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Still turning a corner

August 3rd, 2009 at 06:19 pm

So, my parents stopped by again. This time, they wanted to set my dad's trading account password. (They forgot what it was and had to reset it with a temporary password.)

In the process, I also got a chance to see his two stock positions, Citigroup and Home Depot. Home Depot is -22% and Citigroup is -93%. Wow.

They've pulled the rest of their money out except for those two stocks, because they believe that so long as you don't sell, the loss is only on paper.

This is true. And this is often times what I've had to tell myself from selling when I shouldn't be selling.

But you know what? Sometimes, if you still need to sell according to your investing style and risk tolerance, you might as well sell. Because, even when a loss is on paper, it will still have that much more for your positions to recover, much less make a gain.

Again, that's only if your investment style and risk tolerance has changed. If not, then I say "full speed ahead". That said, theirs have clearly changed.

However, I didn't tell them anything. It was tough enough just to explain the Vanguard index funds to them, and to get their passwords reset.

Honestly, they should let me manage it. Big Grin Oh well, whatever is going on, it's very clear that these two stocks are only a fraction of their entire portfolio. They certainly don't act worried. So, I'm sure their nest egg is bigger than what I am aware of.

1 Responses to “Still turning a corner”

  1. baselle Says:

    One step at a time, BA. One step at a time. Big Grin

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