|
Post by Anthony Snook on Feb 18, 2009 23:47:41 GMT -5
I don't know why this came into my head at work but I was wondering. When someone takes a loss on their retirement, where does the cash go. I asked someone at work and he didn't know. I really didn't expect him to know(I gave him the nickname Cheech & Chong, use your imagination ;D) but I figured I'd ask. Any of you know
|
|
|
Post by Gary Roberts on Feb 19, 2009 1:50:19 GMT -5
there is no cash
You are holding paper shares only...and that paper has a value. the value rises or falls as a percentage but it never actually has a value tagged to it until you officially sell.
your statements that you get in the mail gives you the value on that day...if you were to sells all your shares in your plan (would equal $$$$)
I will break it down more simply
I own 59.88 shares of intel, of which I paid around $20 a share.
My original purchase value is 1197.60
over the last 5 years
those shares rose to a high of 33 (value 1976.44) only if I sold
and a current low of 13.36 (value 799.99) but again...only if I sell
so if I sold at the high..I would have a profit..if I sold today..I would be at a loss....
but I am only invested my original 1197.60..officially
and the monthly statements are only a representation of if you "liquidated" today...at today's rate...Here is what would be in your 401K.
Hope that helps
and I am continuing to hold my stock. What really matters to me is what is it worth when my daughter is my age. So it really depends on what your timeline is.
|
|
|
Post by Anthony Snook on Feb 19, 2009 16:31:50 GMT -5
I'm still lost in the sauce Gary. If Invest $10,000 and lose it all. My money went somewhere. It won't be there if I want it, if I have a balance of 0. So it went somewhere.......right.
|
|
Harry Kern
Silver Member
Sneads, Florida
Posts: 340
|
Post by Harry Kern on Feb 19, 2009 16:47:59 GMT -5
Try and look at it like this. A lot of kids collect baseball cards (or did when i was akid anyway). Think of a stock share as if it's a baseball card, some cards are worth much more than others (like the mickey mantle rookie card can easily be sold for several thousand dollars). Some cards gain value and some cards lose value.
If you spend 5 bucks on a card then you don't have the 5 bucks anymore, you just have the card. Over time that card might gain or lose value depending on player porformance and various other factors. When you decide to sell the card it might be worth 100 bucks or 2 cents, even though you paid 5 bucks for it, the only return you're going to get is what the cards worth at the time you sell it.
Your 10,000 dollar investment is essentially the same as spending 5 bucks on a baseball card. You've spent your money, what you have is a share of a stock. A share that might increase or decline in value over time. Like a baseball card.
|
|
|
Post by DJ VanAlstyne on Feb 19, 2009 16:53:14 GMT -5
I try not to think of my 401k, i droped my contribution to about 1% and dont plan on looking at it for a while.
|
|
|
Post by Anthony Snook on Feb 19, 2009 16:55:35 GMT -5
Thanks for putting it that way Harry. I can relate to that, and feel very stupid
|
|
Harry Kern
Silver Member
Sneads, Florida
Posts: 340
|
Post by Harry Kern on Feb 19, 2009 16:59:53 GMT -5
don't feel that way. Stocks are one thing that can get VERY confusing very easily if you don't knwo exactly what you're looking at.
|
|
|
Post by Gary Roberts on Feb 19, 2009 18:30:39 GMT -5
Yeah. good example. if you spend that 10 grand on baseball cards your money went to whoever you paid...just as you buy shares of stock there is always someone selling those shares. It has to be.
this is what determines when shares go up or down in value is by how many buyers and sellers you have.
stock prices drop when there are less buyers than there are sellers and vice verca.
if you paid 10,000 for a stack of cards and turn around and try and sell them...but can't then your cards are not WORTH 10,000.
401k's are dropping because many people are moving into cash or gold so that decreases sellers and price drops. You can choose to do the same thing or hang in there and wait till it is cool to buy again and stocks will go back up. dips and valleys is how it works.
for the record. I called a stock bottom of atleast 7500 back in october and then when it rose again...I said it would come back down to atleast 7500. Now that we have broken that floor...unfortunately it can go even further. maybe 6500.
remember this...
if more bad news comes...STOCKS WILL GO DOWN MORE.
if it proves that this stimulus plan does not work then there will be more downward pressure than up.
|
|
|
Post by Mat Helmer on Feb 19, 2009 18:44:56 GMT -5
Thanks for putting it that way Harry. I can relate to that, and feel very stupid How many years until you need the retirement income from the 401k? If you have enough time, then there's nothing to worry about. The $10,000 could rise back up and be worth much more by the time you need it.
