It's worth weighing before you lock shares into
the average cost method.
Once you choose
the average cost method, the rest of the shares in that fund must use it too.
The average cost method is one method allowed by the IRS when you sell mutual fund shares.
For tax purposes, you can use specific identification for all types of investments except noncovered shares (which use
the average cost method).
The average cost method is only available for mutual fund shares.
Once you use sell shares of a mutual fund using
the average cost method, any existing shares are locked into that method too.
If, however, you accumulated your shares through several separate purchases, you have some math in your future, in the form of
the average cost method.