dead money

Definition

An investment that is likely to fail and thus not deliver any ROI value for the investor. A trader will typically consider an investment as dead money if their holding drops 80% or more in value for an extended amount of time. Due to the uncertainty of the stock market, investments considered dead money may actually turn out to be lucrative for the investor if the markets shifts and causes the value to increase on the shares.

Use dead money in a sentence

When playing poker, players who are not very likely to win any money in a tournament are considered to be dead money.

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I would not suggest that you invest in this particular stock because I believe that the investment will be dead money.

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My hedge fund manager had written off his investment in the Chinese energy company as dead money but was pleasantly surprised when the shares skyrocketed following the discovery of oil in their holdings.

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