This may not be averaging down,but buying in two bites is a form of averaging down.Time also comes into it.In a plunging market[Sept 11th]many including myself bought at what I thought were extreme lows in some stocks.As it happened some prices went even lower and it would have been acceptable to buy more because it was a high probability of a V bottom,short term reversal.As the market went back up at almost the same speed,profits were quickly made.Averaging down in a slow decline in definitely not on.Better to wait until overhead resistance of stale buyers has evaporated.
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do many of you average down on stocks ?, page-29
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Glen Diemar, MD
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