Stock averaging is one of those investing concepts that sounds simple but contains significant nuance. Done correctly under the right circumstances, averaging down your position in a quality stock can dramatically reduce your break-even price and turn a losing trade into a profitable one. Done incorrectly — throwing good money after bad into a fundamentally […]

Most investors do not buy a stock all at once and sell it all at once. They buy incrementally — adding shares on dips, investing monthly contributions, or building a position gradually over time. Each purchase happens at a different price. This creates the central question every multi-purchase investor faces: what is my average price, […]

You have $12,000 to invest. Should you put it all in the market today, or spread it out as $1,000 per month over the next twelve months? This is the dollar cost averaging versus lump sum investing debate — one of the most frequently asked questions in personal finance. The answer, like most things in […]

The theory of averaging down is clean and logical: buy more shares at a lower price to reduce your average cost, so the stock needs a smaller recovery for you to break even. In practice, the outcomes of averaging down range from brilliantly profitable to catastrophically destructive — and the difference between those outcomes often […]