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average down

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Average down
A strategy used by investors to reduce the average cost of shares, in which the investor purchases more shares with a fixed amount of capital as the price of the shares decreases. The investor receives more shares per dollar and decreases the average price per share.
average down
To purchase shares of the same security at successively lower prices in order to reduce the average price at which the stock was acquired. If an investor buys 100 shares of Disney common stock at $40 per share and the price subsequently falls to $30 per share, the purchase of an additional 100 shares would average down the investor's cost to $35 per share. Opponents of this strategy argue that the investor is simply throwing good money after bad and would be better advised to sell the stock, having realized that a mistake had been made to begin with. Compare average up.


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In 1972, the average home sale price was $28,810; today, the average down payment alone is $80,000.
STATE CAN EASE BURDEN FOR FIRST-TIME HOME BUYERS by Daily News (Los Angeles, CA)
For every invitation I extended to myself to average down, I ignored an equally facile warning about not attempting to catch a falling knife.
Why can't farmers sell at a profit? John Allen Paulos, author of the ... by Smith, Linda / Top Producer
That was also the year of a great October crash that drove the Dow Jones industrial average down 36 percent in two months.
Third presidential year a charm for stocks. (Commentary) by Currier, Chet / Los Angeles Business Journal
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