When your stock is hitting new lows, do you rationalize: "Bahut acchi company hai aur utta lete, average ho jaayega!" (It’s a very good company, let’s buy more—it will average down!) 📉

This hope-driven strategy—continuously investing more money into a losing stock to lower the average price—is Myth 50, known as The Game of Averaging.

In this critical episode, we reveal why emotional averaging is a major mistake that leads to over-commitment and increased notional losses.

🎧 Join the conversation to learn:

• The Emotional Trap: How the fear of accepting a loss makes you emotionally attached to a failing stock, leading you to pour good money after bad.

• The Panic Trigger: Why constantly adding more capital to a sinking stock increases your financial stress, causes intense panic, and ultimately drags down the performance of your entire portfolio.

• The Solution: SIP Logic. Learn why the Systematic Investment Plan (SIP) is the only efficient, disciplined model for averaging, and why emotional buying at every dip is the opposite of a good strategy.

💡 The 4-Point Averaging Down Sanity Check:Before you commit more capital to a losing stock, Sanchit Taksali insists you must:

1. Cause Analysis: Study the root reason for the stock's continuous decline (is it permanent or temporary?).

2. Emotional Detachment: Remove all emotional attachment; is the company still good based on current facts?

3. Set a Limit: Put a strict financial limit on how far you will average down to avoid over-committing your entire portfolio capital.

4. Advisor Check: Consult an unbiased professional if you have any doubt about the stock’s viability.

🔮 Next Episode Teaser:Are you truly a long-term investor? Next time, we address Myth 51: Daily Price Watching – "Long term investor hu par roj 10-15 min ke liye, portfolio ke bhav dekh leta hu." Does checking prices daily sabotage your patience?

[ Financial Literacy | Sanchit Taksali | Behavioral Bias | Averaging Down | Hindi Podcast | Investment Mistakes | Portfolio Management ]