Re: Canadian Investor

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In Reply to: Re: Canadian Investor posted by Daniel on February 28, 2005 at 20:39:07:

: : 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.

Hi Daniel,

You are doing it correctly. You always record all transactions in the
investment's native currency. For the example discussed above the $45 and $36
figures were both CDN $. If you look back at Dave's original example:

http://www.fundmanagersoftware.com/wwwboard/messages/7702.html

he was just using numbers where the price really did drop a lot, this was not
because one was in USD and the other in CDN.

Thanks,
Mark
--
Mark Beiley
Fund Manager, portfolio management software for Windows 95/98/ME/NT/00/XP/2003

Replies:

• Re: Canadian Investor Daniel 21:29:14 02/28/05 (0)