Read? Investing Made Simple by Uncle8888 (24)
Read? Don't Be a Yield Pig
Who is the Yield Pig? Someone who is chasing for higher yield without seriously considering the risk of capital loss in risk/reward analysis.
Risk, Inflation, and Time Horizon
So what is the risk in stock investing? Capital loss?
So is capital loss the real risk in stock investing? Yes or no. It is actually very much depending on your investing time horizon.
If you are a very short-term investor who will need money next year to fund big ticket expenses. Your risk is capital loss as the stock market may force you into realizing your losses by liquidating your losing positions to raise money to fund your expenses.
But, if you are a long-term investor with 20-year time horizon holding a portfolio of solid blue chips, what is this current paper losses means to you?
Nothing!
Probably, ......