Quote:
Originally Posted by disneysteve
I'd say g) It depends. I might buy more. I might throw in the towel and take the loss. I might do nothing and let it ride if I think the investment still has good prospects. I wouldn't do d, e or f. This would be evaluated on a case by case basis.
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My opinion is your choice g) "it depends" is my choice e) (rethink plan)
meaning when something goes down 50%, you are reanalyzing a portion of portfolio. Whether the analysis causes you to buy more, sell all of what you have, or do nothing remains to be seen...
that is an acceptable answer- means you are paying attention LOL
when I lost 50% in 2008, I did both a and e at same time
I made sure I liked my choices
then I bought more of what I already had (which had lost money).
I ask the question to make sure people realize that its very possible the investing choices they make might lose 50% over a very short period of time. If you notice, there are few other questions I ask which I do not ever mention a time table, but the right answer might be "how long is money invested"- see question 5.
I am not trying to lead people to choose a given asset allocation (which is the ultimate goal of retirement investing), but to make sure people build an allocation which makes sense for them.