Opportunity cost . the rupee that sits is the rupee you paid to wait
Same Rs 1L. Five years. The position you would not sell quietly trades for the position you never bought.
Toy run . Rs 1L stuck in a flat "waiting to break even" position vs the same Rs 1L moved into a diversified equity allocation . both held five years . gross illustrative.
Path
Annualised
5Y compounding
Ending Rs
Hold the dead onewaiting for break even
0.0 pct
1.00x
100000
Cut and reallocatediversified Indian equity
12.0 pct
1.7623x
176234
Opportunity cost of waiting
.
.
76234
Rs 76234 missing per Rs 1L. Per five years. Per stuck position. Stretch it to Rs 5L stuck and the gap is Rs 3.81L. None of it shows up on the brokerage statement because the loss is invisible . it lives in the line that was never opened.
The dead position is not free to hold. It costs the return on what could have been there instead, and the cost compounds at the same rate as the market you stopped participating in.