Should I include commissions in my avg. cost when tracking my portfolio?
Alright, hear me out.
When I log my positions into my portfolio tracking app, I’m trying to decide whether to include the commissions I paid as part of the average cost or not.
Here's my dilemma:
**Scenario 1 (Commission excluded from cost basis):**
* I buy a stock for $100
* I pay a $10 commission
* Stock rises to $1,000
* My real return is: (1,000$ current value - 100$ cost basis - 10$ commission) / 100$ = **890%**
**Scenario 2 (Commission included in cost basis):**
* Same numbers, but I treat my cost basis as $110
* My return becomes: 1,000$ / 110$ - 1 = **\~809%**
Now technically I only spent $110 out of pocket, so including the commission makes sense if I'm calculating *real dollars*.
But percentage-wise, it feels like it **messes up my true return**, because the $10 commission isn’t actually invested - it’s just a sunk cost.
So, to those of you who actually track your portfolio properly, **do you bake in commissions into your average price or not, and why?**
Let me know how you think about it - especially in the long run where that $10 becomes irrelevant on a 10x bagger for example.