Average Cost Formula:
From: | To: |
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.
The calculator uses the simple average cost formula:
Where:
Explanation: This calculation gives you the effective price you've paid per share across all your purchases.
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.
Tips: Enter your total invested amount in USD and total number of shares owned. Both values must be positive numbers.
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.