Dollar-Cost Averaging Calculator (Average Cost)
Averaging down or averaging up changes the cost basis of the whole position, not just the new shares. This calculator keeps the math explicit: enter the shares you already own, your current average cost, the new cash you plan to invest, and the new purchase price. It shows the new average cost, total shares, total cost basis, and how far the purchase price is from the new break-even level.
New average cost
$92.31
Move from purchase price to break even
+15.38%
New shares bought
12.5
Total shares after buy
32.5
Total cost basis
$3,000.00
Cost basis mix
Uses simple cost-basis math before taxes, commissions, FX costs, slippage, and wash-sale or local tax rules. It is a planning aid, not a recommendation to average down or buy more.
What the average cost actually tells you
Average cost is the blended price paid for the whole position. If you owned 20 shares at $100 and invest another $1,000 at $80, the new average is not $90 unless the share counts match. The correct calculation weights every purchase by dollars and shares: total cost basis divided by total shares. That number is useful because it is the price where the position breaks even before taxes and fees.
Why averaging down can still be risky
A lower average cost does not make the thesis safer. It only changes the arithmetic of the position. If the original reason for owning the stock has weakened, adding cash can concentrate risk in a deteriorating idea. Use the output as a sizing and cost-basis check, then separately ask whether the evidence still supports owning more of the security.
What this tool does not cover
The calculator ignores taxes, commissions, FX conversion costs, slippage, bid-ask spreads, and local rules that can change the after-tax outcome. It also does not model future returns or probability. It answers one narrow question: what happens to the average cost if you buy this much at this price?
FAQ
Is dollar-cost averaging the same as averaging down?
Not exactly. Dollar-cost averaging usually means investing fixed amounts on a schedule. Averaging down means buying more after the price falls. Both affect average cost, but the decision quality still depends on the underlying evidence and portfolio risk.
Why is my new average cost not halfway between the two prices?
Because average cost is weighted by share count and dollars invested. If the second purchase buys fewer shares than the first, it has less impact on the blended average. Equal price distance does not mean equal position weight.
Does this include tax cost basis rules?
No. It uses simple blended-cost math for planning only. Tax lots, wash-sale rules, FX, and jurisdiction-specific reporting can produce a different tax result, so verify with your broker records or a qualified tax professional.
Evidence to read next
Use the calculator output with source-backed research, not as a standalone signal.
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