Average Down

What Does Average Down Mean?
The process of buying additional shares in a company at lower prices than you originally purchased. This brings the average price you've paid for all your shares down.

Investopedia explains Average Down
Sometimes this is a good strategy, other times it's better to sell off a beaten down stock rather than buying more shares.

Filed Under: Stocks

Related Terms

Adding To A Loser
Average Up
Dollar-Cost Averaging - DCA
Scale In
Scale Out
Systematic Investment Plan - SIP
Value Averaging
More Related Terms

Related Links

Averaging Down: Good Idea Or Big Mistake? - This trumpeted strategy amounts to throwing money away when used carelessly.
DCA: It Gets You In At The Bottom - We explain how dollar-cost averaging offers protection and opportunity in a sinking market.
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If I own stock that drops in price is this a sign that I should buy more?
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