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glatt · 10-06-2008, 03:43 PM

Watching the market a little today...

Let's say the stock market drops 25%, but then it bounces back up 25%. You get your money back. Right?

Pretend you have $100 of a stock. It falls 25%, so now you have $75.

So you now have $75, but the market goes back up 25%, so it's all cool, right? 25% of $75 is $18.75. So you bounce back up to $93.75. Nifty how that works, huh? And the fund managers make their % on the way down and on the way back up too.

10-06-2008, 03:43 PM	#15
glatt ™ Join Date: Jul 2003 Location: Arlington, VA Posts: 27,717	Watching the market a little today... Let's say the stock market drops 25%, but then it bounces back up 25%. You get your money back. Right? Pretend you have $100 of a stock. It falls 25%, so now you have $75. So you now have $75, but the market goes back up 25%, so it's all cool, right? 25% of $75 is $18.75. So you bounce back up to $93.75. Nifty how that works, huh? And the fund managers make their % on the way down and on the way back up too.