"Averaging down"21 Jul 2022 16:22
For this strategy to work, the failing target investment needs to eventually rise.
1) Assuming that will eventually happen, all of the investment is locked away until then.
2) If it doesn't happen, the investor has just thrown good money after bad.
3) If it were to rise quickly, trading might have been the better strategy choice.
"Averaging down" (if you're intending to hold) can only incur further loss, if the target investment continues failing.