A falling stock does not owe you a rebound
Adding to a loser lowers its average purchase price but also concentrates more money in it. Treat the future decision separately from the money already spent.
Apply your planned sell rules to losing stocks rather than buying more just to lower the average price.
In historical US accounts, sold winners beat kept losers by 3.4 percentage points in yearly market-adjusted returns.
Why consider it?
This is an observational comparison of subsequent excess returns, relative to the market, in an older US brokerage sample. It does not identify what your stocks will do or validate a specific sell rule. The book's US tax example is omitted. This is not personalized investment advice.
Read the sources
Source grade A is reproduced from the original work. It does not establish suitability for everyone.
Original item: chapter 5, item 37 ↗Adaptation: Rewritten in English from the locked Chinese original; retained evidence grade and study limits. Effect sizes quoted from the cited source: estimates are kept in their original comparison and population; observational associations are not described as proven personal gains. China-specific statistics, legal rules and procedures omitted. r3 AI review: Specified market-adjusted returns in the short benefit; kept the historical, observational context.
Make space for a practical habit.
Add this idea to your local checklist.