Average cost

[jcasey]

When I sell some of my mutual funds at a profit shouldn't the average cost go down. In one of my funds when I sold 108 out of 563 shares for $46, my average cost went from 8.88 to 9.05. In similar transactions with this fund sometimes my average cost goes up and sometimes down. The average cost of other funds and stocks go down as expected when I sell at a profit. Am I doing something wrong? Thanks for your help

[Mark]

Hi jcasey,

Where are you viewing this "average cost"? Is it in some report, or are you looking at the plotted OOP cost on a graph?

If you are looking at the average cost of your remaining shares then the cost of those remaining shares determines the cost basis, not whether or not you sold prior shares at a gain or loss.

Maybe what you are looking for is what is referred to as historical OOP cost in Fund Manager. With historical OOP cost the overall cost since inception is calculated. This is your overall break even point over the full history of this investment. It is the sum of all money put in, minus all money taken out over the full history of the investment. In some cases it can go negative if you take out more than you ever put in.

If you are looking at your OOP cost on a graph, you can plot either "Current" or "Historical" cost. The "Current" OOP cost is the cost of only the currently owned shares, any previously sold shares are not included in the calculation. To control which type of cost is plotted, see "Graphs / Options / Historical Cost".

Reports also have the ability to report on either historical or current OOP cost.

[jcasey]

Thank you very much. Your answer is concise and fully informative. I did not know about that option (though I should have after using FM for many years)