The “average cost” of shares is a way to report what you have bought and sold a security for, where multiple transactions are involved. Your average cost basis can help you calculate whether or not your investment gained or lost value.
If you purchase securities for the first time in your SelfWealth account (i.e. do not transfer them in) the average price will automatically be updated, until you sell a parcel.
Why does SelfWealth show my average cost as ‘$0’?
If you have transferred shares into SelfWealth from another broker, you will need to enter the average price against your initial transfer of shares into your SelfWealth portfolio, as we do not receive this information from your old Broker. As you proceed to purchase additional holdings in the same security the average price will automatically be updated, until you sell all or part of your shareholding.
How do I calculate the average cost price?
An investor purchases three separate parcels of the same security on different days and at a different price.
- Calculate the total number of shares held = 300
- Add together the purchase value for each parcel of shares = $17,750.00
- Average cost price = Total Purchase / number of units = $59.17
How to update the average price on SelfWealth when you sell
Once you have sold a parcel of shares, the average price will not be adjusted as the system cannot determine which parcel of shares you have sold and therefore are unable to calculate the new average price.
If we use the current example of holdings below, each parcel of shares has a different unit price. If you were to sell 75 units, the system cannot elect which parcels of units have been sold and therefore are unable to automatically calculate the new average price.
How do I update the average price on SelfWealth?
To update the average price of your holding’s login to your account > Click on My Portfolio > click on the icon with 3 horizontal lines > select the Edit option.