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Calculate Average Cost per Share

Average Cost Formula:

\[ \text{Avg Cost} = \frac{\text{Total Invested}}{\text{Total Shares}} \]

USD
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1. What is Average Cost per Share?

The Average Cost per Share represents the mean price paid for each share in an investment portfolio. It's calculated by dividing the total amount invested by the total number of shares owned.

2. How Does the Calculator Work?

The calculator uses the simple average cost formula:

\[ \text{Avg Cost} = \frac{\text{Total Invested}}{\text{Total Shares}} \]

Where:

Explanation: This calculation gives you the effective price you've paid per share across all your purchases.

3. Importance of Average Cost Calculation

Details: Knowing your average cost helps determine your break-even point, evaluate investment performance, and make informed decisions about when to buy more or sell shares.

4. Using the Calculator

Tips: Enter your total invested amount in USD and total number of shares owned. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is this different from cost basis?
A: Average cost is one method of calculating cost basis. Other methods include FIFO (First-In-First-Out) and specific identification.

Q2: Should I include fees in total invested?
A: Yes, for accurate calculations you should include all commissions and fees paid to acquire the shares.

Q3: How does dollar-cost averaging affect this?
A: Dollar-cost averaging typically results in an average cost that's between your highest and lowest purchase prices.

Q4: What if I've sold some shares?
A: This calculator assumes you're calculating for current holdings. For accurate tracking, you may need to adjust for shares sold.

Q5: How precise should the calculation be?
A: For stocks, typically 2-4 decimal places. For mutual funds, 4 decimal places is standard.

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