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Posted by Dr. Marou on February 5, 2007, 11:21 am
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Folks,
I am new to Quicken 2007, and even newer to this newsgroup that I just found. I
am in need of advice as to how to handle an investment.
I have an investment (lets call it "oddball" for this posting) whereby I
contribute money, and the money manager buys shares in hundreds of companies for
me, based on the profile I have established. Unlike a mutual fund, I actually
own all the shares of each of the hundreds of companies in my porfolio, and that
is the way oddball presents it's monthly statement. Each monthly statement
shows the previous months's value of each company, this months value, how many
shares I own of each. It also shows all sells, and buys and additional money I
contributed, as well as the monthly distribution I take, dividends, interest and
any management expenses.
You can imagine that it would take several hours to enter all of this itemized
data each month so that I can know what growth or loss I obtained.
I actually do not care to know the details of each of the hundreds of companies
in my portfolio, only how the total oddball is doing. They do not have site
download transactions at this time....
What I want to do, is to enter as little data as possible, so that Quicken can
show me the monthly performance for the total investment without me having to
enter hundreds of monthly transactions.
I attempted to create one single "fake company" and establish a value for it,
that value being the amount of money I originally contributed to oddball. I set
the value to be one dollar for each share. Example, if I originally sent
oddball 100 dollars, Quicken showed 100 shares of "fake company" each at one
dollar a share.
The problem I run into is in handling all the many monthly transactions, at a
high level. If for example I received for a given month a total of $10 in
dividends, I would show "fake company" providing $10 dollars of dividends to
cash. Then I would buy 10 dollars of fake company with that cash balance. (I
know I could do reinvest dividends). If there was a management expense for a
given month say of $5, I would sell 5 shares of fake company and put that
procedes in the management expense catagory, and decrease the number of shares
of oddball by five.
I am wondering if any of you would be able to come up a better approach to this
tedious method I came up with. I do not think my method provides the information
I am looking for.
Thanks,
Doc
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Posted by TomYoung on February 5, 2007, 2:22 pm
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> Folks,
> I am new to Quicken 2007, and even newer to this newsgroup that I just found.
I am in need of advice as to how to handle an investment.
>
> I have an investment (lets call it "oddball" for this posting) whereby I
contribute money, and the money manager buys shares in hundreds of companies for
me, based on the profile I have established. Unlike a mutual fund, I actually
own all the shares of each of the hundreds of companies in my porfolio, and that
is the way oddball presents it's monthly statement. Each monthly statement
shows the previous months's value of each company, this months value, how many
shares I own of each. It also shows all sells, and buys and additional money I
contributed, as well as the monthly distribution I take, dividends, interest and
any management expenses.
>
> You can imagine that it would take several hours to enter all of this itemized
data each month so that I can know what growth or loss I obtained.
> I actually do not care to know the details of each of the hundreds of
companies in my portfolio, only how the total oddball is doing. They do not
have site download transactions at this time....
>
> What I want to do, is to enter as little data as possible, so that Quicken can
show me the monthly performance for the total investment without me having to
enter hundreds of monthly transactions.
>
> I attempted to create one single "fake company" and establish a value for it,
that value being the amount of money I originally contributed to oddball. I set
the value to be one dollar for each share. Example, if I originally sent
oddball 100 dollars, Quicken showed 100 shares of "fake company" each at one
dollar a share.
>
> The problem I run into is in handling all the many monthly transactions, at a
high level. If for example I received for a given month a total of $10 in
dividends, I would show "fake company" providing $10 dollars of dividends to
cash. Then I would buy 10 dollars of fake company with that cash balance. (I
know I could do reinvest dividends). If there was a management expense for a
given month say of $5, I would sell 5 shares of fake company and put that
procedes in the management expense catagory, and decrease the number of shares
of oddball by five.
>
> I am wondering if any of you would be able to come up a better approach to
this tedious method I came up with. I do not think my method provides the
information I am looking for.
>
> Thanks,
>
> Doc
> Folks,
> I am new to Quicken 2007, and even newer to this newsgroup that I just found.
I am in need of advice as to how to handle an investment.
>
> I have an investment (lets call it "oddball" for this posting) whereby I
contribute money, and the money manager buys shares in hundreds of companies for
me, based on the profile I have established. Unlike a mutual fund, I actually
own all the shares of each of the hundreds of companies in my porfolio, and that
is the way oddball presents it's monthly statement. Each monthly statement
shows the previous months's value of each company, this months value, how many
shares I own of each. It also shows all sells, and buys and additional money I
contributed, as well as the monthly distribution I take, dividends, interest and
any management expenses.
>
> You can imagine that it would take several hours to enter all of this itemized
data each month so that I can know what growth or loss I obtained.
