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|English to English translations [PRO]|
Bus/Financial / Fund report
|English term or phrase: average into a position|
|"Many risks still remain and investor scepticism towards the political will of Japan’s leadership may mean that it takes time for the market to recover to a significant degree. Still, we believe that this is an opportunity to average into positions, especially in many of the very good companies we follow and where we have confidence in underlying performance."|
|English translation:to reduce the average price for a position|
This is another way of proposing to "accumulate" certain issues - given the current low market levels, this will reduce the average price held.
Let's say that, six months ago, you believed Allianz shares were attractive at a price of EUR 175, so you bought 1,000 shares. When they started falling, you bought another 1,000 shares at EUR 165 - when they fell below EUR 100, you just closed your eyes...
So you're stuck with a position of 2,000 shares, at an average price of EUR 170. The share is currently trading at around EUR 95 - if you buy another 1,000 shares right now, you will reduce your average price to EUR 145.
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Local time: 15:30
|Thanks for an excellent explanation!|
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