I've lost money

[Brian Ellis]

I have my meagre savings spread around the world and in different types of investment, but one large slice is in US equities. I'm an idiot to have left them there, because I've lost a substantial sum because of the dollar's weakness and now the stock markets are reflecting this weakness (foreign investors wiser than myself are removing their money fast, because of the weakness of the economy). The DJ has stagnated over the past few days and the Nasdaq actually fell yesterday. Three weeks ago, analysts confidently predicted that these indices would have substantially passed the 10,000 and 2,000 marks by the end of November. They haven't, either of them, although the Nasdaq did touch it yesterday, before plummeting, despite positive signals coming from the tech industries.

I'm not a happy bunny

[TransformX]

The question is whether you believe in American economy or not.
If you don't, fold out. If you do, it's time to take a risk and buy-buy-buy.

[Fat Tone]

Me too, but because of the uk stock market. I just heard my endowment will only make 60% of the original target value, leaving me many many thousands short. I'm certainly not on my own in the uk, but that doesn't help much.

[Umfriend]

First question is whether you want to speculate or invest. Only if you want to former _and_ believe the dollar will rise again then you should buy dollars. There remains the question of course *when* to buy them.

An investor, when purchasing foreign assets, should hedge the currency risk. Ideally, this hedge would include your exposure to the dollar on the expenditure side, e.g., fuel should become cheaper in Euro-zone pretty soon now.

[gt40]

sorry to hear of your losses.
I've actually done pretty well on mine.

[GNEP]

I've found that I've felt much better about my shares since I stopped looking at absolute performance and started benchmarking myself against market indices Also then adding in cash that I took out of the portfolio near the 2000 peak gives me a much bigger boost

[Fat Tone]

No-one loves a smart-arse

[GNEP]

Well also cunningly not counting my share options from the company sharesave scheme helps - they are so far out of the money it's not funny...

[The PIT]

My meagre investing haven't recovered after sept 11th. Halfed in value an dthen the bank wanted me to invest more.

[Brian R.]

Brian - You haven't lost anything unless you sell.

[Umfriend]

Brian R.: That is truly a misconception, albeit shared by many. As Brian. E's possible consumption level is now lower than it was, he has lost indeed.

[cjolley]

Depends on what the investment is for.
90% of my investments are geared towards retirement.
Low stock prices now just mean I am buying low. A good thing.
At this point there's not much reason for me to worry about what stocks will be doing 20 years from now when it will matter to me.
There's just no way to know, except that usually stocks go up quite a bit in that amount of time.
Chuck

[Umfriend]

Chuck, assuming the previous post was directed at my post No. 11: No, it does _not_ depend what the investment is for. It may not matter much to you if your horizon is far, but the only sensible measurement of wealth is what you can consume *now* (and paying for future income is one of the ways to consume your current wealth). If you own a stock, and it drops, you've just become poorer because either way, you can either consume less *now* or you can purchase less *future* income.

[Dr Mordrid]

Originally posted by Brian R.
Brian - You haven't lost anything unless you sell.

Exactly correct. Some of mine went down in the aftermat of 9/11 and stayed there for about 2 years, but now I'm way back in the black and rising. IF I'd sold during that time I'd not have the positive balance I have now.

Another key point is diversification.....meaning you have both bull and bear market holdings as well as about 20% in things like certificates of deposits etc.

Dr. Mordrid

[cjolley]

Originally posted by Umfriend
Chuck, assuming the previous post was directed at my post No. 11: No, it does _not_ depend what the investment is for. It may not matter much to you if your horizon is far, but the only sensible measurement of wealth is what you can consume *now* (and paying for future income is one of the ways to consume your current wealth). If you own a stock, and it drops, you've just become poorer because either way, you can either consume less *now* or you can purchase less *future* income.

Brian didn't say he had lost wealth, he said he had lost MONEY.
Stocks and money are not the same thing.
Just as money and wealth are not the same thing.
If you mean to say that the bottom line of his financial statement went down, well of course.
But he has not lost any money untill he sells the stock, which he may or may not need to do right now.
chuck