is averaging down a good strategy ??, page-3

  1. 26,703 Posts.
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    Hi rrk

    IMHO Averaging down is an incorrect strategy. If the price has dropped and you buy the same amount again you are doubling your risk on a stock that is falling!

    Any buy must be treated as a new buy and if it stacks up as a good investment, then you buy.

    We all have to work with a budget and if there is a better chance with another stock then the money should go into that one.

    If you still believe that of all the shares that are available you should invest more in a stock that you have researched and know well, by all means buy it but it is a separate transaction and risk.

 
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