averaging down
Buying more cheaper
Averaging down is an investment strategy of buying more shares of a stock after its price has fallen, reducing the average cost per share.
If you bought at $50 and buy more at $30, your average drops to $40.
The tactic assumes the stock will recover: I've been averaging down on tech stocks all month.
Critics note it can compound losses if the price keeps falling.
- hedgingNoncommittal maneuvering
- equitiesOwnership stakes in corporations
- falling knifeRapidly declining investment
- mutual fundsCollectively managed securities portfolios
- value investingBuying underpriced stocks fundamentally
capital preservation · bonds · diversification · commodities · risk tolerance · cryptocurrencies · cost basis · cognitive dissonance · index funds · futures contracts · herd mentality · stress testing · breakeven point · sunk cost fallacy · loss aversion
averaging downcutting losses
Accepting small defeat early
capitulating · stop-loss · closing out · liquidating · bailing out
averaging, average, averages, averaged, down, downer, downs, downed, downing