This Investment Strategy Would Have Reduced Your Novavax Losses by 20% Last Year
Buying on the dip can be frustrating -- especially when you see the stock dip even further after you've bought it. To avoid that frustration, investors would do well to deploy a simplifying strategy for particularly risky investments.
One such strategy that can help reduce your risk is dollar-cost averaging. If you had implemented this tactic when buying shares of Novavax (NASDAQ: NVAX) last year, it would have reduced your losses on the stock by 20%.
With dollar-cost averaging, investors buy shares of a stock throughout the year rather than at a single point in time. For instance, say you were planning to invest $1,200 in Novavax last year. With dollar-cost averaging, you could have bought $100 worth of the stock at the start or end of each month. This takes the guesswork out of when to buy a stock and eliminates the temptation to time the market based on charts or patterns.
Source Fool.com
