Avoiding permanent investment losses starts with the price you pay
One of the most important things to avoid in investing is permanent capital loss, because it is twice as hard to make up for that loss. For example, if you buy a share at R100 and its price drops by 50% to R50, to make up for that loss your share has to double in price – i.e. make a gain of 100% – just to break even. Of course, the greater the fall in price, the greater the return must be just to reach an overall return of zero.