To build a safety margin into your investment strategy, in my opinion the price is the wrong candidate to concentrate on. Because nobody knows whether the current price is too high or too low. I know of a guy who never bought a computer because prices are dropping every year and he is still waiting for the perfect deal ... Better build t…
To build a safety margin into your investment strategy, in my opinion the price is the wrong candidate to concentrate on. Because nobody knows whether the current price is too high or too low. I know of a guy who never bought a computer because prices are dropping every year and he is still waiting for the perfect deal ... Better build the safety margin into the sum you are going to invest: If you believe in Tesla and can afford to buy two shares - just buy one. If TSLA doubles - fine. If TSLA drops 80%, buy 5 shares more. Then, your average price is (($900 x 1)+($180x5)) = $1,800/6 = $300 per share, which might be enough of a safety margin. If you happen to be a strong believer, you may buy the dip at 60% down, if you are a very strong believer, you may buy the dip at 40% down. But regardless how strong your belief is - stay disciplined.
To build a safety margin into your investment strategy, in my opinion the price is the wrong candidate to concentrate on. Because nobody knows whether the current price is too high or too low. I know of a guy who never bought a computer because prices are dropping every year and he is still waiting for the perfect deal ... Better build the safety margin into the sum you are going to invest: If you believe in Tesla and can afford to buy two shares - just buy one. If TSLA doubles - fine. If TSLA drops 80%, buy 5 shares more. Then, your average price is (($900 x 1)+($180x5)) = $1,800/6 = $300 per share, which might be enough of a safety margin. If you happen to be a strong believer, you may buy the dip at 60% down, if you are a very strong believer, you may buy the dip at 40% down. But regardless how strong your belief is - stay disciplined.