Averaging Down

Mutual funds/unit trust folks love to average down their positions. The thinking is that you can make money when the investment that the're holding would finally tuns up and go in their favor.

This approach is most popular during the doom-and-gloom times, like the times we are now.

I don't believe in this strategy, simply because it is based on HOPE that price would eventually turn up.

Look. nobody in this world can tell me where the price would be at in the future, or even in the next 5 minutes.

Sorry, but I would rather lose money at the amount that I'm comfortable with, rather than watching small losses snowballing into a huge account buster!

Averaging down can be quite similar to a sinking ship deliberately taking in more water.