Cold truth about paper wealth
Cold truth about paper wealth
Billionaire wealth — on paper, at least — has tumbled dramatically during Wall Street’s recent turmoil, illustrating important lessons for everyone about the ephemerality of stock gains and losses, writes Javier E. David, Axios managing editor for business.
- Why it matters: Net worth is something of a public obsession, and a bit of a chimera avidly followed by publications like Bloomberg or Forbes. Yet the reality about paper wealth — especially fortunes tied to volatile technology stocks— is that it can be ephemeral. Attempts to put an exact figure on it can be misleading.
Elon Musk, Jeff Bezos and Bill Gates are hardly paupers. But their fortunes — most of which are linked to the value of shares in the companies they founded — wax and wane dramatically, and are subject to fickle market forces.
- Musk, technically the richest person on the planet — again, on paper — isn’t liquid enough to write a check to buy Twitter That inconvenient truth has weighed on Tesla’s stock.
And it’s not just the rich: This week, JPMorgan estimated that American nest eggs have seen a collective $5 trillion evaporate in recent months. That figure could nearly double by year’s end.
The lesson for retail investors or someone watching the swings in their retirement account:
- Your focusshould be on a balanced portfolio — and the long term. Strong markets lure investors into betting too heavily on riskier investments.
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Πηγή: axios.com
