Bag holder

Bag holder,

Definition of Bag holder:

  1. A bag holder is an informal term used to describe an investor who holds a position in a security that decreases in value until it descends into worthlessness. In most cases, the bag holder stubbornly retains their holdings for an extended period, during which time, the value of the investment goes to zero.

  2. A bag holder refers to an investor who symbolically holds a “bag of stock” that has become worthless over time. Suppose an investor purchases 100 shares of a newly public technology start-up. Although the share price preliminarily rises during the initial public offering (IPO), it quickly starts dropping, after analysts begin questioning the veracity of the business model. Subsequent poor earnings reports signal that the company is struggling, and the stock price consequently plummets further. An investor who holds onto the stock, despite this ominous sequence of events, is a bag holder.

  3. A slang term used to describe an investor who holds onto a stock or bond that has little or no value.

How to use Bag holder in a sentence?

  1. There are psychological reasons behind bag holder behavior: namely, investors tend to fixate on remedying losses, more than they focus on realizing gains.
  2. A bag holder indicates an investor who holds onto poorly-performing stocks, hoping they'll rebound.

Meaning of Bag holder & Bag holder Definition