Re: Account Fee

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In Reply to: Account Fee posted by Ron Berliner on December 02, 2000 at 10:10:30:

: Dear Mr. Beiley:

: I have recently placed an amount of money with a manager who uses it to buy a
: basket of stocks. Some of the account remains in a money market. I pay no
: transaction fees on the stock purchases and sales but I pay a quarterly fee.

: I have been tracking the status of the account using FundManager. When the
: manager takes his fee and I include this fee as an Account Fee in FundManager,
: it appears to decrease the "cost" of the portfolio in the cost vs. value graph.

: Is this the right way to handle this matter. It seems to me that the account
: fee should decrease the "value" of the portfolio (the fee comes out of the money
: market account) but not its "cost". Is there some way to get Fund Manager to do
: this?

: Thanks in advance.

: R. Berliner

Hi Ron,
It sounds like you have recorded the account fee improperly. If money was
taken out of the money market to pay this fee you should record a "reinvested"
account fee. This will take the money out of the money market to pay the
account fee, thus lowering the value of the money market. The account fee
should be recorded with a negative value and shares. Account fees are
really just treated as negative distributions, so the value/shares should both
be negative. The results you described sound like you don't have it reinvested
and the value is positive, rather than negative.

Thanks,
Mark
--
Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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