Can the value of stock reduce to nothing?

Question

if i buy some stock and it falls in value, can it reduce to nothing and have me lose all of my investment. Or when it is worth basically nothing, can i just wait till it comes back up. for example: after a huge stock market crash where i basically lose my life savings, can i keep the stock and wait till it raises in value after about 30 years if the company still exists.

Answer 1

Companies can go out of business. Their stock goes to $0.

It's always wise to have an exit plan on a stock before you buy it. Hoping it will go back keeps your money tied to a loser. even if it takes 2 years to get back to what you paid for it.... wouldn't make sense to put the money in something that can grow quicker?

Don't "hope" "wish" or "expect a stock to do something... it can't hear you!  It doesn't have to follow some logic you choose to give it.  Get rid of your losers and move on.............

Answer 2

As long as a company exists, there could be a theoretical chance its stock will be worth something.  But if a stock falls to a value of zero, that will almost always mean that the company has failed.  In such situations, it will usually liquidate or reorganize in bankruptcy, with the stockholders losing their investment permanently.  This is why you should always invest in a diversified portfolio of assets.

Answer 3

Great question.

Yes stocks can go to zero.

Even if you hold on to them they most likely will not come back.  What happens is that when companies start trading downward and financial pressures mount, institutional investors have to sell them because of their rules and regulations.

Companies many times file Chapter 11 bankruptcy so that they can reorganize.  Even though the company comes back stronger than ever, they issue new stock and the old stock will usually get wiped away with almost no value.  The only people who make out in this scenario are the bond holders who buy on the cheap.

Good luck!

Answer 4

Yes you can lose your entire investment.  So knowing that ahead of time, and still investing in the stock market, is a risk that you take...or not.