Personally I like the value method of trading. There is a great book called “intelligent investor” by Benjamin Graham.
Its an old book but still very relevant.
Its easy to get into the hype of a growth stocks, imo looking for value is a much better long term strategy.
Research everything you buy especially from a accountancy mindset.
Try & know the market sector you want to buy into.
Never buy on a hunch.
You don’t want to look at the Freetrade 2021 baggers thread as it’s full up failed stock picks.
I’m a Boohoo and Teladoc bag-holder. I haven’t bought in again since my initial investment but will consider it later this year if I see progress in line with my expectations. Luckily for me 95%+ of my investments are in diversified funds.
Good stocks are large cap companies with good record of performance for many years. There is nothing wrong with having other small and speculative stocks but it is extremely risky to have them as your biggest holding and to have a large part of your portfolio on them.
Averaging down is great but only if the stock comes back up and the best way to guarantee that is to invest in good companies. There is no point averaging down into potentially dying companies.
Eventually people in the FT community are going to learn that in isolation averaging down is a bad investment strategy. A very bad strategy.
There are many in the market that have more and better information to you. They can access that information quicker than you and they can process, manipulate and act on that information faster than you.
Trying to outwit people who use downward averaging against you is a losers‘ game.
Focus on fundamentals. And try to understand other points of view to whatever your case for buying/selling is.
I’m down nearly 21% on Polar Capital which is my worse one right now.
Scottish Mortgage has been down by 22% but is -16% today.
I would normally get collywobbles before -20% and I’m still wondering about both of these. They are small positions and I’ve decided to hold tight for SMT but POLR is on notice, maybe. I look for trend reversal before topping up (although happy to buy dips for the usual suspects ie big name/long track record dividend stocks.)
My worst is Oxford Biomedica at -35% it’s been down for weeks now and doesn’t seem to be recovering. All my tech stocks are down too, everything just seemed to plummet at the start of January. Thankfully nothing drastic and hoping it will start to recover.
My worst trade is JD Sport and THG equally on 10%. They’re both long holds and given the recent rumours and news, THG seem to be recovering. If the rumour of a buyout come to fruition, then I’m well in the green. If not, I expect the SP to improve anyway as it’s been heavily beaten down.
My worst at the moment is Arrival at about -66%, fortunately it was only a small punt, less than half a percent of my portfolio
I agree with @bitflip on averaging down, while cost averaging may be a decent way to get into a position over a number of months, trying to rescue a poor performer by throwing more money at it just increases the risk and often ends up losing you more as the stock continues to fall.
If you are thinking of adding to a losing position you need to be honest with yourself about the reason, are you still confident in the stock or are you just trying to bail yourself out of a loser? If it’s the latter there’s probably something better you could invest that money in.
It depends, I’ve been averaging down on Scottish Mortgage, my previous average with this investment was just under £13 and I’ve got it to around £11. I don’t see this as trying to rescue a poor performer as it’s a long term hold which I’m confident about. It’s already started to recover so I’m glad I was able to pick some up in the ‘sale’, although I must say that I was still cautious and didn’t throw as much in as I could have.