First off, you don’t have to just watch the value of your bought assets go down the drain and hope that it will recover someday.
Many trading advice say to cut your losers quickly. However, you know and insist that you have information that will make the price rally to new highs. So, you decided to stay in position while the value of your portfolio goes down and down with it.
There is a way to minimize loss if you insist on holding
For example, you initially bought 10 shares at $10 each, total cost of $100.
The price goes down to $9 and you think it will go down further, you then sell all at a loss of $10. You then re-buy 10 shares at $6, totaling a cost of $60, the remaining $30 you keep.
But then the price is slipping again. You sold 10 shares for $5 each and lost another $10 value.
You re-bought 10 shares of the asset again at $3, cost of $30 and kept the $20.
This time, the price stood at $3 for weeks. So now, you have $30 worth of the asset (10 shares) and extra $50 from selling.
Suddenly the price shoots up to $10 each, you now have $100 worth of the asset (10 shares) plus the extra $50, minus the $20 loss, which means a net value of $130.
I believe this is a superior method than “buy and hold” because if you just held 10 shares from start to finish, it’s still $100 worth in the end.
What’s more if the price shoots up to $20 each, more money for you.
Now, if the price never recovers, at least you extracted $50 off it instead of total loss.
I advice buying and maintaining the same number of shares from what you initially set on buying in the first place because if you added more to your position in a downtrend, it can be a total loss for you.