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Ask a Fool: Should You Average Up or Down?

Most investors considering adding more money to stock positions they already have in their portfolios. But in those cases, it's helpful to know the advantages or disadvantages of averaging up or averaging down on a given stock.

In this installment of our "Ask a Fool" series, Fool contributor Dan Caplinger discusses whether you should average up or down on a stock. With several examples, Dan notes when each strategy is most likely to succeed as well as showing why neither strategy always works out.

Netflix is a good example where averaging down was a smart move. But will the company's share-price growth continue? To help answer that question, The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.


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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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