If the market continues to drop, can equity losses ever be recouped?

Question

If the market continues to drop, can equity losses ever be recouped?

Answer 1

It depends.  It depends on the equities you have in your portfolio and it depends on how severe and prolonged the drop is.  Those who invested in equities during the spring of 1929 may not have lived long enough to recoup their losses.  Many investors who invested in growth stocks during 2000 have not recovered yet, eight years later, especially those who invested in Global Crossing and World Com and Intel and Cisco among others.

Answer 2

It depends on a lot of factors. There are shares of companies which are doing excellently well. There are also companies which were over priced which people may have bought at higher prices. It really requires an awesome effort to guess stock market. Had you invested and built a portfolio based on correct knowledge you can sit back and wait for good times which closer.

Answer 3

Beginner traders often fantasize or wonder about how some people are able to achieve tremendous profits by trading stocks just a few hours on a daily or weekly basis.

So going beyond the hype & the bells and whistles that a lot of the called "trading gurus" like to invoke, the real "secrets" of the stock market game are enclosed within the trading set ups and market signals you rely on to decide how to CHOOSE stocks, as well as WHEN to BUY & when to SELL them, or even when to SHORT SELL those that are poised for a profitable fall. So the clearer your set ups are, the faster you can spot a potentially profitable trading scenario and ACT ON IT reducing your risk.

Complicated technical systems and information overload can make you slow and confuse you right from the start, making you loose money instead of making your profits grow.

In essence, You can be sure that the trading method you employ to approach the stock market and pick stocks can make a big difference in your results as a trader. In order to succeed you will need to FOCUS on a set of simple trading strategies that you can implement without hesitation.

Fortunately some sites on the web do offer more effective and updated day trading methodologies. One of those sites that can show you how to take advantage of certain stocks on positive and negative momentum as well is http://www.MomentumStockPick.com

They focus on momentum stock trading strategies, that are practical and easier to apply than many other technical systems out there.

Stock trading doesn't have to be complicated as many people perceive. But you do need to follow a well organized set of rules and tactics, that once you master them, you can aspire to replicate profitable trades with consistency.

Answer 4

If you can predict with assurance that the market will continue to drop, then short selling will recoup losses in that declining market.

If you predict incorrectly, however, you get burned.

Answer 5

That is one of the things that Benjamin Graham discussed in his book Intelligent Investing.  After the 1929 stock market crash, stocks did recover, but it took over a decade to do it.

This is one of the places where investing (specific term) comes in.  When your buys are spread out over time, then you average down your cost basis. With the ratcheted down average market cost, just a little rise brings it closer to profitability. I did this after the dot.com bust and for a couple of years I felt like a genius with the gains that resulted. I figured some trends elsewhere and did less well, erasing all that ground gained and then some. I recall buying Corning once after some good news. It turned out to almost the high of the year. It went down, down, and down. The news was scarse, so I thought that something bad was about to be announced. So I sold it, at almost the low of the year. Next year it went up and above where I got it to a very comfortable margin. If I had stuck to my plan and the rationale behind the purchase, well, it wouldn't have been one of my more embarrassing ventures. If you are looking for the market to 'recoupe' after a fall, you've got to possess patience that is measured in years, sometimes several of them.

Answer 6

The markets always go up and down, and every time the market has gone down, it has gone back up again.

The equity lost in a down market, comes back when the market turns unless investments were made in bad companies that went down, not because the market was bad but rather they were bad.

Owning sound companies with good fundamentals always survive market fluctuations, quality always survives

Answer 7

Yes.