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As a side note, you may be looking at the dates of purchase and the prices paid, and start thinking that the stock never traded at those prices on that particular day. The price paid reflects the purchase price of the stock plus commissions paid. For example: (((stock price per share x quantity) + commission)/quantity). Let’s say I bought 10 shares of Microsoft at $20 a share and paid $50 total in commissions. My price paid per share that I would display would be ((($20 x 10) + 50)/10) = $25/share even though the stock was trading at $20/share when I bought it. This example also shows how profits can be eaten up by commissions, especially when you don’t trade at high volumes. Now imagine that we use that same example, except we trade 100 shares instead, and the commission remains the same. Our average purchase price would be: ((($20 x 100) + 50)/100) = $20.50/share. So by buying 100 shares instead of 10 shares, we save $4.50 per share!

*FFFFX is a mutual fund. I have been making regular contributions to this fund. The purchase date is when I first contributed to this fund. The purchase price is the weighted average of all contributions, including dividend reinvestments.

This page was last updated 11/25/2008.