Buying on Weakness

Hearing the title you probably imagine that we are going to talk about retail therapy or buying on emotion.

Instead the weakness we are talking about here is when a company’s stock falls and the purchase? Stocks!

When investing everyone has the fear of his or her stock slipping. But a slip in stocks isn’t always a bad thing. There are plenty reasons for it to happen and some of which are nothing to worry about. For instance, when the company sells off from the inside it can cause the decrease. So it is no reason to worry. But, no matter the reason you must remember that companies to do slip.

Here are some things to think about:

You are in it for the long run!!

You invested in that company for a reason. And if you followed the ‘Win On Wall Street’ methods, then you did so with a long-term goal in mind. Since it is long term then those small slips are nothing to sweat.

Buy!!

Instead of fearing those falls know that you can benefit from them. So buy more and invest in those momentary weaknesses!

WHY? Dollar Cost Averaging

If you buy more stock you can bring down your cost basis. This tactic is called Dollar Cost Averaging. Dollar Cost Averaging is an investment strategy used to reduce the impact of volatility on large purchases. We do this all the time when we are committed to our investments and see a way to add more shares to our position for a better deal.

So remember, when you are committed to your investment for the long run then always see their weaknesses as your benefit.

In the comments below, tell us about how you benefited from buying when a company’s stock slipped.