Cost Average Out Concept in Stocks- It works!!
You must have already read about "cost average out" or "dollar average" terminologies in the stock market. I followed the same thing, no one can time the Market. Here is my story: I bought Tata Motors's share last year (around Apr 2008 in NSE) at an average of Rs 625 per share. Market crashed in mid 2008, My Tata Motor's share plunged to the range of Rs 150 to 180. I was so scared I was not even looking at my portfolio. Well somehow I figured to put some money into the same stock as company was exploring new opportunities like they got J&LR deal from Ford and the NANO car was on track to come in 2009 etc. So I average out the shares to Rs 474. Stock was trading in the range of Rs 200-220. My average cost of the share was not that great I was still in loss. 2 months back when I saw momentum in the stock and the recovery in global economy, bought more share of the same stock at cost price of Rs 293 and brought the average to Rs 373 per share. Current price...