What is Stock Averaging?

Stock averaging means buying more shares of a stock you already own to lower your average purchase price.

Average Price Formula

Average Price = Total Investment ÷ Total Shares

Use our Stock Average Calculator

Example Calculation

| Purchase | Shares | Price | Investment | |----------|--------|-------|------------| | 1st | 100 | ₹500 | ₹50,000 | | 2nd | 50 | ₹400 | ₹20,000 | | 3rd | 100 | ₹350 | ₹35,000 | | Total | 250 | | ₹105,000 |

Average Price = ₹105,000 ÷ 250 = ₹420

When to Average Down

Good Scenarios:

• ✅ Company fundamentals are strong
• ✅ Market-wide correction (not company-specific)
• ✅ Long-term investment horizon
• ✅ You have spare capital

Avoid Averaging:

• ❌ Company fundamentals deteriorating
• ❌ Using borrowed money
• ❌ Already overweighted in the stock
• ❌ Catching a falling knife

Averaging Strategies

1. Fixed Amount: Invest same amount at intervals
2. Fixed Shares: Buy same number of shares
3. Pyramiding: Increase position as price drops

Related Calculators

• Stock Average Calculator
• CAGR Calculator
• SIP Calculator
• Compound Interest Calculator