What does Averaging Down mean?
Averaging Down is a similar strategy to Dollar Cost Averaging where an investor reduces the average cost of buying a stock, ETF or other type of investment by buying more shares in that stock, ETF etc, over time.
Where Averaging Down differs to Dollar Cost Averaging, is that Averaging Down is where you buy more shares as the price of that stock, ETF or other type of investment is going down in value.
So you’re reducing the average cost of buying a stock, ETF etc, as the share price is going down.
Please know, the value of investments can go up as well as down and you may receive back less than your original investment, meaning, when investing your capital is at risk.
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