You can still lose 100%...
There seems to be a common misconception for new stock market investors that if a company’s stock has fallen significantly recently then it can’t possibly go much lower.
I want to provide this reminder, or learning opportunity.
No matter how far a stock has fallen, you can always lose 100% from that point.
What do I mean?
If you bought at $100 and the stock went to $0, you’d have lost 100%.
Let’s say a stock falls from $100 to $50. You then buy it because you thought you were getting a great “bargain” after a 50% decline.
But, what if the stock drops from $50 to $0? Like the person who purchased at $100, you still lose 100% of your investment.
Even if you bought at $1, if it goes to zero, you lose 100% of your investment.
Did you already know this or is this concept new to you? Was it a good reminder?
All the best,
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