Looking to cut down on number of transactions

- G
- Gary
  
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posted
13 years ago

Tue, Oct 5, 2010 8:50 AM

I recently bought a group of stocks at Vanguard, mainly for dividend income. As dividends started to come in, I noticed that each dividend produced 4 transactions:

In my brokerage account:

- Div, the dividend itself

- Xout, tranferring the cash from the dividend to my investment account

In my investment account:

- Xin, transferring the cash in to my investment account

- Bought, buying money market shares with the new cash.

I've been replacing the two transactions in my brokerage account to a single DivX transaction (although it would be nice to be able to do this automatically). Is there any way I can consolidate the two investment account transactions into one? And, if so, can it be done more automatically?

I'm also curious about others' opinions as to whether this is a fool's venture: whether I should continue to pursue this cutting down on the number of transactions, or just accept the transactions as received from the vendor.

- Z
- Zaidy036
  
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posted
13 years ago

Tue, Oct 5, 2010 2:08 PM

Q reports do not include ReinvDiv (no transfer involved) in the total reported Div so comparing to 1099 at end of year not possible. Therefoe I manually change Vanguard's ReinvDiv that I receive for a High Yield Fund to DivX and BouhtX so end of year reports can be checked.

You should have only a DivX and BoughtX in the Investing Account and matching entries in the linked Cash Account which are auto entered by using the "X".

- R
- R. C. White
  
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posted
13 years ago

Tue, Oct 5, 2010 2:25 PM

?Hi, Gary.

It's EASY to combine multiple transactions. It's HARD to "comb out" a tangled mess of transactions after they have been combined. :>(

Unless disk space is a big problem (and it rarely is, with today's humongous HDDs), leave in as much detail as you can, including the "audit trail" of where the money came from and where it went.

Even in a mutual fund, for example, when we typically receive dividends in the form of additional shares, there are at least two transactions. First, the fund pays a dividend in dollars, and then those dollars are used to buy shares. In this case, with all the cash and shares held in a single fund, it is easier to use a single ReinvDiv transaction, rather than a _Div and a Buy. But we must remember that there actually were two transactions.

While I haven't had your exact situation, it seems to me that your single-DivX idea is a good one. The other side might not be as straightforward. But Quicken 2010 does provide the equivalent of the former BuyX transaction; the Buy - Shares Bought screen offers a "From ___" box to show the source of the funds to buy the shares if not "From this account's cash balance". I haven't used it, but I expect it would work well.

But if the cash is invested in shares of a money market fund at a constant $1 per share, you might not need to record that purchase at all. Different brokers handle these shares in different ways. In my ML CMA account, I simply show them as a part of my "cash" balance and don't bother to record purchases and sales of such shares. In another broker account, I had to record the purchases to match the holdings on my statements.

RC