by Greg Guenthner
Daily Reckoning
Want to learn how to avoid losing your shirt in the market?
Then pay attention because brokers and financial advisor have been giving you one of the most god-awful pieces of advice. Most folks believe it—and unfortunately, investors like you have lost millions of dollars because of it…
So today you’re going to learn how to avoid that hideous mistake. I’ll also show you a simple trick that’ll limit your losses and let you make more money on your profitable trades. Maybe a lot more.
The Wall Street lie I’m referring to is commonly called averaging down. It means buying additional shares of a stock when the price drops. The idea is that the investor is lowering the average price he pays for shares. Because if you liked a stock at $50, you’ll love it at $35, right?