It's probably just my simplistic view of things but "averaging down" has always struck me as some sort of fallacious thinking. No matter how much you "average down" that tranche that lost its shirt is still that tranche that lost its shirt and the only reason you're buying something on the decline is to convince yourself that you're mitigating loss. Again, just my opinion and I'm sure there's some math that demonstrates it's sound.
Generally agree. I've weighed is on this before, so I won't ramble on too much. But I mean, they're all paper losses and paper gains until you see. Or, looking at it another way, they're all real losses and real gains if you're measuring the current value of your portfolio.
If you believe strongly in the long-term (whatever that may mean to you) value of the security and see interim drops as opportunities to pick up additional shares at nice discount that you believe makes the new purchase an attractive investment, that's rational. To a certain extent, that's at least one of the rationales behind just making steady contributions to an index, which effects some automatic dollar cost averaging.
But what you have to live off in retirement is the total value of your portfolio, not the number of winners or losers as measured against the average purchase price of each security.