Hi PDAH,
Right you are!
The average cost of shares, as others have also mentioned, is not really important, and can even be a negative value, depending on the definition that is used.
In this respect(I forgot in which post) I have made the suggestion that a Share Cost Index(SCI) can effectively be used to indicate the efficiency of a portfolio:
SCI > 0: No net profit has as yet accumulated;
SCI = 0: Investment has yielded its total initial investment;
SCI < 0: Investment has accumulated a net profit.
So, just like the Dow Index has no intrinsic importance, an index can be effective after it is adopted by a group of users.
An interesting result of the Time Weighted Annual Yield of an Investment using the average Investment, as calculated by the Internal Rate of Return(IRR), is that the yield can become negative as well, and this requires an extra interpretation: most people would interpret a negative yield as a loss while in fact the negative value in this case arises from the negative investment, as given by the IRR Function. I would suggest that the IRR Method for Annual Yield of an investment may not be as useful as it would in a first consideration appear: as time progresses the yield will rise unboundedly and then after crossing the SCI=0 it will be negative and drop towards zero as a limit as the profit grows larger. Few people would not appreciate this type of Yield Definition for an investment.
Multiplicity of meanings in Finance or Engineering arises from well-intentioned but superficial use of derived numbers: unless the specific definition of the derived number is given or standardized numerous misunderstandings can develop.
A typical definition that is not standardized is moisture content of a substance: does one mean the mass of moisture in the wet mass or the dry mass? Or does one mean the volume of water in oil? Or the volume or the mass of water in air?
There are many examples in engineering projects or science discussion in which misinterpretations on derived numbers have been identified only after it was too late. In the least worrisome cases mistakes on this level are costly. In the worst of cases it can cause serious or even fatal accidents.
Be aware!
Conrad
Market Data 
Markets 
AI
