How to determine the average price of my holdings?

Discussions about Money Management and Risk Control.
oem7110
Roundtable Knight
Posts: 381
Joined: Wed Jul 12, 2006 9:33 pm

How to determine the average price of my holdings?

Does anyone have any suggestions on how to determine the average price of my holdings in following example?

I invest \$1000 for xxx funds on monthly base, and the price is shown below for 1 year. Does anyone have any suggestions?

Jan 100
Feb 95
Mar 90
Apr 85
May 80
Jun 75
Jul 70
Aug 65
Sep 60
Oct 55
Nov 50
Dec 45

Thank for any suggestions
Eric

sluggo
Roundtable Knight
Posts: 2986
Joined: Fri Jun 11, 2004 2:50 pm
Step 1: calculate the #shares purchased on each trade.

Step 2. add up the total dollars invested.

Step 3. add up the total #shares purchased.

Step 4. divide (total dollars invested) by (total #shares purchased), giving (average dollars per share).

Example:

Trade 1: \$500 invested at price = \$125.00
Trade 2: \$475 invested at price = \$25.00
Trade 3: \$700 invested at price = \$100.00

Calculations:

Trade 1 #shares = \$500 / \$125 = 4.000 shares
Trade 2 #shares = \$475 / \$25 = 19.000 shares
Trade 3 #shares = \$700 / \$100 = 7.000 shares

Total Dollars invested = \$500 + \$475 + \$700 = \$1675.00

Total #Shares = 4 + 19 + 7 = 30.000 shares

Average purchase price = (1675.00 dollars invested) / (30.000 shares) = \$55.8333 per share

oem7110
Roundtable Knight
Posts: 381
Joined: Wed Jul 12, 2006 9:33 pm

Thank you
Eric