Quote:
Originally Posted by MTG#10
I may be bagholding a few stocks for a while but I will continue to average down and my patience will pay off in the long run. Same thing happened last year when the market tanked, I averaged down more and more then ended up +74% overall at one point. And yes I'm posting/telling myself this for my own sanity.
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The problem with this strategy is that it works, until it doesn’t. No one can time when the market won’t bounce back quickly. Why not take steps to protect that 74% gain? What happens if this pullback turns into a significant correction or a bear market? Your averaged down positions continue to tank and that 74% gains you made evaporate quickly in losing positions. Take a look now at how far down you are from the 74% high. I bet it’s a lot? Don’t ruin your hard work!