Re: Canadian Investor

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In Reply to: Re: Canadian Investor posted by Mark on February 21, 2005 at 12:45:45:

: On the cost basis, yes, this will work fine. In Fund Manager you record
: transactions in the native currency, so for your example, you would record
: that you purchased at $45/share, and sold at $36/share. All prices/transactions
: for an investment are recorded in their native currency. When reporting
: total portfolio figures you can use an exchange rate to get everything reporting
: in a common currency. See "Options / Currency Settings...". You can track
: investments in up to 8 different currencies.

: Thanks,
: Mark
: --

Wait. Shouldn't he record the transaction in the asset's "native currency" and let the program do the converting? Or am I doing everything "backwards"? I record my US transactions, which are the vast majority of my portfolio, in $USD, not "my" native currency ($CDN). When I buy stocks on a US market, I'm paying with $US I already have, so it would be cumbersome to exchange that (using an intraday rate for the currency conversion) into CDN funds. If I bought US stocks out of a $CDN cash or margin account and was therefore buying US currency at the same time, the other method would be easy: the broker would tell me the rate they charged. Of course, this method is an expensive way to trade & invest, as the broker charges the Bank of Canada exchange rate plus a percent or two.

In the Microsoft example above, I would record the purchase and sale at US$30. The program immediately converts that for me into CDN funds and displays it in the Data Register. I wouldn't record that I bought for CDN$45 and sold for CDN$36, but the program (if properly set up & maintained) would still show that to me.

The Capital Gains report in FM still works fine in my method, so long as the currency settings are updated daily, and there isn't a big difference between the exchange rate at the time of trade, and the exchange rate at the end of the day, which FM uses for its calculations. But I doubt any tax auditor would even think to look at the latter issue.

Replies:

• Re: Canadian Investor Mark 20:58:55 02/28/05 (1)
  • Re: Canadian Investor Daniel 21:29:14 02/28/05 (0)