How to Respond When Your Investments Are Losing Money
Plenty of investors have bought great companies and seen dips in price.
By Phil Town •
Opinions expressed by Entrepreneur contributors are their own.
In this video, Entrepreneur Network partner Phil Town discusses possible strategies you can use after taking losses on your investments.
The efficient-market hypothesis, a common and well-held principle in finance, assumes that asset prices reflect all available information, meaning that price drops in concert with a fall in value. In Town's experience, this is not to be believed. In his words, the value of a stock is not equal to its dollar value.
Even investing maestro Warren Buffet says that you should not buy a company unless you're comfortable with it going down 50 percent. In fact, it can actually help if a target stock's price falls, because the true value of the company does not change with its pricetag.
Click the video to hear more tips about handling fluctuations in your stocks' prices.
Related: The Key Traits of Patient and Successful Investors
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