What does averaging mean?
Averaging is the process of calculating an arithmetic mean or of causing values to settle at an intermediate level. As a verb form, it describes both the mathematical act — adding figures together and dividing by their count — and the broader idea of things 'averaging out', where extremes offset each other over time. It is ubiquitous across registers: students averaging grades, economists averaging inflation data, and athletes whose statistics are reported as season-long averages. In finance, averaging has a specialized meaning: investors who buy shares at successive prices are said to be averaging into a position, and 'averaging down' refers specifically to buying more as prices fall in order to lower the average cost per share. The word carries no strong emotional charge, though in investing contexts it can suggest persistence or, less flatteringly, stubbornness in the face of losses. Derived from the older noun 'average' — itself a borrowing through Mediterranean trade languages ultimately tied to the Arabic term for damaged merchandise shared among shippers — averaging reflects how a commercial concept of fairly distributed loss evolved into one of modern statistics' most fundamental operations.
The action or process of calculating an arithmetic mean; also, the practice in investing of purchasing an asset in increments at different prices.
"Dollar-cost averaging reduces the risk of buying everything at a market peak."
In finance, 'dollar-cost averaging' is the standard fixed phrase.
Present participle of 'average': to compute the mean of a set of numbers, to even out over time, or to attain an average amount.
"The team is averaging thirty points a game this season."
'Average' comes from the Arabic word for damaged cargo — merchants splitting losses on spoiled shiploads gave us the everyday word we now use for test scores.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of averaging
The word derives from 'average', which entered English around the early sixteenth century from Middle French avarie, a term for duties or losses on shipped goods. That French form traces back through Italian avaria to the Arabic ʿawāriyya, meaning damaged merchandise, whose costs were divided among the merchants involved — an early literal instance of averaging. The verbal and participial uses developed as the statistical sense of the mean became dominant from the eighteenth century onward.
Related word forms
How averaging is actually used
Neutral register, common in mathematics, statistics, finance, journalism, and sports reporting. In financial contexts, 'averaging down' implies buying as a price falls and can carry a cautionary connotation about doubling down on losing positions.