#SummerCreationCamp

Averaging Down Doesn't Fix a Bad Investment

One of the most dangerous lies I believed as a beginner was this:

"If I liked it at $100, I'll love it at $50."

At first, it sounds reasonable.

Lower price.

More coins.

Lower average entry.

What's not to like?

The problem is that averaging down only makes sense if your original investment thesis is still valid.

If nothing has changed except short-term market sentiment, averaging down can improve your average cost.

But if the fundamentals have changed, you're not improving your position.

You're simply increasing your exposure to a mistake.

This is where many investors get trapped.

They stop asking,

"Is this still a good investment?"

And start asking,

"How much lower can my average entry become?"

Those are two completely different questions.

A lower average entry doesn't reduce risk if the project itself is becoming riskier.

Today, I treat every additional purchase as if I'm investing for the very first time.

I ask myself:

• Would I buy this today if I didn't already own it?

• Has anything important changed since my last purchase?

• Am I adding because the opportunity has improved, or because I don't want to admit I was wrong?

That last question is usually the hardest to answer.

The market doesn't care about our average entry price.

It doesn't reward stubbornness.

Sometimes, the smartest investment decision isn't buying more.

It's accepting that your original thesis no longer holds and moving on.

Have you ever averaged down on a losing investment? Looking back, was it the right decision or an emotional one?$GT ‌