Stock Losses Don’t Count Until You Sell

My investments have been bouncing all over the place recently, though they’re trending downwards; the overall rate of return on my portfolio has gone from 10.3% to 9.3% in the past week.

But I’m not going to sell—and if you’re worried that the coronavirus outbreak, or any other breaking news might negatively affect your portfolio long-term, here’s a piece of advice from Sarah O’Brien, personal finance reporter at CNBC:

Long-term investors — i.e., those who won’t need the money for decades — should remember that while the stock market might jump around or enter a prolonged downturn, no losses you see on paper are locked in unless you sell.

I’d never phrased it that way before myself—my motto, when the market goes down, is “time to invest more money while stocks are on sale!”

But I really, really like it as a concept.

Stock losses don’t count until you sell.

If you can buy and hold, and then keep holding, the odds are that the market will rebound eventually. That said, I am not an investment advisor and I’m pretty sure I have to tell you that you should not take this as actual investing advice.

It’s just something to think about, the next time you wake up and see that your investments have lost value again.

(Also, make sure you have some cash set aside in an emergency fund so you can keep those investments in the market, instead of selling while stocks are low because you need to pay the mortgage or something.)