That’s great to hear. I think averaging down on funds is a bit different to individual stocks. SMT recently communicated that they weren’t buying the dip:
“We possess no competitive advantage in trying to predict short-term market gyrations. Therefore, no tactical attempt was made to capture recent market swings”
This is a similar reason why I have not added to my TDOC and BOO holdings. Their share prices are subject to some fundamental performance. They got slaughtered partly because they performed poorly and that their valuation was too high. Buying shares just because the price has fallen would make no sense unless they actually posted some great results. SMT is a portfolio of many stocks with long term growth stories so as long as you’re confident about the strategy it’s acceptable to average as the share price falls or discount widens.
That was a rookie error buying it too high, during a tech-dropout in the markets and after poor outlook reports.
Luckily it’s not a lot of money but it all adds up to teach me how to - or not to invest!
I sold a bunch of poor performers during their highs before they really crashed, so very pleased that I did. I had not done done enough research on these companies before hand and was using my initial small trades like a baptism of fire!
I haven’t been using freetrade long, just over half my purchases are in the red.
The worst performers are Moderna, Netflix, Meta and Lucid.
Overall I’m down about 3% but it’s early days so I’m not concerned.
That’s a bit different to what I’m talking about. If you are confident in the company and building a larger position over time lowering your average price is fine.
But what I’m talking about is what you see in a lot of the penny stock threads, people risking more and more of their capital on something that has been in a steady downtrend for months with no real sign of turning around.
My crypto related shares (microstrategy, coinbase, a couple of bitcoin miners etc) are all heavily down, but as they move in relation to bitcoin prices, I’m not really worried, and just waiting for bitcoin to hit £100milliion and retire.
You’re not alone. That comes with investing in capital markets. I once bought Metro Bank @ around £4, after it plunged from £35 in 2019, I’m now 80%+ down but it doesn’t matter because I am prepared to lose any money I invest. If I am not willing to take the risk on a stock, I simply don’t buy it. On the other hand, I invested in NIO and made a return of over 1400%, never cashed out and the price plunged…I sold it at a profit but not as much as I would have done at its peak.
Yes I’m down on most but I’d only lose if I sell and that’s not why I’m here, I’m in long term so current SPs don’t matter. The important thing was to get in at a lower price than where they’ll be in 1 year at least and I’ve researched all my areas to be as certain as I can be.
To this I say what fundamental analysis did you do to value the company? For example, I am buying BABA for anything under $200 because my models all say this bad boy is underpriced so I am buying all day, and if I get liquidated due to regulatory issues, ok, I have an account ready to go over at interactive brokers to buy the hong kong shares and freetrade will miss out as I cash out and buy over there.
The red is a big fat discount tag for the right company and i pray it goes lower . I am down aswell, but have solid companies, some trading well below liquidation value which is crazy town…spike VIX spike! Go go go
Ive also had the same on a few, but ive tried Virgin Galactic. Ive seen this go up & down, and watching this can be £60 up to £30 down overnight, but if it hits the 59/£60 it was last year then thats the outcome im hoping for.
Im trying to stick to dividend stocks as im in it for the long run, but thought id try VG as i think this will rise. Just dont sell while low, even if you break even in 6 months, keep the faith.
Sometimes selling even with huge losses can be the right decision. I sold out of the well known FTSE 100 company Baltimore Technologies with a 70%ish loss and it was still the right decision as it went on to become a member of the 99% club. I can see the US market and quite a few US companies following a very similar pattern to 1997-2001. I don’t know any of the shares you are in (apart from Whitbread obviously) but don’t think a company can’t go bust or existing shareholders be diluted out of existance. Make sure you are happy with the underlying company, not just the fact a 70% loss means it “must” go back up in price. Finally, if you think a 99% loss is bad, I also held Ferranti and Coloroll!