Forum Archive Index - September 2000

["nick" <acummin@es.co.nz>]

        My partner (not into shares)  whenever i tell her how well my
shares are doing says
     " a profits not a profit, till its in your pocket."
   This has a definate logic too it, (unless pocket full of nz dollars!!)
 question is does it apply to losses?
           I suspect the answer depends on whether you are a trader or
an investor.
                   For the trader the important point that seems to have
been forgotten
is that share money lost by pulling out of a losing trade is freed up,
in theory to be channeled back into more profitable ventures.
 Ultimatly according to this theory this money should do better than if it
is simply
left in the original stock in the hope of a price rebound.
        For the long term investor provided the companys invested in are
sound
then a paper loss isnt necessarily a loss at all.
       For example i have shares in nufarm, i payed 5.50 for many of them,
my intention then was to buy for the long term
 i am happy and convinced that over time i will profit from that original
investment.  The paper loss will only become real if i am forced to sell
the shares for one reason or another. As a longterm investor i dont need to
keep recycling money in the way a trader does, so having a portion
of my money sitting patiently is not a problem.
              nick




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