Feb 17

Aren’t they just paper losses? When the market recovers later on, won’t they recover their “paper losses” sometime in the future? I don’t understand this. Can someone please explain it to me. I figure it’s not a loss unless they cashed out of their programs and actually “realized” their losses.

6 comments so far...

  • Reena Said on February 17th, 2010 at 11:23 pm:

    You are right. It isn’t a loss until you cash out.
    So young people shouldn’t worry about the performance of their 401K.

    But for people that are right before retirement and don’t have decades left to recuperate from this loss it is devastating.
    They had all the money together to retire and now it is gone and it won’t be able to come back in time for their retirement date.

  • Annie M Said on February 17th, 2010 at 11:59 pm:

    Losses make anyone upset. We don’t know how long it will take for the market to recover.

  • Derek Said on February 18th, 2010 at 12:47 am:

    Yes they are. No one losses money until they sell.

  • Nick Z Said on February 18th, 2010 at 1:04 am:

    After the 1929 stock market crash, it took 25 years for stock prices to recover to their previous level. And to get back to even after 25 years is not the kind of thing anybody can feel good about.

    Even the present market is now lower than it was 10 years ago. Which means that many people who have invested 10 years ago have nothing to show for it, except a lot of red ink.

    Investment advisers often tell people that they should expect an average of 6-7% annual return on their investment in the stock market. Which means that a lot of people end up being very disappointed when they find out that this is based on historical performance. And there is no guarantee that it will continue like this in the future.

    Most people don’t usually read fine print disclaimers like that, until it is too late.

  • Me F. Said on February 18th, 2010 at 1:12 am:

    They are hung up because If things go to worse, its possible they could lose EVERY RED CENT. Zip, Zero, Nada. Some of the companies they invested in could go bankrupt and DEFAULT ( never pay back) what they should have. In that case, there losses have been realized.

    you forget to ask, how long off is “later on”.

    That can take up to 25+ years. Most ppl only have an investment window of 20-40 years before they have to retire. SO they need to be where the money is being made OR make quick decisions when things change.

    I think what ppl are hung up on is the fact that they don’t really understand their retirement plans, they don’t have a firm grasp on whats going on , and they certainly cant stop it to save themselves. Its distressing to think they may never get to retire or be a real burden on their families.

    I’ve seen grandma’s working at CVS, I Swear they look miserable.

  • Astro newbie Said on February 18th, 2010 at 2:00 am:

    It takes years or decade to recover the loss we have witnessed.

    I had $50K in my account 3 years ago. It took me 2 years to add $20K into it. It took 1 year to wipe away all the gain. The way it looks, it will take 3, 4 year to recover that. So in total, I will have wasted 6-7 years.

    Actually given the fact that interest is compounded, I will have lost more than 7 years. When I retire 30 years from now, $70K I had in 2008 will worth more than $70K I had in 2013 (when i regain my $$).

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