1: loss definition
2: how loss works
3: loss vs debt
4: benefits of loss
Opening information:
Loss means dropping or forgetting mislaying in the one value of matter or things. The things and items would be anything based on what you used for it.
Most likely the dropping of one item’s worth and forgetting of one material are caused by the value of one thing because without no value there is no drop and forget of loss.
So this article contains information about what is a loss, how loss works in the stock market for corporate industries, what is the difference between loss and profits, and finally one strong benefit of a loss anyway.
1: loss definition
Mr.Katil is an investing person, where he is a stock Investment man, but not the greatest professional investor of all time.
Before the four years, katil had 100,000 dollars on hand, using the amount and his little knowledge, katil had invested in 4 stocks.
The Katil prediction would be at least triple the money in the next 5 years, once he had done he would end up with 800,000 dollars in hand.
Moreover, as per his expectation, he couldn’t achieve his goal, the reason he invested in three individual stocks and one index fund.
Katil hasn’t made it any well researched, and fundamentally understands the business deeply, instead he only invested using technical analysis.
However, these three Invested individual Companies dropped the share price by 80 percent, thus making Katil’s invested portfolio drop from 75,000 dollars down to 15,000 dollars.
And the fourth selected index fund would increase from the purchased price to more than 60% growth. This made the Katil portfolio end with 40,000 dollars in a gain on the 4th selected stock.
Now if Katil sold all his four stocks, which made him end up with 55,000 dollars instead of 800,000 dollars in 5 years anyway.
Therefore katil learned, that without understanding the individual business well enough, he would most likely have to face a drop in the value of his investment.
On the other side, he also understands instead of investing in the not understandably individual company, an index fund would be a great investment for him to grow his money effectively over time.
Katil decided to sell all his three individual companies because of a high 80% drop in the price of a stock and ended with less than 75,000 dollars that he invested. Katie had 15,000 dollars finally on hand with only gain on the index funds.
Here the drop in the price of stock in the Katil three investment company would be represented as a loss on the Katil investments.
Most beginners with a lack of investment knowledge would most likely face a loss rather than a gain in total investment. So now let’s have a look at how the loss works in the stock market for corporate businesses.
2: how loss works
When the stock Investor invests in the stock market, the loss is the one main and key integrity against the profits.
Without any profits, no business would acquire a single Investor in the stock market.
Looking for a profit for the company over time is the main activity of the Investors, at the same time loss is the one which ate and not ate that profits any business.
In Corporations, the loss is referred to in a manner of net loss in a company, because losses are not noted in a single operation with detailed information.
instead, the financial statement of the Company would represent in a single word a net loss by calculating the total profits and losses of the certain business.
To understand the loss of risk, Investors compare the previous year’s and the current year’s income to identify the growth of the company over time.
Most investors confuse the loss and debt, so let’s take a look at the key differences.
3: loss vs debt
The difference between loss and debt, loss is money that is deducted money from the profits.
Debt means lending money, which means contracting money to pay back, it’s not considered a loss when a specific industry has a good income.
So the key difference between loss and debt is loss is deducted money in subtraction and debt is not deducted money but recorded to pay back the remaining amount.
4: benefits of loss
Loss is the one which is a learning principle and basement of everybody.
Without a loss nobody wouldn’t able to learn and improve themselves, the loss is the pain on one side if you perceive it, so don’t risk all the money instead risk only the part of it which only becomes an exciting learning investment journey.