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Reply #37: Only if you sell the stock [View All]

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Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010)

Kelvin Mace

(1000+ posts) Send PM | Profile | Ignore

Fri May-21-10 12:43 AM
Response to Reply #11

37. Only if you sell the stock

and realize the loss.

If I have 100 shares of Microsoft at $100 a share and during the year MS drops to $50, I have lost NOTHING unless I sell. If I then buy another 100 shares in the course of the year at $50 a share, and the stock returns to $100, I know own 200 shares I paid $75 for.

Long term investment for retirement means buying a little every month for decades. With that plan, price drops mean cheaper stock. Of course if the company is moving in a direction (long term) that threatens growth, then you look for a better company to invest in.

This strategy has made Warren Buffet a very rich man.

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