What’s The Difference Between Cost Basis And Performance?

We report both cost basis and investment performance on your quarterly statements, and get many questions about the difference between the two. Here’s a quick summary:

Cost basis is an accounting and tax measure, which tells you how much tax you owe when you sell an investment. Your cost basis climbs each time you reinvest dividends and capital gains distributions so what you see on your statement does not measure the actual returns you receive over time from an investment.

Portfolio and investment performance is a separate measure we compute quarterly. It expresses the percentage return you receive from your investments, and it factors in dividends, capital gains, and money you added to or took out of your portfolio.

See also our article on: Understanding Your Quarterly Portfolio Performance: “Actual” vs. “Annual”

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!


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