> I actually do not care to know the details of each of the hundreds of
companies in my portfolio, only how the total oddball is doing. They do not
have site download transactions at this time....
>
> What I want to do, is to enter as little data as possible, so that Quicken can
show me the monthly performance for the total investment without me having to
enter hundreds of monthly transactions.
>
> I attempted to create one single "fake company" and establish a value for it,
that value being the amount of money I originally contributed to oddball. I set
the value to be one dollar for each share. Example, if I originally sent
oddball 100 dollars, Quicken showed 100 shares of "fake company" each at one
dollar a share.
>
> The problem I run into is in handling all the many monthly transactions, at a
high level. If for example I received for a given month a total of $10 in
dividends, I would show "fake company" providing $10 dollars of dividends to
cash. Then I would buy 10 dollars of fake company with that cash balance. (I
know I could do reinvest dividends). If there was a management expense for a
given month say of $5, I would sell 5 shares of fake company and put that
procedes in the management expense catagory, and decrease the number of shares
of oddball by five.
>
> I am wondering if any of you would be able to come up a better approach to
this tedious method I came up with. I do not think my method provides the
information I am looking for.
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Posted by TomYoung on February 5, 2007, 11:39 pm
Please log in for more thread options > Folks,
> I am new to Quicken 2007, and even newer to this newsgroup that I just found.
I am in need of advice as to how to handle an investment.
>
> I have an investment (lets call it "oddball" for this posting) whereby I
contribute money, and the money manager buys shares in hundreds of companies for
me, based on the profile I have established. Unlike a mutual fund, I actually
own all the shares of each of the hundreds of companies in my porfolio, and that
is the way oddball presents it's monthly statement. Each monthly statement
shows the previous months's value of each company, this months value, how many
shares I own of each. It also shows all sells, and buys and additional money I
contributed, as well as the monthly distribution I take, dividends, interest and
any management expenses.
>
> You can imagine that it would take several hours to enter all of this itemized
data each month so that I can know what growth or loss I obtained.
> I actually do not care to know the details of each of the hundreds of
companies in my portfolio, only how the total oddball is doing. They do not
have site download transactions at this time....
>
> What I want to do, is to enter as little data as possible, so that Quicken can
show me the monthly performance for the total investment without me having to
enter hundreds of monthly transactions.
>
> I attempted to create one single "fake company" and establish a value for it,
that value being the amount of money I originally contributed to oddball. I set
the value to be one dollar for each share. Example, if I originally sent
oddball 100 dollars, Quicken showed 100 shares of "fake company" each at one
dollar a share.
>
> The problem I run into is in handling all the many monthly transactions, at a
high level. If for example I received for a given month a total of $10 in
dividends, I would show "fake company" providing $10 dollars of dividends to
cash. Then I would buy 10 dollars of fake company with that cash balance. (I
know I could do reinvest dividends). If there was a management expense for a
given month say of $5, I would sell 5 shares of fake company and put that
procedes in the management expense catagory, and decrease the number of shares
of oddball by five.
>
> I am wondering if any of you would be able to come up a better approach to
this tedious method I came up with. I do not think my method provides the
information I am looking for.
Well, that was strange! My reply consisted of an entire quote of your
original post, but didn't include my response!
I'll try again.
>From a mechanical standpoint, the Internal Rate of Return (IRR) of an
investment for a period is only dependent on the following variables:
balance at beginning of the period, date and amount of money YOU add
to the investment, date and amount of money YOU take out of the
investment, and the balance at the end of the period.
As you can see, all the internal machinations like dividends that stay
within the account, the money manager's fee and so forth don't enter
into the equation because they don't reflect inflows and outflows of
cash FROM YOU or TO YOU. From an non-mechanical standpoint, the money
that flows into the account that doesn't come from you (e.g.,
dividends) and money that flows out of the account to someone else
(e.g., money manager fee) DOES affect your return, but there's no need
to enter these sort of transaction. Instead, these sort of
transactions can simply be reflected in the ending balance of the
investment.
For example: Let's say the you make an investment on the first day of
year XXXX of $1,000. (So, the opening balance is $0.) During the
year the money manager takes $100 out of the account for his effort
and at the end of the year the balance in the account is $1,050. The
account has netted you 5% for the year.
If you'd deposited the same $1,000 in a CD with a one-year maturity at
5% the balance of the CD at the end of the year would be $1,050, or
5%. Same as the "managed" account. You can ignore cash flows that
don't come out of your pocket or go into your pocket.
So, if the only thing you want to do is track the IRR of oddball, you
only need record money you add to the account, money you take from the
account, and then make an adjustment to the quote of "fake company" (1
share with an original per-share cost of the amount of money you
initially put into the account) such that the market value of fake
company +/- net cash represents the total value in the account.
It'd probably be just as easy to do this in a spreadsheet.
Tom Young
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