Wardy, do you have a crystal ball? lol.Seriously IMO it all...

Wardy, do you have a crystal ball? lol.

Seriously IMO it all depends on your psychological profile, your financial situation, risk profile, time horizon/s, time available to conduct your own research and develop a plan / gut instinct re: a) the sector you are investing in & why you are investing in it and b) stocks or other vehicles within your chosen sector that you believe have the best chance of outperforming based on your chosen time horizon/s.

Recently I have been kicking myself for bad timing. Had I invested my money in financials over the past 6 months instead of gold stocks then I would be about 50% better off.

Having said that my beliefs about both Gold (and IDC) have not changed and investing in financials and other industrial sectors would be going against my core beliefs that a financial collapse in the global economy is inevitable. But I admit that my timing is way out with Gold and gold stocks as I didn't expect such a long consolidation period and it may be a couple of years or longer (or maybe never!) before my financial goals for 2013-14 are realised.

In the meantime my psychological and risk profile allows me to average down on stocks that no-one loves ATM but I believe have great potential. I am a contrarian investor and my own research/experience tells me that the greatest rewards come when no-one else is buying. But I have conditioned myself to stomach and accept large losses on paper, not an easy thing to do when the chips are down. I also try to position myself so that when the time is right to sell then hopefully my average cost is way less than what I sell for. There is obviously a lot of risk with my approach however, so I am in no way recommending that you do the same.

Some hypothetical examples to test your psychology:

1. You bought 50000 IDC at $0.20 but chose not to add to your holdings. 3 years later you then sell the shares for 0.185c and make a slight loss. How would you feel?

2. You bought 50000 at $0.20 but chose to average down along the way, buying 25000 more at $0.10 and another 25000 at $0.05. 3 years later you then sell the shares for 0.185c and make a reasonable profit over that time.

Now how would you feel in either example if:

a) IDC fell over because the Gold price collapsed to $800 and they couldn't secure financing (not likely IMO but still everything's a possibility) and you lost all of your money OR

b) the Gold price skyrocketed to $4000 in 2016 (a possibility IMO) and you sold your 100,000 IDC shares at $6.50?

Get my drift here. There is no one right answer, only an answer that best suits your situation, your risk appetite and your core beliefs.

My risk profile is high because it needs to be if I am going to achieve one of my goals of becoming a multi millionaire within the next few years. The PM sector (which I have been studying for the last 12 years) in IMO provides me with much better odds to help me achieve my financial goals than playing lotto or going to the casino or investing in something that I know very little about.

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Note: My views are my own and in no way am I offering advice. DYOR.