from Elliott Wave Technology:
Should you invest for the long haul? The answer to that question depends on what your definition of “the long haul” is.
You will need to determine what the long haul means to you after identifying yourself as a long-term investor. You are a long-term investor by default if you have an IRA or 401K. You will then need to establish your investment goals, management and exit strategies, and your tolerance for risk.
You can establish your risk tolerance by determining a maximum financial-loss threshold where you will protect and preserve the remaining balance of your long-haul investment capital.
Would you hold on to a long-term investment through multiple years of losing 20%, 30%, 40%, 80% or 99.9% of the price you paid for your investment? Where exactly would you draw the line and abandon ship?
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