undefined | Better HN

story

0 pointswfunction9y ago0 comments

> But even if a company doesn't pay dividends, it will often make a profit that ends up on the company's books. A part of this profit, proportional to your ownership, belongs to you who own the stock.

You're totally missing my point. I'm saying, even if your stock is "worth" $1 trillion, if you don't actually ever sell it, you haven't earned a single penny from it. It's only money when it's actually money. So my question was whether the OP was ever selling the stock or not.

0 comments

dgacmu9y ago

This part of your statement is incorrect: "It's only money when it's actually money."

Stocks in major corporations are generally considered a liquid asset - i.e., they can be easily converted to cash. [1]

Don't confuse liquidity and risk exposure. The money is still subject to the risk of the market when it's still being held in stocks, but it's approximately as good as money.

[1] http://www.investopedia.com/terms/l/liquidasset.asp

j / k navigate · click thread line to collapse