INVESTMENT LOSS RECOUPMENT, OR THE COST OF NOT SELLING A FALLING INVESTMENT

Most Readers know that the Author will not take more than a 7% loss on most investments. There is a good reason for this practice, and the chart below demonstrates the wisdom of this practice.

The text of this post comes from an Excel Spreadsheet the Author developed. In fact, the spreadsheet will calculate the return you will need to recoup an investment loss for any drop in percentage. If you would like a copy of the spreadsheet, email the author at desertoftherealeconomics (at) hotmail (dot) com.

If you investment drops by 7%, it will need to return 7.53% to break even.

If you investment drops by 15%, it will need to return 17.65% to break even.

If your investment drops by 25%, it will need to return 33.33% to break even.

If your investment drops by 33%, it will need to return 49.25% to break even.

If your investment drops by 50%, it will need to return 100.00% to break even.

It is a simple calculation to determine how much you will need to return to recoup an investment loss:

Percent of Investment Loss/(100-Percent of Investment Loss)

Here is an example:

Your Hogsome-Darlington Stock drops 55%.

55/(100-55)= 55/45 = 122%

KEEP IT SIMPLE AND MOVING UPWARD IN THE DESERT OF THE REAL!