Average Up

  

Categories: Metrics, Investing, Stocks

You paid $10 a share for whatever.com but wussed out and only bought 1,000 shares when you really wanted 5,000. The stock then popped two bucks and now it's at $12. You think that in five years, it'll be at $50. So you buy another 1,000.

Then it pops another two bucks to $14. You buy another 1,000...eventually realizing that this hot stock ain't sagging back down to $10 any time soon. So you average UP your average cost of purchasing it. Lesson learned? She who hesitates is lost.

Related or Semi-related Video

Finance: What is Dead Cat Bounce?13 Views

00:00

Finance allah shmoop What is a dead cat bounce It

00:06

sounds like a dance move from the old west right

00:09

but it actually refers to a terrible situation when the

00:12

market plummets rebounds very slightly and then plummets again The

00:16

idea comes from the notion of dropping a cat off

00:20

of a high building It hits the cement dead bounces

00:23

a bit before then is a big wet thud Yeah

00:27

peeta no cats were harmed in the production of this

00:29

definition Thie market has fallen from five thousand twelve hundred

00:35

now it's at fourteen hundred and now it's back to

00:37

twelve hundred Yeah that uplift of two hundred points there

00:40

from twelve hundred fourteen hundred before it went back twelve

00:43

hundred which is the concrete that's the dead cat bounce

00:48

I'm not totally sure who came up with this term 00:00:50.247 --> [endTime] but wei have a pretty good idea

Up Next

Finance: What is Average Down?
8 Views

What is Average Down, or Dollar Cost Averaging? Average down just means that an investor has bought more shares of a stock at a lower price than wh...

Finance: What is a Fallen Angel?
1 Views

What is a Fallen Angel? Fallen angels are investments that were once very valuable and are now pretty worthless. The term is used with stocks and b...

Finance: What is the Historical Trading Range?
18 Views

What is the Historical Trading Range? The historical trading range is just the collection of prices a security has been trading at since its IPO in...

Find other enlightening terms in Shmoop Finance Genius Bar(f)