Your money is lost when you buy a stock

deaddog said:
I consider trading a business.
I buy assets and hope to sell them at a higher price than I paid for them. {Any asset be it equities, futures, options or currency. I currently trade equities))
I have a ledger so to speak. On one side is my money and on the other is my assets. Add them together and you have my net worth.
When I buy an asset the money is reduced and the assets are increased.
If my networth consists entirely of assets the money is lost. (I have no money)
My assets have increased but if Ineed money to buy something else I have to sell assets.
There is no gaurantee that you can sell your assets for what you paid for them.

So yes if you buy any asset for money your money is gone and you own an asset. You want to get your money back, you sell the asset.
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The error is to insist your money is lost once turned into asset. But that asset value fluctuates and your money with it. You may have to sell the asset at discount if you need immediate cash, but you'll still have money unless the asset is worthless.

Example:
You buy 100 shares at $2, you've invested $200. If the share price drops to $1 and you sell, you'll get $100. If the share price returns to $2, you can now only buy 50 shares. If you hadn't sold, you'd still have $200, meaning you haven't lost your money until you sell.

Of course you can also make the point that you couldn't borrow $200 against your now 50% devalued investment. Perhaps the answer to this conundrum is what you intend to do with that asset and in what time frame.
 
VicBee said:
The error is to insist your money is lost once turned into asset. But that asset value fluctuates and your money with it. You may have to sell the asset at discount if you need immediate cash, but you'll still have money unless the asset is worthless.
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Of course you can also make the point that you couldn't borrow $200 against your now 50% devalued investment. Perhaps the answer to this conundrum is what you intend to do with that asset and in what time frame.
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Once you buy an asset you no longer have access to the money.
You can make the arguement that you can use the asset as collateral or possibly trade the asset for another asset. But the money is not available for you to spend.
You are now at the mercy of whatever market your asset trades to hold or increase the value of your asset. You no longer have control of your money. What happens in a black swan event?
 
deaddog said:
Once you buy an asset you no longer have access to the money.
You can make the arguement that you can use the asset as collateral or possibly trade the asset for another asset. But the money is not available for you to spend.
You are now at the mercy of whatever market your asset trades to hold or increase the value of your asset. You no longer have control of your money. What happens in a black swan event?
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Cash is also subject to inflation even if it is the ultimate conservative position to counter a hypothetical black swan event. Trading is one alternative way to be quickly liquid. Any financial decision has positive and negative consequences for which we have the character/personality to address.
 
deaddog said:
if you buy any asset for money your money is gone and you own an asset. You want to get your money back, you sell the asset.
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I learned this real quick when I had gold coins that had gone way up in value, but needed cash for rent. Ebay (or the coin store) minus commish, and you can do business again in the real world.

"Cash rulez everything around me" - some rapper
 
wxytrader said:
How are you day trading it? Let's see your chart. What's your next trade?
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sold at 60178
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Funny thing about saying "I put my money to work in the market".

Their money (as a buyer) became someone else's money (as a seller). Money is never really in the market.

Just a transfer of asset ownership. Same for any other exchange of cash for goods/services.
 
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