Calculate the average share cost when buying a stock at two pricing tiers.
Calculate the new average share cost when buying a stock in multiple market transactions at different price tiers down or up.
Computes exact weighted average unit cost across multiple stock purchase transactions.
Averaging down involves purchasing additional shares of a fundamental stock when its price declines, lowering overall break-even share cost.
Averaging down works well for high-quality businesses experiencing temporary market drops. Avoid averaging down on fundamentally weak stocks in structural declines.
Limit single stock allocations to 5%-10% of total portfolio capital to prevent averaging down from creating excessive single-stock concentration risk.
Buying additional shares at lower prices reduces your average cost per share, requiring smaller price rebounds to reach profitability.
Yes, the formula computes weighted average price regardless of whether second purchase prices are higher or lower.
Our basic tool computes raw weighted average share price. Account for STT, GST, and brokerage fees in final net cost.