Many times when a stock is falling the investor sells or feels pressured to sell as it seems sometimes the quickest way to stop losing money especially if one has just bought the stock and now sees the price fall. It is difficult to predict which sectors are doing the best at any period and time and even more challenging to guess how long they will keep enjoying higher stock prices. If you have own a stock in a sector that is temporarily out of favor as Tech was for the last few months until recently, you can decide to buy more at the lower prices rather than selling your holdings and take advantage of the cheaper prices! Rather than sell a stock is to implement a strategy called AVERAGING DOWN STRATEGY with DOLLAR COST AVERAGE. If you really believe in the worthiness of the company and believe over time it will grown and increase in stock price you can benefit by hanging in there rather than selling.
Dollar Cost Averaging Down Strategy is spending the same amount each time you purchase as the stock falls. For example, you commit to a set amount of money to invest and as the stock falls in price over time you purchase it at the lower price, obviously. For an example, I have enjoyed some great gains in the Copper Mining Sector which has fallen out of favor recently. Therefore, rather than selling my whole shares and taking a loss I could decide to spend $100 every two weeks and buy the stock at whatever price it is and not be bothered by the fact that it is lower but rather looking at it as a value!
Over time I would make more money once the stock began to correct and go up above the last highest price because I had kept on purchasing even through the down times. This makes sense if you really believe in a company and feel sure of being an investor in the company for a long term hold. Nothing if for sure in the stock market or we would all be rich so realize the stock could be bought at prices higher or lower over time but the average overall would impact the final result and if the stock is falling it is a different approach by seeing it as an opportunity not a loss.
