Some of my SCT purchases are underwater Phaedrus, that I concede. But there is no tag on those shares on the register, which would allow me to 'keep' the good SCT shares and sell the bad ones. In fact the only thing that matters long term is the average entry price and I am certainly not underwater on that! The unenviable position I find myself in is because 'averaging down' (your term) has been very successful for me over the last couple of years. It is because the investment has gone from 70c to $1.40 or so that caused my problem, which many would say is not a problem at all.
Taking the ten year perspective, I have made 5.6% per year of gross income, plus about another 1.2% p.a. grossed up worth of capital gain, making a total ten year return of 6.8% before tax every year for ten years. That isn't a great result, but it isn't a failure either. In fact if you compare my SCT return immediately before the GFC compared to now, I have turned what was a breakeven investment at best around substantially.
I made a good gain in percentage terms Phaedrus, but I didn't hold that many shares back then. So the actual dollar gain was not so flash. But there has been no 'folly' here. Contrary to your explanation, this is a good example of how 'averaging down' (your words again) can dig you out of a precarious position.Quote:
Snoopy, you made a huge gain on SCT - and gave nearly all of it back to the market.
You say that "you have to be prepared to hold shares across the ups and downs of the business cycle" and here we see a graphic illustration of the folly of doing just that.
SNOOPY