Non reinvested Capital Gains

What you've done is have the distributions paid in cash, then invested the cash in a MMF.

It should be as simple as entering two transactions: one for the distribution and one for the MMF purchase.

There's no reason Quicken won't properly keep track of your portfolio given these transactions.

Thanks Fred.

That part I got and both transactions were recorded correctly when I downloaded them. My question though is this: The price of the fund drops, ie, from 110 to 100. Normally, if you reinvested the gain, you add back the shares purchased at the lower price and all is well in the % Gain/Loss column.

If you don't reinvest the gains and the sum goes to the MMF, then the %Gain/Loss for the mutual fund looks like you took a large loss, which of course I didn't since I actually have the money in the MMF. How do I correct the mutual fund?

I hope I am asking that in a coherent way.

Thanks

Hi, ctrx.

First, what is "a MMF"? I assume you mean a Money Market Fund. Many stockbrokers "sweep" dividends and sale proceeds into a money market fund for their stockholder clients. I think you mean that you hold mutual fund shares in your brokerage account, and that you've elected to receive dividends on the fund shares in cash, rather than reinvest them in that fund.

If that's what's happening, then I agree with Fred. Just record what's really happening in "the real world": You're getting a cash dividend from the mutual fund and NOT reinvesting it in the same fund. Your second transaction reinvests the cash in a different fund. Your return from the mutual fund doesn't depend on what you do with the cash after you get it. Whether you use the cash to have a party, or to buy groceries, or to buy shares in General Motors - or to buy shares in a money market fund - your return from the mutual fund had already been computed when you got the cash.

If you reinvest in the same fund, then you calculate ROI one way. If you remove cash flow from that fund and invest it somewhere else (or spend it), then you must recognize the cash withdrawals (including their timing) in addition to the ending value of the fund.

Or you can combine the TWO funds and compute the ROI on the combination.

RC

Your problem must be that you haven't associated the dividend as coming from your mutual fund. When you post the dividend, you need to enter the Security Name so Quicken will know which security paid the dividend. Then it should calculate ROI properly.

Thanks so much for that explanation RC.

ctrx