>>Sorry for the pain to those who have been long for a long while, but unless you sold, you haven't lost money.<<
Oh really? In fact one has lost. This idea that only if one sells does one "lose" is nonsense.(Note please that I am critical of the idea not the author of the idea).
An investor has many choices. If an investor who owns TYC bought it at say $40 per share, he/she has a choice to either hold it or sell it and put the money in a more attractive investment. There are advantages to this. Not only will he/she get a tax benefit from the loss taken, but if another investment moves higher faster, then the cash management decision to sell would be a superior one.
You are where you are. If your stock is worth $28 and you own 1000 shares bought at $40, you have today $28,000. Since you are at point A.(today) and you want to get to point B.(the future), you have to ask yourself which investment will get my $28,000 to say $50,000 faster? The fact that you are in a losing position does not change the fact that you only have $28,000 today and a choice as to how to employ those funds.
Myself, if I thought I could make more money putting the $28,000 in say, AMAT, or say CSCO(rather than holding TYC) over a future investment holding period, it would be stupid for me to hold on to this silly investment just so that I don't have to take a loss. Take the loss, it will provide more than one year of tax benefits and meanwhile you can put the only money available NOW to work for you.
Preaching done,
HiTech |
