Why is my fund balance lower than my cost basis?

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TravisA
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Joined: Wed Jan 16, 2019 10:43 am

Why is my fund balance lower than my cost basis?

Post by TravisA »

I purchased shares of Fidelity's S&P 500 Index fund (FXAIX) between May 2014 and December 2016 for an average price between $70 and $80. Today's share price is $90.76. Why is my current cost basis for this fund higher than the account balance?

Thank you!
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David Jay
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Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Why is my fund balance lower than my cost basis?

Post by David Jay »

Hi Travis, welcome to the forum.
TravisA wrote: Wed Jan 16, 2019 10:51 am I purchased shares of Fidelity's S&P 500 Index fund (FXAIX) between May 2014 and December 2016 for an average price between $70 and $80. Today's share price is $90.76. Why is my current cost basis for this fund higher than the account balance?

Thank you!
If you purchased a mutual fund share for $80 four years ago and the fund was paying out $3.00 a year in unqualified dividends then the cost basis would be $92.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
Helping hand
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Joined: Wed Jan 16, 2019 10:24 pm

Re: Why is my fund balance lower than my cost basis?

Post by Helping hand »

Likely the capital gain payments a long with your dividend payments, assuming you are reinvesting and adjusted
your cost basis up.

Not ideal, but if the cap gains are long term, there is slightly less of tax impact than short term gains. Either way, you are paying additional taxes along the way because of the cap gain distributions, vs just paying taxes on dividends which have to be distributed by law. just paying taxes on your capital gains when you sell the investment.

Of course, none of that matters if it’s in a tax deferred account and then it is just the optics of having a loss when that really isn’t likely the case.

For that fund:
Dividend History
Date Per Share Amount Reinvestment Price
12/14/18 $0.503 $90.38
10/05/18 $0.45115 $100.86
7/06/18 $0.44901 $96.44
4/06/18 $0.40365 $90.99
Distribution Schedule: April, July, October, December

Capital Gains History
Date Per Share Amount Reinvestment Price
12/28/18 $0.106 $86.36
12/14/18 $0.372 $90.38
4/06/18 $0.087 $90.99
12/15/17 $0.022 $93.47
Distribution Schedule: April, December
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PhysicianOnFIRE
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Location: Up North

Re: Why is my fund balance lower than my cost basis?

Post by PhysicianOnFIRE »

TravisA wrote: Wed Jan 16, 2019 10:51 am I purchased shares of Fidelity's S&P 500 Index fund (FXAIX) between May 2014 and December 2016 for an average price between $70 and $80. Today's share price is $90.76. Why is my current cost basis for this fund higher than the account balance?

Thank you!
Set your cost basis to show individual lots. Your cost basis in the lots purchased several years ago should be lower than the current value.
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Phineas J. Whoopee
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Joined: Sun Dec 18, 2011 6:18 pm

Re: Why is my fund balance lower than my cost basis?

Post by Phineas J. Whoopee »

David is right. Reinvested distributions add to your cost basis just as if you had invested new money from any other source. That's all there is to it.
PJW
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