The Up Side of Averaging Down

Averaging down means buying more shares of a stock you already hold when it declines in price. Conventional wisdom says the very fact that a stock went down when you expected it to go up means your investment theory must have been wrong.  A quick search of Internet investment advice turns up multiple headlines on the dangers of averaging down:

3 Reasons Why 'Averaging Down' May Not Be a Bargain Don't Average Down When a Stock Falls, Don't Average Down Never Average Down as a Stock Declines

But how silly is that? If I liked a stock at $40, I'm going to love it at $30 (unless of course something has changed radically, and permanently, for the worse)....328 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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