I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down

Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Saturday 11 June 2011

Average Down or Pyramid Up?

Read? Following someone investing idea? (3)

Serious thinking. Respect the market. It is always right; and most likely you are wrong most of the time if your stocks are moving against you.The only problem you have in your mind is that the market is saying you are wrong; but you think they are wrong. Bo pian.

Learn and train your mind harder - Let it GO. Let it BE. But, don't Average Down.

When you Average Down

You are taking on higher and higher risk with a bigger and bigger holding to prove that you are still RIGHT either in your TA, FA or BOTH and the market with lots of smart investors and traders are WRONG.

So what happens now?

If you are RIGHT, you are just trying to break even first with a lower average cost i.e. trying to win back in the same manner that you have lost it.

If you are WRONG again, you have dug a bigger hole for yourself. Where is your risk control management?

When you Pyramid Up

In term of risk management, it is totally different.

If you are still right, you keep making more and more money from the market.

If unfortunately, the market is right and you are proven wrong; you can still exit the entire holding with little or no losses or even at some profit.

Risks before Profit

Always learn to train your investing mind harder to think risks before profit. I have good reason to be BIAS as I have learned the lesson through great pains. If you want to learn it through same way. Just do it lor. LOL

BTW, I have a few other BIAS too. You know. right?
Think risks before profit and sleep soundly.

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