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natemans · Oct 24, 2011, 03:37 PM

I have this question. If I buy 100 shares of a stock today for $10 each, total investment of $1000, and in 6 months the price of the stock goes from $10 to $1, then that would mean I lost $900? And people would be telling me to sell to keep from losing it all. But what if the stock price returned to $10 in another 6 months, would I have broken even with my investment?

Fr_Chuck · Oct 24, 2011, 04:04 PM

that is true, I have many stocks that lose and gain value, but I believe over long term they will gain,

that is why of course it is often best on smaller investors to buy a group of stocks in a fund, to share the risk amount various types. Currently over seas ( I am in the US) are doing well in developing nations, but they are always a risk in some nations.

But why did the stock fall to one dollar, is this a sign of the end, and you end up losing that 1 also if they go broke?
Or have you investigated and feel a new management or new trends will turn them around.

many people jump in and buy when things are down.

ScottGem · Oct 24, 2011, 04:08 PM

The value of a stock can be counted towards your net worth. But to determine gain or loss the stock has to be sold. This is true of any asset. Gain or loss is based on the sale price vs the basis price.

natemans · Oct 24, 2011, 04:36 PM

it was hypothetical. I just wanted to be sure I wasn't missing something. I mean, if I lost significant % value of a stock and I can see from past performance that it fluctuates, then I might be willing to let the stock just sit there until it returned to where it was.

But people that trade for a living, I can see that they would want to stop losing money in a stock if they have a lot of money tied up into it and could be using on other stocks. But for the kids in high school, I don't see why they wouldn't just let it ride when they only have $1000 in the market.

ScottGem · Oct 24, 2011, 05:19 PM

People who trade in the market don't necessarily hold stocks long term. There are many ways to make money trading stocks. Options, Short calls, and more. I don't pretend to understand it all.

Other people invest long term.