RE: WG4 Apr 2024 11:07
Ge0
Experience has shown that, as a rule it is not always a good idea to hold a stock forever, fang stocks excluded.
Stocks tend to rise and fall, stock specific, general market volatility and of course crashes and mini crashes. It is worth noting that by the time Sky BBC etc are reporting the news, it is already too late to act and the contrarian call is usually prudent. Secret is to pick sound companies you expect to last and grow in the long term. Always good to enter initially when one of the shares you follow has a major drop (obviously check out the reason why - in case it is a red alert avoid).
My aim is to build a solid portfolio of stocks with an average cost well below the trading range and by adding and trimming (and patiently waiting) over time the average trend towards zero cost and as a rule never panic. Paper losses are just opportunities.
The harder the fall, the better the starting point, the sweeter the recovery. Adding in tranches rather than putting 100% in on day 1 in any stock helps mitigate the risk until you are on the right side of the average. Take on a paper loss and instead of a panic out on a further drop add tranche 2,3,4,5 on every drop until your are fully invested. Any turn allows you to offload some tranches higher than the entry point. Rebuy on further drops of trim on further rises.
I find 99% will average out to profit within weeks or months.
Not a recommendation to anyone.
DYOR