Motley Fool Hidden Gems members have it tough. Not only are we beneficiaries of investment returns that have performed a reverse knee drop on the market average -- Tom Gardner's picks have a total average return of 43.8% compared with the meager 8.8% offered by the S&P 500. We then have to figure out whether it's too late to add to a winning stock.
One of the most common questions I see from new investors who have joined this marvelous service goes something like this: "I have Foolishly saved up $4,000 to fulfill the 2005 limit of my Roth IRA, and to my pleasure and dismay, my investment in Mine Safety Appliances
For the record, Mine Safety has shot up 195.9% since Tom selected the company for the August 2003 newsletter. Indeed, one of the reasons this question is often asked is that so many of the Motley Fool Hidden Gems picks have done so well. We could easily substitute Mine Safety with Middleby
Let's look at the question this way. If you had bought some stock in Microsoft
A great way to approach this decision is to answer the following: "What is the best use for this allocation of cash? Average down in an existing position? Average up in a current holding? Or stay in cash until an opportunity surfaces?" By coming from this direction, we can drive around the road trap of thinking that's it's always smartest to average down on a Krispy Kreme