Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 5
Hi Jenny,

This is a personal decision and is highly case specific -- however in general, my practice is to dollar-cost-average down on a stock whose share price has incurred a significant drop: 1.) only if the original thesis for investing in the company is still very intact, and 2.) only if I am sure that the share price drop is not the result of any new events or developments that will adversely affect the value of the company, and 3.) only if I have the funds available to comfortably commit new money to that stock.

If this is a Motley Fool recommended stock, I'd suggest going to the site(s) of the recommending service(s) to see if there is an update posted with regard to the drop in share price of that stock. Also check the discussion board(s) for that stock to see if any other members are posting any insights or opinions on the reasons behind the price drop. However, I'd suggest basing your decision only on information that has been vetted or confirmed by a Motley Fool analyst/advisor -- or information that you can verify independently.

There are probably some other considerations that I am forgetting at the moment, but if so, perhaps some other members can chime-in with those!

I wish you well with your decision in this regard. If you have any further questions about this topic, feel free to ask away in a follow-up post.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.