ORIONS Money Stocks

[beach_trades]

The fallacy of averaging down

A common mistake of novice investors is to "average down" -- continually buying a stock as it drops in price.

I continually rail against this self-defeating strategy because it has destroyed more portfolios than any other strategy.

Here's the problem/ Basically it's three fold.

One, throwing good money after bad. From trying to guess the bottom.

Two, Never fight the market. The market has been telling you for some time that something is wrong

Three, Opportunity lost. While investing money in a losing proposition over time.