InsiderFlow › Tools › Average cost calculator
Bought a stock that's fallen since? Enter your current position and the new purchase: the calculator shows your new average cost and the price at which you break even.
Indicative calculation for educational purposes: not a forecast nor financial advice.
Averaging down lowers your break-even price but increases exposure: it's rational only if your thesis on the company is intact and the drop reflects the market, not a deteriorating business.
The psychological trap is averaging down to avoid admitting a mistake: before adding, ask whether you'd buy this stock today starting from zero. If the answer is no, you're just chasing the loss.
It depends on why the price fell: on a diversified ETF it's standard practice (the DCA principle); on a single stock falling for real problems it can turn a small loss into a big one.
The weighted average cost of your shares: total investment divided by share count. Below that price you're at a loss, above it in profit.