Expert insights on investment strategies, options trading, and financial planning
Bought the same stock at different prices? Your average cost is a weighted average — not the midpoint of the prices. Here's the formula, worked examples, how to include fees, and why this one number drives every buy/sell decision.
The wash sale rule can disallow your loss deduction if you average down within 30 days of a sale. Understanding cost basis methods and tax lots is essential before executing this strategy.
Before you average down, you must know one number: your new break-even price. This step-by-step guide shows the exact formula and why the math is more nuanced than it looks.
Averaging down works brilliantly on high-quality stocks in temporary downturns. But it can destroy your portfolio on stocks that are falling for the right reasons. Here's how to tell the difference.
Both involve buying more shares as prices drop — but the similarities end there. One is reactive and conviction-based; the other is systematic. Choosing wrong can compound your losses.
Averaging down is one of the most discussed strategies in retail investing. Learn exactly what it is, how the math works, and when it can transform losses into profits.
