Sunday, October 27, 2019

Paper Gains and Loses

        This post is a continuation of the $50 a month stock challenge I started October 14, 2019.  Click on, "No Commission Stock Trades", on the right side of the page to read from the start. 

     A "paper gain or lose" in your stock brokerage account is referred to as "unrealized gain or lose". It does not matter how far the stock goes up or down, you have a paper gain or lose (unrealized) until you sell the stock.

     I try not to pay attention to that and only focus on my account "real balance". The real balance is cash on hand and what I actually paid for any stock I am still holding.

     I was asked, "Why don't you invest your profits made during the month?"

     Very good question.
     1. It simplifies my bookkeeping. ( I strive for 2% a month and any profit or lose would askew that number).
     2. It makes sure I have fresh money to invest next month should I still be holding all my purchases.
(all my trades are not winners and I need new money to invest until I choose to liquidate any holdings).
     3. It is just my style of trading and bookkeeping (everyone would adapt what works for them).

Disclaimer, I am not a professional.

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