1. What Is Average Share Purchase Price?

The Average Share Purchase Price represents the mean cost per share across all purchases in your investment portfolio. It helps investors track their cost basis and evaluate investment performance over time.

2. How Does The Calculator Work?

The calculator uses the simple average price formula:

Where:

• \( \text{Total Invested} \) — Sum of all money invested in the stock ($)
• \( \text{Total Shares} \) — Total number of shares purchased (count)

Explanation: This calculation gives you the weighted average cost per share, accounting for all purchases at different price points.

3. Importance Of Average Cost Calculation

Details: Knowing your average purchase price is essential for determining profit/loss, making informed selling decisions, and implementing dollar-cost averaging strategies effectively.

4. Using The Calculator

Tips: Enter total amount invested in dollars and total number of shares purchased. Both values must be positive numbers greater than zero for accurate calculation.

5. Frequently Asked Questions (FAQ)

Q1: Why Calculate Average Share Price?
A: It helps investors understand their true cost basis, track investment performance, and make informed decisions about when to buy more shares or sell existing holdings.

Q2: How Does Dollar-Cost Averaging Affect This?
A: Dollar-cost averaging naturally creates an average purchase price over time, smoothing out market volatility and reducing the impact of buying at peak prices.

Q3: Should I Include Fees In Total Invested?
A: Yes, for accurate cost basis calculation, include all transaction fees, commissions, and other costs associated with purchasing the shares.

Q4: What If I Purchased At Different Prices?
A: This calculator automatically weights each purchase by the amount invested, giving you the true average cost across all transactions.

Q5: How Often Should I Recalculate?
A: Recalculate after each new purchase to maintain an up-to-date understanding of your average cost position.