Strategic Foreclosure: Was It a Smart Move?

The old saying that home prices never fall obviously wasn't true. But in the following video, Fool contributor Matt Thalman discusses why the "strategic foreclosure" may not have been the smartest thing to do for the millions of homeowners who could afford their monthly mortgage payments but decided to walk away from their homes just because they owed more than the homes were worth.

Matt turns this idea toward the stock market and explains why it's not good for investors to walk away from their losers simply because the share price has fallen below the amount they initially paid for the stock. Just because we lose paper profits in the short term, Matt says, doesn't mean we should give up on our long-term investments if the companies are still performing. If we did, we'd all end up living in the poorhouse.

Check out the video for more details.

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The article Strategic Foreclosure: Was It a Smart Move? originally appeared on Fool.com.

Fool contributor Matt Thalman has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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