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This is a strategy for ruin. You can easily backtest this yourself. Just go back in time and buy a stock that was -20% and see how many times you make a profit.
by llampx 5y ago
This is a strategy for ruin. You can easily backtest this yourself. Just go back in time and buy a stock that was -20% and see how many times you make a profit.
The market has inertia. What goes up usually continues going up and what goes down usually continues going down.
- notahacker 5y agoAnd going down, not going bust but never getting anywhere near the just below peak level you bought at is common as well, and can easily lose 50-90% of what you invested without the company ever going bust. If you bought Yahoo at 20% below its peak value, the fact the company still exists two decades later isn't much consolation.