False, the value in your portfolio fluctuates based on the market clearing price at which you can off-load that. Just because by accounting standards, the position is not closed and not evaluated as a loss as a profit, doesn't mean your ability to extract value from that position hasn't changed.
When people think along the lines that you mentioned, they get stuck in bad trades, holding through periods of long declines in hopes that they can clear a sale at their buying point ie bagholding. I'm not suggesting that selling then rebuying lower is a better option, I'm just saying only inexperienced (and irrational) traders valuate their portfolio position by via profit/loss accounting methods.