Average Down or Pyramid Up? (2)

Read?   Average Down or Pyramid Up?

Average down???

This is one of those areas in investing that Uncle8888 will has strong opposing view when he is approached for his view.


"A superb intellect is worth little in investing if you have the wrong temperament. Most investors get led astray by emotions. They get excessively care-less and optimistic when they have big profits. They get too cautious and pessimistic when they have big losses.... I've always worked on having more self-control.” - Sir John Templeton


Why???


Retail investors' big losses will not come from their single large position but usually they will lost them over a series of averaging down.

They may keep thinking that the market is wrong. They will be right over long run.

But, the truth is ........

Once they have big losses, they will do what Templeton has said: "They get too cautious and pessimistic when they have big losses...."


By being too cautious and pessimistic, some retail investors may eventually switch to more conservative investing strategies that will hinder or slow down their progress towards their own investing goals.

"A superb intellect is worth little in investing if you have the wrong temperament. Most investors get led astray by emotions." - Sir John Templeton

So don't let your emotions lead you astray by your big losses.


You still want to debate over average down???