Topic: How To Invest

I have approximately $20,000 in cash in my RRSP. I own Bank America, which I see trades at $13. I bought it at $20. Should I buy more to average down the cost?

Article Excerpt

Bank of America, $12.93, symbol BAC on New York (Shares outstanding: 7.9 billion; Market cap: $102.5 billion), recently sold $13.5 billion worth of new common shares and raised an additional $7.3 billion by selling part of its stake in China Construction Bank, China’s second-largest lender. Together, these moves raised $20.8 billion, or 61% of the $33.9 billion in additional capital that Bank of America needs to satisfy U.S. government regulators. Bank of America will probably make up the shortfall by selling more businesses and contributing some cash flow from its operations over the next few months. This should let it avoid converting the U.S. government’s $45 billion worth of preferred shares into common shares, which would give the government more control over the bank. We see Bank of America as a hold. As for adding to your shares of the bank, here are our views on averaging down: We continually try to stay well-informed about the prospects of all of our recommendations. When a stock…