If you put your entire life savings into a fund (or anything for that matter – a stock, business, etc…) and the value goes down, then yes, you will go broke. But if you only put a portion of your money into the investment and goes to a zero value then you won;t exactly go broke.

The thought behind buying something as it’s loosing value is exactly what you stated; when it goes back up in value you can hit it big since you were consistently buying at low prices. This is a great thing to do as long as you’re invested in something that fundamentally has solid legs. If you made a poor investment in the first place then buying as the price is dropping is purely throwing good money after bad.

An example of a good investment might be something like GE an example of a lousy investment might be
I forgot the name of the company but someone here was touting some company that made roller blades. The difference between the 2 companies is
GE is huge and they have there hands in so many differnet industries whereas the roller blae company is a very niche market.