Cost Basis Helps Determine Performance…Incorrectly

Show Notes

Are you sure you understand the "Cost Basis" and “Gain/Loss” columns on your investment statements? Cost basis and gain/loss calculations are two commonly misunderstood investment terms. Learn what these calculations actually represent.

Jeff Harrell uses several examples to illustrate how cost basis can be misleading and breaks down this technical concept to help you get a better handle on understanding your investment performance.

What most investors want to know is: how do I determine the performance of a security I’ve invested in, or maybe even the overall performance of my accounts? Jeff provides resources that investors can use to obtain the information you are really looking for when referencing cost basis or that “gain/loss” number.

(Season 1 Episode 8)

Resources Mentioned in Episode:

  • Vanguard article, “Cost basis doesn't equal performance
  • – Type any symbol in their website's search box to find the security and then click on the tab for "Performance" (mutual funds, ETFs) or "Trailing Returns" (stocks). It will take you to a page on Morningstar’s website that shows you all relevant trailing returns and, even better, compares them to relevant benchmarks so you can evaluate the performance.

Other Episodes Referenced: 

Podcast produced by Ted Cragg of

Music Credit: Dream Cave / Adventure Awaits / courtesy of

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