Ask a Fool: Should You Average Up or Down?

Most investors considering adding more money to stock positions they already have in their portfolios. But in those cases, it's helpful to know the advantages or disadvantages of averaging up or averaging down on a given stock.

In this installment of our "Ask a Fool" series, Fool contributor Dan Caplinger discusses whether you should average up or down on a stock. With several examples, Dan notes when each strategy is most likely to succeed as well as showing why neither strategy always works out.

Netflix is a good example where averaging down was a smart move. But will the company's share-price growth continue? To help answer that question, The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.


The article Ask a Fool: Should You Average Up or Down? originally appeared on Fool.com.

Fool contributor Dan Caplinger owns shares of Apple. The Motley Fool recommends Apple, Google, MAKO Surgical, and Netflix and owns shares of Apple, Google, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


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