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Average Cost Basis Selected - But It Still Asks Every Time

Toolworker

I've selected average cost basis for a money market fund, since the price is always 1.

I write checks on that fund, so sell transactions download all the time, and Quicken (QW Deluxe 2017) still asks for lot identification on every one.

Is there a way to get it to stop asking and always use average cost?

(This fund is not eligible to be designated as the account's core or sweep fund, although it works that way on the sell side.)

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q_lurker

There are some who advocate using the cash balance in the Quicken account as the match for the MM sweep fund at the brokerage. In that picture, there are no buys and sells of the MM fund. You simply delete the downloaded transactions if you agree with them. It may throw up a mismatch at comparing holdings, but as long as you are aware of the reasons and significance, it is not a real problem.

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q_lurker

No, not with QW2017.

QW-Subscription has made advances that way, but I am not sure about the impact with respect to Average Cost securities.

Jim_Harman

Nope, this is still a problem in QWin Subscription.

There is a new option to specify a default lot selection method, so one possibility would be to de-select Use average cost for your money market fund and set the default to First in, because the lots do not matter for MMFs. However this is an account-level option, so it would apply to all the securities in that account.

q_lurker

Jim_Harman said:

Nope, this is still a problem in QWin Subscription.

There is a new option to specify a default lot selection method, so one possibility would be to de-select Use average cost for your money market fund and set the default to First in, because the lots do not matter for MMFs. However this is an account-level option, so it would apply to all the securities in that account.

Any chance it applies to all non-average-cost securities, and the average cost securities would skip through based on their setting? Not sure what permutations have been tested.

Jim_Harman

I could try that, but because it is an account level option, I would have to be careful that it does not make undesirable selections for other sales. I would not think it should override the average cost selection.

q_lurker

@Toolworker. Please forgive the tangent.

My observation with QW2017 and responses to the problematic pop up— if the security was average cost and you selected lot specification, the program changed the state for that security to not use average cost. Vice versa also; a security would get changed to use average cost. Those changes would be retroactive across all accounts. I don’t recall if the warning popped up about the risks of such a change. Regardless IMO, those were really poor programming decisions.

I (was hoping) (am hoping) (would hope) that with the improvements to the process, those mistakes would be avoided. The logic should be — For non-average-cost securities in this account, use FIFO or LIFO. Not — For all securities...

Jim_Harman

A further thought on this topic:

If the sales are for a set amount each month, for example if the MMF is sold to make regular transfers from an investing account to a spending account, you might set the sale(s) up as a Scheduled Transaction Group, with the reminder set for a couple of days before the actual sale date.

If you accept the reminder before the corresponding sale(s) are downloaded, the downloaded transactions should match transactions that are already in your transaction list and you should not receive the Average Cost prompt.

For one-off transactions, if you enter the sale manually before the transaction is downloaded you should also not receive the Average Cost prompt.

Toolworker

Thanks, @q_lurker and @Jim_Harman. This is all valuable although it doesn't help in my case. The sales are triggered by checks clearing the brokerage account, so the amounts and timing vary.

What I could do is sell enough of the fund to cover a couple of months' checks. The proceeds would go into the account's real core MMF which Quicken treats as the cash balance.

There is enough in the higher yielding fund to make keeping it worthwhile. I was pleasantly surprised to discover that, although Fidelity limits the choice of core funds for automatic sweep, they will sweep >>out<< of any MMF in the account.

Sorry for going OT but it might be useful info for some.

q_lurker

Toolworker

Thanks, @q_lurker. That's not hassle-free, but I think it's the least hassle of any of the methods. Deleting the sell transactions and dismissing the holdings mismatches are fast operations.

It's a little more complicated because any dividends and interest will sweep into the real core MMF. So the cash balance will be the sum of the core MMF and the higher yielding one. But I can handle that.