If the investments in your retirement portfolio currently trade at 50% of your purchase price, it’s very dangerous to think that you haven’t lost any ‘money’ because you haven’t realized the losses.It is equally dangerous to think you have made "money" if you haven't realized the gains. In both cases, you still own the same stock you bought and until you sell it you haven't lost or made any money. If you own Home Grocer stock, there are plenty of reasons other than the market estimate to wonder about how much value it has. When your house burns down you don't need market comparables to know its worth less than what you paid for it. Your logic dictates that investors in these companies haven’t lost any money over the past 6 years.Where is the money they lost? The spent money to buy stock, they still own the stock. Until they sell it they don't know how much money they have lost. The market is giving them an estimate - but that's all it is. There are plenty of reason's to think the current market does not provide a very good estimate.
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