Simple Investment Tracking with IRR?

Question

I'm new to Quicken and feel like I'm missing something obvious with the Simple Investment tracking option.  I'm hoping to track only the overall balance of an investment account using Simple Investment Tracking in Quicken but still be able to see IRR over time for the overall balance using the Investment Performance report.

I've seen several recommendations on here on how to simply track the value of an account by using a fake security that represents the account balance and just updating the price history each month/quarter.  I'm good with that but was hoping there was a way to also add in my cash deposits to this account so I can get true IRR that accounts for my basis.  I currently do this in a spreadsheet where I just keep up with contributions and monthly balance over time to calculate the IRR.

The account I want to do this with is an IRA that I pretty much only deposit into in January so the actual deposit entries would be very few.  Thanks for any suggestions you can offer!

Tom Young · Answer

"I forgot to mention that I'm doing this all as "offline" transactions."

So how does Simple Investing come into play here?  How are you tracking what's in the Account?

If you make a contribution to the Account from your Checking Account you'd typically use a Transfer entry and Quicken would recognize that as some money that crossed the Account's "border" and "see" that as new money into the Account on such and such a date, and the IRR Report certainly should pick that up.

If you don't want the details of your security holdings in the Investment Account then I do think inventing a "security" like "Generic security" that you buy at $1 per share and periodically value - say at month end - in the "Holdings" window to get the value in the Account in line with the total value per the broker would work fine.  You could use the IRR Report for accurate performance tracking, as long as you period always starts at the beginning of a month and ends at the end of a month.

Matthew_S · Answer

Thanks, Tom!  I forgot to mention that I'm doing this all as "offline" transactions.  I don't want to automatically pull in any information.  I was hoping I was overlooking something because the "Simple Investing" option when you add an account in Quicken says "…and investment returns over time."  I'm not sure how it would calculate any sort of "return" if it's not asking me for how much I spent to acquire it.  That's why I feel like I'm missing how to add my original funding amount when using the "Simple Investing" option.

I basically looking for something like:

January 1 - I added $1,000 cash

January 30 - account value is $1,020 (so a $20 gain)

February 28 - account value is $1,025 (now a $25 total gain)

Continue to play it out through the end of the year and the account is worth $1,100 for an overall gain of $100 for the year or 10% IRR.  That's all I'm really looking for instead of having to enter all the detailed transactions about which ticker was purchased on which date for what price.  Just a simple I added $1,000 to the account and it's now worth $1,100 scenario.

Hopefully someone has an idea that would work.  I have kicked around the idea of just creating the account like a savings account and using custom categories for "market appreciation" and "market depreciation."  I'm just not sure that would show up in any of the reporting about Investment Performance.

Tom Young · Answer

I have no experience with Simple Investment Tracking so I'm pretty much flying blind here.  As I understand the situation - and I may well be wrong - there's no "transactions" per se that get downloaded into the Account, everything is handled with balance adjustments based on what the broker is reporting as the account's balance.  So I'm guessing that a cash deposit into the broker's account is reported as a simple balance adjustment in the Quicken Account, without specifying it as a cash deposit?  (If my assumption here is correct I'd think that the outflow of cash from the Checking Account would be recorded as a "one sided" entry, i.e., the "receiving" Account for the outflow would be the the name of the Checking Account with the name surrounded by square brackets?)

If all that's correct then Quicken's IRR calculator doesn't have any way to make a correct calculation that includes cash flows since there's no transaction Quicken can identify as "something that came into or flowed out of this Investment Account."  It's that "border crossing" between two distinct Accounts that Quicken would seem to lack with Simple Investing.