|
|
|
Post by Tim "Powerhouse" Parker on Feb 19, 2009 19:08:52 GMT -5
Try and look at it like this. A lot of kids collect baseball cards (or did when i was akid anyway). Think of a stock share as if it's a baseball card, some cards are worth much more than others (like the mickey mantle rookie card can easily be sold for several thousand dollars). Some cards gain value and some cards lose value. If you spend 5 bucks on a card then you don't have the 5 bucks anymore, you just have the card. Over time that card might gain or lose value depending on player porformance and various other factors. When you decide to sell the card it might be worth 100 bucks or 2 cents, even though you paid 5 bucks for it, the only return you're going to get is what the cards worth at the time you sell it. Your 10,000 dollar investment is essentially the same as spending 5 bucks on a baseball card. You've spent your money, what you have is a share of a stock. A share that might increase or decline in value over time. Like a baseball card. correct u only lose gain or beak even when you sell. that is unless there's dividends dividends are payments made to the shareholders from the corporation (the company that you bought). When a company makes $$ (profit) it can either reinvest those profits into the company again (to try to better the company) or pay pay portions to the share holders in the form of dividends. not all companies pay dividends
|
|
|
Post by Tim "Powerhouse" Parker on Feb 19, 2009 19:11:51 GMT -5
Thanks for putting it that way Harry. I can relate to that, and feel very stupid u are far from stupid ... that what I have gathered ready ur posts. we all are stupid until we done learn thangs
|
|
|
Post by Tim "Powerhouse" Parker on Feb 19, 2009 19:26:26 GMT -5
Yeah. good example. if you spend that 10 grand on baseball cards your money went to whoever you paid...just as you buy shares of stock there is always someone selling those shares. It has to be. this is what determines when shares go up or down in value is by how many buyers and sellers you have. stock prices drop when there are less buyers than there are sellers and vice verca. if you paid 10,000 for a stack of cards and turn around and try and sell them...but can't then your cards are not WORTH 10,000. 401k's are dropping because many people are moving into cash or gold so that decreases sellers and price drops. You can choose to do the same thing or hang in there and wait till it is cool to buy again and stocks will go back up. dips and valleys is how it works. for the record. I called a stock bottom of atleast 7500 back in october and then when it rose again...I said it would come back down to atleast 7500. Now that we have broken that floor...unfortunately it can go even further. maybe 6500. remember this... if more bad news comes...STOCKS WILL GO DOWN MORE. if it proves that this stimulus plan does not work then there will be more downward pressure than up. your stock is worth what it was worth when that statement got printed at the brokerage firm. not that day you got it in ur snail mail. during these very volatile times the liquity value of your stock may be far from what it shows on that statment. just log on to the brokerage firm where you bought your stocks to find out what their worth right there and then. It should be real time at your firm (like say Ameritrade) or you can type the symbol at any reputable website for stocks. bigcharts.com/ is good ... or use Yahoo or Google .... but remember those places have a 15 min delay. So what it say is 10 per share is really what the share was worth 15 minutes ago.
|
|
|
Post by Justin Kaufman on Feb 19, 2009 19:28:03 GMT -5
You should try to invest in good solid companies now (there are a few). This is best time if you have extra money, you will likely be buying "On sale". Then when this crap turns around, you share value that you purchased "low", you could sell and it would be all profit.
Or you could be like most and get your statement in the mail, FREAK OUT !!! and move your holdings to something else and take "Direct Hit"!!!
Like Gary said you only really lose money if you've bought high and are selling low, share value fluctuates daily.
|
|
|
Post by Tim "Powerhouse" Parker on Feb 19, 2009 19:48:37 GMT -5
Yeah. good example. if you spend that 10 grand on baseball cards your money went to whoever you paid...just as you buy shares of stock there is always someone selling those shares. It has to be. this is what determines when shares go up or down in value is by how many buyers and sellers you have. stock prices drop when there are less buyers than there are sellers and vice verca. if you paid 10,000 for a stack of cards and turn around and try and sell them...but can't then your cards are not WORTH 10,000. 401k's are dropping because many people are moving into cash or gold so that decreases sellers and price drops. You can choose to do the same thing or hang in there and wait till it is cool to buy again and stocks will go back up. dips and valleys is how it works. for the record. I called a stock bottom of atleast 7500 back in october and then when it rose again...I said it would come back down to atleast 7500. Now that we have broken that floor...unfortunately it can go even further. maybe 6500. remember this... if more bad news comes...STOCKS WILL GO DOWN MORE. if it proves that this stimulus plan does not work then there will be more downward pressure than up. I know what your trying to explain but its not exactly correct on one thing. .. it may be true that when stocks plummet there are more people trying to get out (sell) and vice versa, more trying to buy when stocks are soaring high. but the amount of sellers or buyers do not dictate the price of a stock. It can plummet with the same amount of buyers/sellers and rise with the same buyers/sellers - or any variation amount of buyers/sellers. What dictates the price of a stock is based on the very last (most current) sale of that particular stock. what ever those 2 parties agreed upon sets the price. a stock can fall or sore with just a few buyers .... it all has to do with fear and greed of a undetermined amount of buyers/sellers buy again with that said Gary, I do know what trying to say .,.. and your basically correct .... and it may just be Semantics on my part. thanls for taking time for these posts ....
|
|
|
Post by Tim "Powerhouse" Parker on Feb 19, 2009 19:52:40 GMT -5
You should try to invest in good solid companies now (there are a few). This is best time if you have extra money, you will likely be buying "On sale". Then when this crap turns around, you share value that you purchased "low", you could sell and it would be all profit. Or you could be like most and get your statement in the mail, FREAK OUT !!! and move your holdings to something else and take "Direct Hit"!!! Like Gary said you only really lose money if you've bought high and are selling low, share value fluctuates daily. agreed ... arggg ... the leap frogging from Lilly pad to Lilly pad under duress is soooooooooo "usually" dangerous. only invest what you can afford to lose ... makes for a more healthy decisions
|
|