Gratitude For Unrealized Losses

My stock portfolio took another daily slide, closing off the week nearly 15% lower than where it started.

This time last week everything was on the rise. I was making 8% a day without doing anything but logging into my Robinhood app. Thanks to Face ID, I didn’t even have to lift a finger.

I could watch my money grow forever. Couldn’t we all.

Theoretically, I knew it wouldn’t last. Eventually, investors would want to cash in on their upside, and people always get nervous that the stocks are overvalued.

But, in the moment, I was just excited to participate in the growth. Now, I’m left with 85% of the portfolio that I had last week. I witnessed the potential upside and within days it vanished. Well, sort of.

There’s a difference between unrealized losses and realized losses. While my portfolio did take a hit this week, the loss is not realized until I choose to sell. As long as I remain in the game, the loss is merely a paper loss.

It still has the potential to switch directions.

This type of thinking is also valuable towards other non-financial losses.

When things in our life are taking a downhill turn, we can choose to realize the losses and tap out of the game. Or, we can keep believing in the reason why we invested in the first place and double down.

What type of investor are you?