Pitfalls, if any, of updating investments yearly and manually

Question

So, I'm having a little trouble learning how Quicken "thinks".  I have several brokerage accounts with the major firms, but do not use auto online transaction updates inside quicken because of security concerns.  I only care about year end to year end performance / expenses / income, so at the end of each year I need to manually update each stock / mutual fund / bond with lump sum (summary) entries.  For example, one summary entry for dividends per stock per year. I assume I need to enter dividends / interest / etc, but what else and where ??  I personally think of all market gain, realized or not, as income, so will these entries show me the report I want every year showing me all income by category?  Thanks for any help !!

q_lurker · Answer

Others have covered most of my thoughts adequately.  One other thing I would like to point out is that 'returns' and 'performance' are broadly used terms that can have many different specific meanings.  In that context, if you aggregate all dividends to one year end transaction vs 4 transaction throughout the year, that will alter some return calculations but not others.  Similarly, when buys, sells etc. occur can be a factor.  So consolidating to a set of year-end calculations may be adequate for your understanding and decision making, but it could also be misleading in some cases.

For the most part, scattering four dividends on a stock paying out 2% per year versus consolidating that 2% payout to year end PROBABLY does not make a big difference.  But you can't extrapolate that to all cases.

Poinz2 · Answer

Thank you all for taking the time to comment.  It really helps me confirming what I think I know and adding new ideas.  And yes, I get the unrealized gains comments <smile>.

Jim_Harman · Answer

If you think of market gains and losses as income and expenses, you have been spending a lot recently!

That aside, what to record depends on how complete and accurate you want Quicken's data to be, and how you plan to use it.

Would you be happy with just tracking the account balances, and not the individual securities?

Do you want Quicken to track your dividends and interest, to understand your income and tax situation?

Do you want Quicken to track your realized capital gains and losses for tax purposes?

Do you want Quicken to track any commissions and management fees you are paying?

Do you want Quicken to track the performance of your securities and/or accounts?

The answers to these questions will determine what you need to record.