when you buy more shares of stock added to the current ones you own,?

Question

and if the stock price goes down for the current shares you just bought, does that mean you lose money? Or do the current shares simply mean you add on to the ones you already own and that's the summation? How do you look at new stock purchases?

Answer 1

First off, you never lose or gain money until you actually sell - so you haven't lost anything. You just need to figure out what your cost basis is with the new shares to determine if you will lose or gain when you sell.

For instance, let's assume you buy 100 shares for $10. Then you purchase an additional 100 shares at $12. The total money out of your pocket (excluding commissions) is (100 x 10) + (100 x 12) = $1000 + $1200 = $2200. Your cost basis for the stock is now $11 ($2200/200 shares). So you won't be "losing" until the price of the stock dips below $11.

Now, that's the simplified version - of course for tax purposes you can designate which shares you sell in order to determine gain or loss and whether it is short or long term....

If the stock is at $11 and you sell the "lot" (100 shares) that you purchased at 10 - $1/share gain. Sell the "lot" you purchased at $12 - $1/share loss. If you sell it all - you have neither a gain nor a loss (again, commissions aside).

Answer 2

First of all, you don't gain or lose money as the stock price changes. You only gain or lose when you sell or if the company goes out of business. Let's say you had 10 shares of stock at $1 per share and you bought 10 more shares at $2 per share. You now have 20 shares of stock. If you sell all 20 shares at $1.50, you make $0.50 on the shares you bought at $1 and you lose $0.50 on the shares you bought at $2.

In all seriousness, the fact that you had to ask this question means that you are nowhere near ready to buy stock. You have a LOT of research to do before you should even think about buying stock.

Answer 3

the value is the current value. if you bought them for say 20 a share originally and now they're 10, they're worth 10. be more concerned with the price if and when you decide to sell.

Answer 4

i think of you have have been given a brilliant theory to evaluate shares like that and comparing it to the yield on the ten 3 hundred and sixty 5 days bond. comparing with the help of numbers enables take the emotion out of the alternative making. i like to study the money bypass to the fairness.

Answer 5

in my opinion you cant add on stock to stock you have already purchased, you dont lose or gain money until you sell your stock