Recently, I did a heck of a lot of trading in my sister's taxable account, so I thought that it might advantageous to get software that would determine whether it would be better to use actual cost or average cost to compute capital gains. I've been disappointed that most, if not all, of the programs suffer from the deficiencies described below. I'd be reluctant to trust their calculations. Are there portfolio management programs that do not suffer from the problems described below? The comments are about FundManger, similar comments apply to other programs.
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- The total portfolio value is off by $.06 (too high). This is due to the incorrect rounding of the market value for each security. Market values are not to be rounded, they are always TRUNCATED to 2 digits to the right of the decimal mark. You can see this at the Fidelity web site. Such incorrect rounding accounts for $.05 of the error, the additional error of $.01 results from the adding of the security values.
- When a transaction is entered, IF both the number and shares and the value are given, the price is irrelevant only of interest as an historical item. It is incorrect to compute the price if the user manually enters the price, or the price is downloaded from wherever. For example, on 16 Sept 2005, the NAV of FSPTX used for a purchase was .54. The amount purchased was $.97 resulting in the purchase of .016 shares. Fund Manager displays the price as .63. Manually correcting the price does not stick.
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See Howard Kaikow's web site.
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