Financial Information
Can u lose money in stock market or like any investment?
Question : Can u lose money in stock market or like any investment?
ok what I mean is that if u put $ 20,000 in an investment market and then at the maturity date when u can take ur money ur worst loss is that u will get the 20,000 dollars back but u cant lose a penny from ur own money right??
money market investment
Best answer:
Answer by OneLastRevolutionary
You can lose it all in the stock market and there is no maturity date.
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#2 written by shags1_23 1 year ago
I don’t really understand the question. There are many different types of investment vehicles: CD’s, stocks, options, commodities, currencies, mutual funds, bonds, savings accounts, ETF’s, etc.
Having said that, there are different degrees of risk for each type of investment. Some, like savings accounts and CD’s, are very safe in that there is little risk of losing any of your starting capital. Some are extremely high risk such as FOREX trading on a 50 to 1 margin (that means for every dollar in your account, you can trade $ 50).
There is no such thing as a perfectly safe investment. You can lose everything, and in some cases, you can lose everything and owe money. Take the FOREX with a 50 to 1 margin. If you deposited the $ 20,000, you could trade with $ 1,000,000. But if you have a 10% loss, you just lost $ 100,000, and you now owe your brokerage $ 80,000 ($ 20,000 – $ 100,000 = -$ 80,000).
From your question, it seems like you are asking about bonds. A bond is like a loan that you give to the bond issuer. You buy the bond and the bond issuer pays you a percentage (called the coupon) of the price you paid until the maturity date is reached. When the maturity date is reached, the amount you paid of the bond (called the principle) is returned to you. Keep in mind that bonds typically pay between 3% (for municipal bonds) all the way up to 25% (for corporate junk bonds).
The higher the coupon the more likely the issuer could default on the bond, meaning you lose your principle. That’s why corporate bonds with high yields are called Junk Bonds; the company is more likely to default, and you’re left with junk. It can, and does, happen that you will lose your principle. An example of this happened with GM’s bankruptcy; GM defaulted on their bonds and the bondholders got nothing.
You can lose your own money, and it happens frequently. That’s why all brokerages have a disclaimer that says something like “Any investment has the possibility to sustain partial or full losses of capital. Do not invest money unless you can afford to lose all of it.”
Hope that clears things up for you.
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#3 written by Mgolodelwa 1 year ago
You can loose money in stocks, yes. The key word here, and in life generally, is risk. In everything we do we are taking risks, we all do, its part of life. The important thing is to manage risk well. In your case I would recommend you try and find out how protected is your capital, if it is guaranteed. And also what is your money invested in. If your term is long this will more than likely count towards you. Most of the funds I have invested in guaranteed my capital, but in exchange my risk profile was very low, and so were my returns. These days I prefer handling my own portfolio, and do my own research, because I want to take high risks. Infact I think taking high risks may be the only way to see returns in this market and economy.
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#4 written by Steve D 1 year ago
Incorrect – any investment brings a certain risk – stocks can lose value, the company behind a bond can go bankrupt, etc. Folks who bought stock in 2006 have seen their investment decline by up to 50%. The stock market has no maturity date, stocks are open ended and you trade when you trade. Bonds do have a maturity date and when that date is hit, assuming the company is still in business and has not gone through a bankruptcy, you get your money back. The trade off is the reward – the higher the risk, the higher the possible reward.
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Hong Kong is known as the international capital of scams in stock shares and real estate transactions. By the basic reminder of the lousy fascist government always mentioned that all investor must read the financial contract thoroughly and understandably about the possible risk as described usually at the corners of the end of the contract with bilingual words (Chinese and English) ” Every investment is involved risk”. Many Hong Kong investors have lost from HK $ 50k to more than 10 millions in the deals of mini bonds, stock shares, warrants, accumulator, red bull certificates in the past two years. You can lose every thing if you have signed a contract with the banker or representative of any financial institution in Hong Kong.