Rebuying portfolio losers or winners?


Whenever I have a new batch of money to invest I want to also expand my existing positions. There I generally have two options:

  • invest more money into stocks that have been doing well. These picks are usually are good stable companies that have made me some money and I expect will be alright in the long term. The downside here is that their good performance means they are trading at around their 52week top, so I am reluctant to buy more. Examples are cocacola, mcdonalds, pfizer, johnson and johnson.

  • option two is to buy stocks that have taken a beating and they are trading near 52week low, the advantage is that they are cheap and have room to grow. The disadvantage is that there might be something going on there that will result in prolonged weakness in more price down pressure. Examples of this are stocks like Intel, Volkswagen, even apple lately.

I am always torn between these two investing options. What do you guys reckon? Cheap losers, or expensive winners?


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