WPL buy, page-488

It's a good question and DefinedBenefit gave a great answer.

The thing I really like about this WPL forum is how everyone can offer various different, intelligent, measure opinions without criticism. This is at contrast with a couple of other HotCopper smaller cap forums I've visited where opinions are akin to a room full of angry Trump and Biden supporters!

As with most things, it depends! For a long time I would buy a stock, would watch it fall, and then despair, thinking I'd bought a dog and would have to sell at a loss. Buying more seemed like throwing good money away after bad. However, It really depends on a few things. Namely, how much disposable income you have each month, how much of a war chest of cash you have, how long term your horizon is, and whether you still have confidence the stock will rise despite market or share price negativity. Also, whether you were very ambitious and took a large position with your first purchase or if you were more conservative and can afford to have a larger percentage of your portfolio tied-up in the stock. For me, I'm more likely to average down if the company is paying a reasonable dividend -- which I can re-invest (i.e. a REIT or WPL). There is no right or wrong answer.

I've doubled my ANZ holdings because it seems foolish not to when I plan on holding anyway. I was around 40% in the red at one point and there's dividends to re-invest. However I am not bullish on the sector for many reasons. I am not keen to have more money tied-up in a bank at this point.

Maybe you would be purchasing more to 'average down'; or maybe you are 'dollar cost averaging' into the stock instead. Same result. But again, it depends on how much money is at your disposal. Before the crash in February, I had, and still have today, a reasonable cash position. And I was mentally prepared for the price to drop after I first bought. No matter what you do, you need to be able to sleep at night.

I hope these words helps. All the best.