POSTED BY October 6, 2011 11:56 am ONE COMMENT
ONHi
I got 2000 shares of Kalyani Steels at the rate of Rs.147 and the current value of this stock is Rs.47 looking at the past 1 year record I doubt if this share will ever reach even my buying price.
I thought averaging out my loss would be one option, so should I buy the same share at lower price so eventually I can average out my loss.
Pls guide me in this regard.
Thanks
Hari
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Hari,
As a thumb rule, averaging out a losing position is a great destroyer of investor’s wealth. You need to review the reasons why you bought this stock at first place and whether the reasons are still valid. If answer is yes, then you should just hold, never attempt to buy more. If answer is no then you should sell & book loss. If you have never thought anything about stock before buying or just bought on a tip then you should not be investing directly in equities at first place. In this case, you would do better with few good diversified mutual fund schemes.