Re: Company MM conversion

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In Reply to: Company MM conversion posted by Hap on January 14, 2006 at 11:29:14:

: Mark,

: As part of my company's 401k contribution scheme, they buy our company shares of a money market equivalent in my name each month. Quarterly, they convert these MM shares into stock shares at the going share price.

: I've seen your advice for doing one-time conversions using a stock split, but, since this is continuous, ongoing monthly/quarterly process, how do I treat the transactions? I've been using a sell and buy, but I'm concerned that it doesn't give me the true performance on a portfolio level.

: If using a sell/buy is the answer, do the sell and buy transactions cancel each other out, and the effective increase/decrease of the stock shares get figured into the portfolio performance? It wouldn't seem so, unless the holding time of the MM shares is factored.

: Appreciate you ideas.

: Hap

Hi Hap,

This sounds like you could record this as purchases into your MM fund, and then quarterly sells of your MM, and a purchase of the stock. This would give you an accurate overall porfolio yield. Yields do indeed take into account how long you owned something.

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

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