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Calculators / Drawdown planner
Drawdown & Buying Planner
Plan how to buy in chunks as a price falls or rises, and see your break-even.
1. Your plan
How do you want to build the position?
How deep could the fall go?
Your style
2. Price vs your average
Each purchase pulls your average price down, but it stays above the market price while it falls.
- Price at each step
- Your average price
- Starting price
- x: fall from today's price
3. Your buying steps
Change the level or the chunk. Chunks always add up to 100%.
- Step 1At price
$100
Invest$900
avg $100
- Step 2At price
$90.00
Invest$1,300
avg $93.84
- Step 3At price
$80.00
Invest$1,600
avg $87.47
- Step 4At price
$70.00
Invest$1,800
avg $80.97
- Step 5At price
$60.00
Invest$2,100
avg $73.93
- Step 6At price
$50.00
Invest$2,300
avg $66.60
4. What if it goes like this?
Later steps are not bought.
Invested
$10,000
All deployed
Your average price
$66.60
Break-even price
$66.60
+33.2% from step 6
Profit / loss
+$5,016
+50.2% on $10,000
Recovery needed to break even
If the price falls 50%, buying at all your steps needs a 33.2% rise to break even. Investing everything today would need 100.0%. If it then moves to $100, you gain 50.2%.
For education only, not investment advice. Calculated in your browser; nothing you enter is saved or sent anywhere. Real returns vary.
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How it works
Buying in chunks
Instead of investing everything at once, you split your money into chunks and buy at set price levels. When buying on the way down, each chunk lowers your average price, so you need a smaller recovery to break even. When buying on the way up, you add to a position only as it proves itself.
Break-even and profit
Average price is total money invested divided by total units bought. Break-even is the average price. The recovery needed from the lowest level is average price divided by that level's price, minus one. Profit is current value minus money invested.
Scenarios and risk profiles
A normal correction is a 10 to 20 percent fall, a recession often 30 to 50 percent, and a deep crash can exceed 50 percent. Careful investors default to smaller first chunks and keep more for deeper falls; bold investors deploy earlier. Every level and chunk can be changed.
Worked examples
Buying as it falls
You plan to deploy 10,000 on an asset priced at 100: 40% now at 100, 30% after a 20% fall at 80, 30% after a 40% fall at 60. Your average price is 78.43. If it drops to 60 it only needs to rise 30.7% to break even, while buying everything at 100 would need a 66.7% rise.
If it recovers
In that plan, if the price returns to 100 you hold 127.5 units worth 12,750: a profit of 2,750 (+27.5%). A single buy at 100 would show 0%.
Why falls hurt more than they look
A 50% fall needs a 100% gain to recover, and a 20% fall needs 25%. This is why many investors buy in steps rather than all at once.
Tips for using it well
- Only average down on assets you would still want to own at the lower price, such as diversified index funds.
- Keep chunks you cannot afford to deploy out of the plan; unused steps stay as cash.
- Averaging down a single weak company can mean throwing good money after bad.
- Set levels in advance, so a fall triggers a plan instead of a panic.
Frequently asked questions
What is averaging down?
Averaging down means buying more of an asset after its price falls, which lowers your average cost. It only makes sense for assets you believe will recover, and you should never put in more than you can afford to lose.
How do I calculate break-even after buying in chunks?
Divide the total amount invested by the total units bought to get your average price. The price must return to that average for you to break even.
How much does a stock need to rise to recover a loss?
The gain needed is 1 divided by (1 minus the loss) minus 1. A 20% loss needs a 25% gain, 33% needs 50%, and 50% needs 100%.
At what percentage drops should I buy the dip?
There is no single right answer. A common plan uses steps of 10 to 20% in a normal correction, and 10 to 50% in a recession. The planner suggests levels for each scenario and lets you change them.
What if the price never recovers?
Averaging down does not protect against an asset that keeps falling or never recovers. Individual stocks can fall permanently; diversified index funds have historically recovered, but the timing is uncertain.
Why must chunk percentages total 100%?
The chunks are shares of the money you plan to deploy, so they always add up to all of it. When you change one, the others adjust automatically.
Does the planner save my data?
No. Everything is calculated in your browser and nothing is stored.
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