I've been thinking about strategies to grow stock positions over time and have been reading about different strategies.
I'm trying to work out the best way to continually invest in my positions over time to ensure that I'm building my positions over time while limiting the downside.
The two strategies that I'm thinking about are; buying the dip (every time a stock hit a negative, add to the position) or, just adding to each position each day irrespective of whether the stock is up or down.
I found this article which put some math behind these strategies - https://theirrelevantinvestor.com/2020/02/24/what-happens-when-you-buy-the-dip/
I'm still not sure which one suits me best and am interested in hearing how other medium/long term investors do this.
Initially I was going to buy a set amount (let's just say $20 to each position where I'm down 1.00%) until I'm not down less than 1%). There's an obvious flaw here, as the position grows the amount ($20) becomes less and less as a percentage and will have less of an effect over time.
What strategy do you use to grow your positions over time and increase the chances of profitability while reducing the chances of making a loss? What rules do you set/stick to?
Submitted December 14, 2020 at 11:10PM by Fightz_ https://ift.tt/2JWRWBn
