the economy is good, people buy more of a product which increases earnings and thus decreases the P/E ratio which makes the stock more attractive to investors which causes people to ...
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Only at most partial truth.
People often use this saying to justify not selling stocks of companies that have lost their competitive advantage. If you hold on to such stocks too long, eventually the companies can go bankrupt, or at least the ownership will change so that creditors will own the company in its entirety due to debt restructuring. So, in that ...
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Re "patience often pays out", do you happen to remember (most recently) 2008-09? Or any other significant stock market decline? If you sold your holdings whenever there was a significant market decline, I doubt that you would be doing very well.
As for whether it's not a loss until you sell, that depends on how you look at it. From the standpoint of ...
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There is a lot of truth in that, especially where taxes are concerned. You can write off a loss against capital gains and if you don't have any gains, you can reduce your income by $3000 a year until you recover your loss.
Investors will often hold on to an unrealized loss until they have a reason to sell and then it becomes a realized loss.
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It’s not a loss until you sell.
In my opinion, thats completely not true. Let me take the example to the extreme. You bought one stock. 1000 shares ABC at $50. Now it’s at $5.
Then you see a new incredible investment. XYZ at $50. Can you still buy 1000 shares of XYZ? no. You can only buy 100 shares. (if you sell the first investment) Otherwise you can’t ...
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"It's not a loss until you sell is a rationalization that people use to negate reality.
An UNREALIZED loss results from holding onto an asset after it has decreased in price, hoping that asset price will eventually recover. Selling the stock converts it to a REALIZED loss.
For example, if your 100 shares of a $50 stock goes to $10, you have lost money. ...
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Am I missing something?
Yes...
Any losses -- or gains -- are all (metaphorically, in 2019) just scribbles on a ledger sheet until you actually sell the asset.
That's because you can't spend shares of stock (or bonds, or Beanie Babies, or your house or anything else you buy which you hope will appreciate in the future).
For example, Bill Gates does not ...
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Your money is lost when you buy a stock, and gained when you sell it. In the sense that it is no longer liquid or legal tender in exchange for other goods.
You should think of investing in this way so you are only ever willing to invest what could be lost forever (although it is extremely unlikely a diversified investment would lose all or even most of its ...
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