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Posted by John on December 18, 2007, 9:59 am
Please log in for more thread options I do have to say that at first blush this is a bit confusing.
I assume the report your are unhappy with is the "Portfolio" tab on the
"Investing Center". Although you can choose what columns of information to
display on this report you probably have at least columns labled: "Name",
"Quote/Price", "Shares", "Market Value", "Cost Basis", "Gain/Loss",
"Gain/Loss %".
I tried your example exactly and I see that on 12/14/2007 the "Gain/Loss"
column shows 0.00 and the "Gain/Loss %" column shows 0.00. Why doesn't it
show 10% like you would expect?
The "Gain/Loss" columns are really talking about something called "Capital
Gain". You will also see that the market value is $5500 which accurately
reflects the value of your holdings. You will also see that the "Cost
Basis" is $5500. The "Capital Gain" is the difference between the market
value and the cost basis which, in this case, is zero!
What you want to see is how much has your investment grown this year and you
are not, apparently, interested in capital gain.
Modify the report to display "ROI %" (Return On Investment) which will show
you the 10% you are looking for. To do that, press the "Customize View"
button which will give you a window that will allow you to select which
columns are displayed on the report. In the "Available Columns" sub-window,
use the slide bar to find "ROI %". Select that and prless the "Add>>"
button. You will see that "ROI %" now shows up on the "Displayed Columns"
sub-window at the bottom of the list. Press the OK button. Now look at
your report. You will see a column labled "ROI %" and it will display the
10% your are looking for.
> Hi R.C.,
> All that I'm asking about is tracking performance, not taxes and not
> accounting principals. It doesn't matter if the dividend is reinvested or
> paid in cash. I just want to see what the "true" performance for my
> particular holding period.
>
> It's possible for a fund to advertise that it's up 67% YTD but with poor
> timing an unlucky investor could actually be sitting with a 20% loss.
> Quicken's "reinvest dividend" feature masks the true picture.
>
> To solve this shortcoming I set up a parallel "dummy account" and put the
> reinvested shares into the dummy account with a zero cost. The new
> average cost basis and new total shares from the dummy account serves as
> data for my Yahoo portfolio. It's convoluted but the fudged Yahoo
> portfolio displays a crystal clear picture of what I'm really earning from
> each fund. Too bad Quicken doesn't have a method to do this automatically.
>
>
>
> R. C. White wrote:
>> Hi, Sara.
>>
>> Suppose you had taken your $500 dividend and bought a new HDTV with it,
>> instead of reinvesting it? Your share value would now be $50 and you
>> would still have 100 shares and your investment would still be worth
>> $5,000. Would you say that your return had been zero?
>>
>> It reminds me of my years in public accounting, dealing with both
>> wage-earners and business owners. When the wage-earner looked at his W-2
>> and saw that he had earned $50,000, he asked, "Where did it all go?" But
>> when the business owner saw on the income statement that he had made
>> $50,000, he said, "Where is it? Show it to me!"
>>
>> Your fund produced a return on your initial investment for the period to
>> 12/14/07, which you invested in more stock. By year-end, it may also
>> produce a return on your recent new investment.
>>
>> How would you calculate your return on THIS investment if you had used
>> that $500 dividend to buy a DIFFERENT mutual fund?
>>
>> RC
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