: the stock loses 50% and you sell for $500,000
Is the potential best-case scenario worth the risk of the worst-case? The answer will be different for everyone.Consider assigning probabilities to the likelihood of each outcome. You need to make an educated guess, but it can help work through the decision tree. As a simple example, if there's an equal likelihood that the stock would either goIt sounds drastic, but recall the numerous statistics shared earlier.
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