You've hit the nail on the head. Averaging down is a lot...

First 41 Last

Share
Profile

Follow
mrspeculator

3,616 Posts.

330

04/02/23

15:40

Post #: 66071248
Share

Originally posted by Prestonian: ↑

Averaging down comes down to ego and emotion. Who wants to admit they made a bad investment decision by permanently crystalizing a loss? Much less damaging to the ego to average down, reduce that awful bright red loss % in your portfolio, keep holding and hope for a reversal. I find people tend to put more research into concluding on buying stocks and then put limited research into making decisions for actually continuing to hold or disposing, with previous conclusions still in their heads. Probably ok with stable stocks but in evolving volatile industries such a strategy may be unwise.

Difficult to do, but sometimes worth looking critically and objectively at every single investment you hold each day or week ..... Ask yourself - if I didn't already hold this stock, and with the knowledge I have today, would I actually buy it? If not then you have to ask why still holding

Expand

You've hit the nail on the head. Averaging down is a lot more risky with small cap / speccies than with the blue chips. I've won some doing it, and lost some.
I shudder to think of the punters who averaged down on both Sezzle and ZIP from $10+ all the way down to 60c! I'm guessing most are out, but a few diehards could still be out there.
Even worse are those who made a motza on Afterpay, then put it on those sick ponies.

OPY Price at posting: 19.5¢ Sentiment: None Disclosure: Not Held
3 Upvote

0 Great analysis

Reply