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To: Alomex who wrote (18445)9/24/1998 1:41:00 PM
From: Andrew Danielson  Read Replies (1) | Respond to of 213177
 
<< You don't lose money by being overly conservative, but you do by being overly aggressive).>>

While I agree that being overly conservative on estimates can temper emotional involvement with a stock or investment, I disagree with your above statement.

People always talk about gains or losses in terms of concrete dollars, forgetting the concepts of future purchasing power and lost opportunity cost. When you're overly conservative and put your money in treasury bonds forever, you're not "losing" any concrete money. However, while the stock market continues with its superior gains long-term as you sit on the sidelines being "safe", you have not only compromised your future buying power but have also lost out on huge gains.

Aggressiveness can be dangerous, but so can being conservative.

Andrew