Newbie problem with understanding cash account.

[c4duser]

I'm a new client and have been able to set up my brokerage account portfolios and investments.

However, the graphs for value of the portfolio show strange results, sometimes with negative or zero balances. I think the problem may have something to do with the handling of cash accounts.

My broker account has a sweep money market fund through which all purchases, sales, dividends, withdrawals pass. In other words, when I buy a stock, the money market fund automatically redeems that number of shares which go into cash which then goes to pay for the new shares.

What I would like to see is the graphs and porfolio values to always reflect the total values (investments + cash (mmf or otherwise).

The way I have things set up now, shows a 'cash' account the displays the value in the money market fund, while the money market fund show zero value.

What should I do to set up graphs, reports, and portfolios to show results in this way?

Thanks.

[Mark]

Hi c4duser,

The portfolio value on any date is just the sum of all the investment market values, including any cash investments. If you're getting some negative numbers plotted for a certain date, look at the value of your investments, and see why they are negative. One good way to do this would be to create a Portfolio Value report for the date in question, and list by investment. This way you can see all your investment's individual market values on that date. The sum would be the value being plotted. If you find an incorrect value, edit that investment in the Data Register, and look at the recorded transactions to see why the value is the way it is.

[c4duser]

Hi Mark,

Thanks for the quick reply. Unfortunately, I'm still having a hard time setting up FM to correctly download my Schwab accounts.

1. All the data available on Schwab is not downloaded. I've even erased all the files and started over, reloading FM. Still can't get it to work.
2. There is a note in the help files referring to Schwab link that refers to a 'File/Import/Transactios/SchwabLink ... command, but my version of FM doesn't have this command (the newest version).
3. I have the following problems:

a. Sometimes FM is not downloading all the data available on my Schwab account
b. Some accounts refuse to reconcile, even after imputting the values, while other work just fine.

Do you have any suggestions on how to download multiple Schwab accounts, with data going back many years? Before I contact Schwab, I want to be sure the FM can handle the job.

Thanks.

[Mark]

Hi c4duser,

SchwabLink (now called Schwab Data Delivery) is a feature specific to Advisors. If you have a regular individual account, you won't have or use this method. Instead, use the transaction retrieve method.

When retrieving transactions from Schwab you can only get transactions for the last 2 years. This is just how long they've decided to keep transactions on their OFX server. Even though they may show transaction history longer on their web server, their OFX server only has 2 years. If you use the New Portfolio Wizard, and retrieve "Transactions and Positions", this should set up your account properly. When using this, Fund Manager retrieves all available transactions (which is 2 years in the case of Schwab), and it also retrieves your current positions. Fund Manager will make an adjustment buy or sell at the beginning of this period in order to get your current balances correct. You can then optionally go edit this adjustment entry to add in the actual details.

If you were previously only retrieving transactions and your accounts are older than 2 years, this would explain why you weren't ending up with the correct balances. Retrieving both transactions and positions should rectify this.

If you have multiple accounts, you want to have one sub-portfolio per account. Each account retrieves/reconciles independently.

[c4duser]

Hi Mark,

Following your instructions, I've continued to try to get the Schwab accounts set up properly. I've erased all the files, reinstalled FM 4 or 5 times, and still can't get it to work.

The problem seems to be this (example of a very simple account with only one stock plus the sweep money market fund.

1. Whether I designated the MMF as my 'cash' account, or whether I indicate 'no cash', FM always creates a 'cash account' with the correct value on the final day of the period, while presenting the MMF with a zero amount of shares and no value.

2. FM only registers values in the 'cash' account when there are purchases and sales of other shares, NOT THE MMF SHARES. The result is that, except on the very last day of the period, the total value of the portfolio is always wrong. FM does not register any value for the 'cash' account on the first day of the period.

3. If FM would simply ignore the cash account (created by FM itself) entirely, and report the MMF share movement, like any other share, I think the right results would appear.

4. Since, even for a simple account with only one investment, manually posting the movement of the MMF every day would be unacceptable, a solution to this problem is necessary.

Any help you can give will be appreciated.

Thanks.

[Mark]

Hi c4duser,

If you want all of your money used for buys/sells to go into/out of MMF, then select this as your default cash account. After going through the New Portfolio Wizard you can close the "cash account" investment. You may then also need to record an adjustment into MMF to get it to be your correct cash balance, since FM put that into the just closed "cash account".

If you still have troubles, please just give me a call, and we can walk through one together on the phone.

[c4duser]

Hi Mark,

Thanks for your help. I was able to get the most simple of my accounts (1 holding, 1 closed transaction, 1 MMF) to work properly, following your suggestions.

What I did was as follows:

1. Download all data from Schwab from the earliest date (turned out to be 3.6.2009), using the portfolio set up wizard and setting the MMF as the cash account.
2. Download all prices from Yahoo from before the earliest downloaded portfolio date.
2. Adjust the EARLIEST MMF entry by adding the final MMF share balance and putting in a $1 price.
3. Delete the cash account.

I was having a problem before because I was using the reconcile feature, which IMHO doesn't seem to work as one might expect.

What I found was this:

The posting to the earliest entry value for the MMF was as follows:

1. price = 0
2. shares = x
3. memo = Adjustment to obtain retrieved balance
4. date = 3/6/2009

To correctly reconcile the account, it was necessary to set the price to $1, and add y (the current number of MMF shares) to x, the computer generated 'adjustment'.

I was having trouble because I was using the 'reconcile' feature, which, it seems, only reconciles the final balances, leaving prior balances unadjusted.

Thanks.

[Mark]

Hi c4duser,

Glad you got it set up. Here are some comments on how the reconcile feature works.

The reconcile feature compares your "share" balances on a given date to a statement from your broker. The statement date is provided by the broker. The purchase "price" does not affect how many shares you own. It of course does affect your cost basis, but not the owned quantity.

The share balance on any given date is simply the sum of all prior recorded transactions up to that date. You can see all these transactions that affect share balance in the Data Register under the "Investments (all)" data type.