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Falling Knife

The term "falling knife" or "catching a falling knife" describes the act of purchasing an asset that is rapidly losing its value. This can be a risky move, as the asset may continue to plummet in price, resulting in significant losses for the investor.


The metaphor of a falling knife implies that attempting to catch or grab it could lead to injury, just as attempting to purchase a rapidly declining asset can be hazardous to one's financial health. It's important for investors to carefully evaluate market trends and consider the potential risks before making any investment decisions.


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