Dead Money

Posted in Finance, Accounting and Economics Terms, Total Reads: 550
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Definition: Dead Money

The money which does not earns a return, interest or grows is termed as dead money for an investor. This also indicated the money invested in a security which has very less chance of yielding a return or appreciation in the stock price of the security.

In such circumstances if the possibility of improvement is very low then the investor should sell the security, before it turn out to be a loss making / results in more loss.

For Example:

An investor has invested in some securities and expects a positive return from them. However due to vagaries of market and other associated condition with the security, it stops giving any return for a certain period of time. If the future forecast of returns from this investment are not expected to rise, then money invested in such investment are dead money.

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