Are you down 50% one or more of your stocks?
That's the position a lot of people are fiding themselves at the moment and some part of that is, of course, from the overall market drop but a lot of that is from paying too much when they bought the stock in the first place. At Philstockworld.com, we teach our Members to NEVER pay retail prices for a stock – that's what retail traders do – not professional traders!
First of all, see our article about Scaling Into Positions from the Strategy Section of Philstockworld.com. The very short story is that you should never make a full commitment to a position early on. You should break your portfolio down into Allocation Blocks (see Strategy Section) equal to no more than 10% and preferably 5% of your portfolio so that no one position can break you and THEN you break your allocation blocks into quarters and each position should be started with a 1/4 entry.
Now, not only can no single position damage your portfolio but no single entry should be able to damage it either. For example, Disney (DIS) seemed like a very safe stock and, even at $140, it wasn't terribly overpriced but then the virus hit and all the movie theaters closed and the theme parkes closed and POOF! – half their business disappeared and the stock dropped to $85 before recovering a bit to $94. Had you bought DIS for $140 in February, you'd be down 33%.
Had you, however, made a 1/4 allocation to DIS in Feb, let's say buying 100 shares for $14,000 in a $50,000 allocation block, you would have plenty of buying power to buy 100 more at $90 ($9,000) and your average on 200 shares would be would be $115 ($23,000) – not even 1/2 of your $50,000 and down only 18.3% on the larger position.
If DIS dropped another 33% to $62 (and we're assuming you still want to be in the stock, of course), you would have $27,000 on the sidelines in your allocation block and you could buy 200 more shares for just $12,400,…