• The financial crisis is now over and the aberrational financial values created by the manipulated market are ending.
• For a decade there has been a great deal of money around at real prices below zero. This era is over.
• Increased demand for funds at a time when the growth in supply is easing will drive money costs higher and financial values lower. This is about as fundamental as it gets.
• To argue that a shift in money availability; a shift in real interest rates; and a shift in the value of the dollar; have no fundamental impact is simply folly."

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Originally posted by sjtill:
Jim Allen's advice earlier was the best. You haven't lost a penny on your investments unless you actually sell them.

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Originally posted by heathtx:

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Originally posted by sjtill:
Jim Allen's advice earlier was the best. You haven't lost a penny on your investments unless you actually sell them.

An oft repeated line, but wrong. The fact is the value of your account has gone down. The number of shares you own is the same, but the value is down.

Don't believe me? Give your buddy the amount of money before his investment value went down and you take the current value.

Some investments never get back to their previous highs.

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Originally posted by JALLEN:

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Originally posted by heathtx:

quote:

Originally posted by sjtill:
Jim Allen's advice earlier was the best. You haven't lost a penny on your investments unless you actually sell them.

An oft repeated line, but wrong. The fact is the value of your account has gone down. The number of shares you own is the same, but the value is down.

Don't believe me? Give your buddy the amount of money before his investment value went down and you take the current value.

Some investments never get back to their previous highs.

What does that have to do with anything? You aren’t likely to sell at the high anyway.

The “value” of the shares we own in Realty Income is down to $47.56 at the close. The high some months back was $70.10 or so. Given the number of shares we own, that’s a bunch of money. Do I care? Nope. Do I wish I had sold back when it was $70? Nope. If I had sold, I wouldn’t keep getting the dividends. I have no intention of selling, no plan in the foreseeable future, so what does it matter?

Next week, I will receive a dividend for each and every one of those shares, as I have every month for a couple of decades, on a varying number of shares of course, as I added mostly. There is a number on the bottom of the statements representing the total value as of the date of the statement of the holdings. It varies month by month, up, down, back forth, in part as I withdraw money. While I can’t say it is of no importance, I think it is not very important, as long as the bipusineses are doing acceptably well.

The businesses whose shares I own are doing just as well today as they were last month. The interest rate environment is changing, so that will impact values some. BFD.

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Originally posted by heathtx:
When the value of the investments decline, the value of the position declines. You may believe that you have not lost any money, but when the securities will bring a lower amount, NO ONE in their right mind will pay you more than the lower new market price.

So if you can only sell them for less than they were worth a week ago, you have lost money. You may not have realized it yet (accounting wise), but the loss is there.

What if the security never comes back up to the higher value, is it still worth the higher previous value? If you say yes, I have some stocks to sell you and I'm sure you will pay the higher previous value if you are a so strongly principled........

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Imagine that in some private business you own a small share that cost you $ 1,000. One of your partners, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly. If you are a prudent investor or a sensible businessman, will you let Mr. Market’s daily communication determine your view of the value of a $ 1,000 interest in the enterprise? Only in case you agree with him, or in case you want to trade with him. You may be happy to sell out to him when he quotes you a ridiculously high price, and equally happy to buy from him when his price is low. But the rest of the time you will be wiser to form your own ideas of the value of your holdings, based on full reports from the company about its operations and financial position.

The true investor is in that very position when he owns a listed common stock. He can take advantage of the daily market price or leave it alone, as dictated by his own judgment and inclination. He must take cognizance of important price movements, for otherwise his judgment will have nothing to work on. Conceivably they may give him a warning signal which he will do well to heed—this in plain English means that he is to sell his shares because the price has gone down, foreboding worse things to come. In our view such signals are misleading at least as often as they are helpful. Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.

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Originally posted by heathtx:
If you aren't selling, then you have not taken a loss, but then the entire statement "It's not a loss until you sell" is a null statement.

When a security price declines (and I'm choosing price and value carefully) then one can buy a portfolio of
X shares at Y*price = total$
Also, if a price declines by $5/share), one can buy the same portfolio for
X shares * (Y-5)price = less $ than Total $


When EVERY brokerage house prints a statement showing the market value of the publicly traded portfolio has gone down (basic accounting) the market value of the portfolio has decreased.

There is NO ONE who will buy it at the higher price you believe (or feel, or whatever) it is worth.

I realize you are a savvy investor, but when the market value goes down, you can deny it all you want, but you can't sell it for more than it will bring (market price). Market price is market price, that differ from how you value the investment, but good luck selling it at a price above market.

quote:

Originally posted by heathtx:
If you aren't selling, then you have not taken a loss, but then the entire statement "It's not a loss until you sell" is a null statement.

When a security price declines (and I'm choosing price and value carefully) then one can buy a portfolio of
X shares at Y*price = total$
Also, if a price declines by $5/share), one can buy the same portfolio for
X shares * (Y-5)price = less $ than Total $


When EVERY brokerage house prints a statement showing the market value of the publicly traded portfolio has gone down (basic accounting) the market value of the portfolio has decreased.

There is NO ONE who will buy it at the higher price you believe (or feel, or whatever) it is worth.

I realize you are a savvy investor, but when the market value goes down, you can deny it all you want, but you can't sell it for more than it will bring (market price). Market price is market price, that differ from how you value the investment, but good luck selling it at a price above market.

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Originally posted by PeterGV:
JAllen is right... IF you’re buying and holding for the long term.

If, on the other hand, you’re just a few short years from retirement and you’ll need your money at that time, the activities of the market Near term matter... and the underlying value of your investment can be cold comfort.

Some of the best advice I’ve read in the past few years was in the Journal: “When you’ve won the game, STOP PLAYING!” IOW, once you’ve made your number, get transitioned to an asset allocation that will primarily preserve your holdings and thereby ensure a semi-comfy retirement.

Sur, we could all use a few more bucks. But, for me at least, not at the cost of being able to buy food when I’m 80.

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Buffett says if you can’t stand to see a 50% decline in your portfolio, you should not be in the market