The credit crunch

d712

Have pretty much all investors lost money in the credit crunch? You hear of people like Abramovich losing billions.

purch

Have pretty much all investors lost money in the credit crunch?

Not necessarily........depends how/where you were invested.

People such as Abrabovich, or Bill Gates have lost wealth on "Paper"......but then again much of the wealth they appeared to have was just on "paper".

Much of the "paper" wealth that Gates has is the value of his Microsoft stock....stock he would find it very difficult to offload without setting off a huge run against himself.:eek: Of course the 'income' he received from that stock would keep most of us in luxury for the rest of our lives :T

timarr

Have pretty much all investors lost money in the credit crunch? You hear of people like Abramovich losing billions.

Most investors have "lost" money over the last year and a half. A few shorters may have made money, but shorting requires ability or luck in timing. So probably the vast majority of investors in stocks are down. The only exceptions will be people who moved into cash or government bonds. These kinds of situations are why it's wise to have a spread of investments, especially as you get closer to retirement and can less afford the impact of a sudden fall in the stockmarket.

Still, the long-term research shows that holding your nerve and staying invested through the dip will probably yield decent returns. That depends on having a reasonable spread of stocks - e.g. not too concentrated on financials or commodities - and staying fully invested. There are periods over which this hasn't worked, but they're relatively short and relatively rare.

As for the likes of our Russian Chelski friend, well, the lesson is that gearing works wonderfully on the way up and devastatingly on the way down. As many buy-to-let and overindebted householders are finding out to their cost.

timarr