Money Market Investment Type to Avoid Constant Addt'l Clicks to Specify Lots

SeaSilver8

This has been a frequently recurring topic within the community. I do not know how things are handled behind-the-scenes, but it seems logical that creating a new Investment Type for Money Markets (or subtype "Mutual Fund - Money Market") that would identify securities with a fixed price value (usually $1 per share) would provide a method to reduce data file size and be more user friendly as purchase Lots of this type would not need to be stored. I and several other users get frustrated when a money market fund is used to get interest but downloaded checking account transactions involve Money Market sales to pay for check payments are not accepted with a simple "Accept All" click. At times the current situation becomes a significant annoyance.

Boatnmaniac

I long ago (10+ yrs ago?) stopped manually assigning sold lots to held lots in Quicken because it simply provided no benefit to me and it was a lot of work. What I did was to change my lot tracking to FIFO and then set Quicken to automatically assign the lots when they are accepted. This matches how I have my accounts set up at Fidelity.

Following are how my Preferences are set. This needs to be done on each account individually but it works really well. I can't remember the last time I was prompted to match sold lots to held lots. It's automatically done when the lots are accepted.

For me this works really well because most of my wife's and my investments are in IRAs and Roth IRAs so there are no tax implications if the sold lots are not properly matched to the correct held lots.

For our taxable brokerage account there were initially some mismatching issues so there would be some capital gains reporting that was not correct. But after a while this issue went away as the various held investments were liquidated and replaced with new investments. Now they track really well and I generally don't find any significant issues in the Cap Gains and the Sch D reports nor with Tax Planner.

This also seems to work flawlessly when selling MMFs to fund a security purchase or cash distribution. While Fidelity downloads MMFs as part of the Cash Balance this is done only with the Core fund (also referred to as the Settlement fund). Other held MMFs in the account are tracked just like any other equity security with shares being reported instead of downloading the value as cash value.

When I don't have enough cash in my Cash Balance (i.e., my Core fund value) to fund a transaction, Fidelity will then automatically liquidate some of my other held MMFs to cover the cash balance shortfall. I never have to do any lot assigning and the new Buy transaction or distribution completes properly without requiring any action on my part. It's all really very transparent.

If I'm understanding the issue correctly, I think that using these Preference settings might perhaps resolve it.

NotACPA

I don't see this as needed. In my Fidelity accounts in Q, I just carry the cash as cash … not as a security.

Jim_Harman

@NotACPA Unless there is some trick I have not discovered, Vanguard brokerage accounts always download Bought and Sold transactions to sweep cash into and out of the settlement fund VMFXX. I have the "Use average cost" box checked for VMFXX, but each time VMFXX shares are sold, it asks whether to use average cost. At the end of each month it downloads a ReinvDiv for VMFXX.

In addition to cluttering the account with extra transactions, this makes the "Show cash in a checking account" option pretty much useless because the cash balance always goes to zero.

I'm not sure that implementing a new security type would fix this. I suppose I could not accept or delete all the Bought and Sold transactions for VMFXX and edit the ReinvDivs to be Divs, but it would certainly be nice if this happened automatically. I have seen references to a setting for this on the Reconcile page, but I don't see that.

NotACPA

I'm at Fidelity, not Vanguard … so VMFXX doesn't apply to me.

And by carrying as cash, those txn just get interpreted as cash txn … at least in my Fido accts.

Our taxable accts use "Show Cash …" but out retirement accts just use cash.

Chris_QPW

The first thing to understand is that different brokerages send Quicken different investment transactions for this. And Fidelity and Vanguard are examples of doing it oppositely and in general if you try to fight what they are doing you will make extra work for yourself. With Fidelity it doesn't send transactions for buys/sells so it is best to leave it in cash. For Vanguard it does send them, so it is usually best to let it treat it as a security.

But I agree with the original idea in the sense that the user should have the choice, but maybe not exactly on the way it should be implemented (not really sure, it would really depend on what is in the code).

I have no idea of what triggers it, but for some brokerages you get the question about "Cash Representation". If you this got triggered, you can select the "Update Cash Balance" menu item in the register and get this:

Selecting it you get:

Note that when I setup this account at Chase I was asked if I wanted to treat QACDS as cash or as a security.

So, in a nutshell this feature already exists, but there is the mystery of why it only triggers for some financial institutions, and it has a limitation that I would love to see fixed. The problem I would like to see fixed is the fact that Chase uses multiple accounts/securities as it moves cash around, and as such I can only specify one to be treated as cash instead of all these kinds of securities.

I suppose that is "Money Market Investment" type might be the way to trigger this behavior (which basically just amounts to removing all buy/sell transactions as they download so that the cash balance just handles this. Another way might be a checkbox selection on the security or maybe finding a way to allow the user to trigger the existing "Cash Representation" feature to handle this.

Note that in the case of a brokerage like Fidelity where it doesn't send buy or sell transactions for this there isn't anything that needs to be done (I don't think there is a call for "faking buys/sells of a mutual fund" so that it is treated like a security, but I could be wrong about that).

NotACPA

@Chris_QPW @Jim_Harman I'll note that the OP hasn't specified which firm is being used, so our advice, while useful in general, is largely speculative.

Boatnmaniac

I long ago (10+ yrs ago?) stopped manually assigning sold lots to held lots in Quicken because it simply provided no benefit to me and it was a lot of work. What I did was to change my lot tracking to FIFO and then set Quicken to automatically assign the lots when they are accepted. This matches how I have my accounts set up at Fidelity.

Following are how my Preferences are set. This needs to be done on each account individually but it works really well. I can't remember the last time I was prompted to match sold lots to held lots. It's automatically done when the lots are accepted.

For me this works really well because most of my wife's and my investments are in IRAs and Roth IRAs so there are no tax implications if the sold lots are not properly matched to the correct held lots.

For our taxable brokerage account there were initially some mismatching issues so there would be some capital gains reporting that was not correct. But after a while this issue went away as the various held investments were liquidated and replaced with new investments. Now they track really well and I generally don't find any significant issues in the Cap Gains and the Sch D reports nor with Tax Planner.

This also seems to work flawlessly when selling MMFs to fund a security purchase or cash distribution. While Fidelity downloads MMFs as part of the Cash Balance this is done only with the Core fund (also referred to as the Settlement fund). Other held MMFs in the account are tracked just like any other equity security with shares being reported instead of downloading the value as cash value.

When I don't have enough cash in my Cash Balance (i.e., my Core fund value) to fund a transaction, Fidelity will then automatically liquidate some of my other held MMFs to cover the cash balance shortfall. I never have to do any lot assigning and the new Buy transaction or distribution completes properly without requiring any action on my part. It's all really very transparent.

If I'm understanding the issue correctly, I think that using these Preference settings might perhaps resolve it.

SeaSilver8

@Boatnmaniac Thank-you for your suggestion, this works perfectly for me. I have the exact same issue that you appear to have had. I apologize for the long delay replying, I've been consumed with a family issue. I feel very fortunate for you to have replied, all prior attempts to find a solution focus on core/settlement fund transactions which is not the issue I was trying to resolve. Thank-you again.