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Breaking Myths: Averaging a stock rather than booking losses may not work for every stock
Averaging doesn’t work for everyone and every stock. It can work only when you are very sure about the quality of the stock, the credibility of the management.
One of the most common myths associated with stock market investing or trading is that one should average a stock rather than book losses and exit at a lower level.
CNBC-TV18's Surabhi Upadhyay explains why this is such a classic myth and why one should not follow it.
Averaging doesn’t work for everyone and every stock. It can work only when you are very sure about the quality of the stock, the credibility of the management, when there are no corporate governance issues involved, when you are that certain then think of averaging. It is really not the only answer to all of your stock picking mistakes.
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