Ask Matt: Are 'paper losses' real losses?
Q: Are “paper losses” real losses?
A: Paper losses may not be “realized,” but they’re still very real.
Investors suffer a paper loss when an asset declines in value before they’ve sold at a loss to “realize” the loss. Even if you didn’t sell, and even if the asset might recover in the future, you still have a loss now. The investment has declined in value.
There have been plenty of paper losses to go around this year given how poorly stocks have done in January and February. Investors have suffered a collective paper loss on the entire market of $2.4 trillion since the middle of December... read more
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