Keeping track of individual stock investment

When investing in equity, do you know how you are performing with regard to each stock counter you owned, on an overall basis? Do you keep track of each stock purchased and sold and dividends received for the same counter? There could be rights issue and bonus issue for the counter over time. Are these tracked too?

More than ever before, I find that this information becomes important for me to decide on investment decisions on a particular counter. The share prices had been volatile. Decisions can then be made based on an informed basis, such as how many additional shares to buy and at what prices; what is the price to sell in order to minimize loss or make a profit on the counter.

Let’s take an example. Say the counter is CapitaLand.

Since the time you started investing in CapitaLand, you had bought and sold the counter before. You had also received dividends.

Capital Gain/(Loss) on sale = (Sales price + trading fees) – (Cost price + trading fees)

Gain on sale = $860
+ Loss on another sale = ($4,727)
+ Dividend received so far = $295
Net loss = $3,572

You can determine the average cost of the counter by including the loss incurred as part of total costs of your investment. The average cost calculated below is $2.953. (See below)

New

units

  Unit

Total cost

bought

price

+ fees

2000

2.61

5,249.41

2000

2.40

4,829.19

3000

2.33

7,020.31

Add: Loss incurred

3,572.10

Total

7000

2.953

20,671.01

What is not considered in the above calculation is the time value of money over time and the opportunity cost of putting your money to work other than investing in CapitaLand.

Having known the average cost of the counter, you can decide whether to sell at a price either above or below the average cost. This prevents you from selling accidentally below cost.

Copyright © 2011, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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