Understanding Gain/Loss

Steve29

I'd like Quicken to answer this simple question: "How much did I make on this investment."

You could say, well, just check the Gain/Loss column (which is Market Value minus Cost Basis).

That's correct for tax purposes, but for my purposes, I just want to look at it in terms of how much I invested. If I invest $1000 and I get $200 in dividends, and the investment is worth $1500, my intuition says that I made $500. But the Gain/Loss will be $300.

Do I have to list all dividends and then add them to Gain/Loss? I would have to do that with multiple investments — a big pain. Is there an easier way?

I'm on Quicken Classic Deluxe Version 7.10.1

Thanks, in advance, to anyone who can shed some light on this.

NotACPA

The value of the security went, per your description, from $1000 to $1500. That's a $500 gain. While the dividend increases what you have in hand, it doesn't increase the value of the security … unless you reinvested it which counts as an additional purchase.

IF there's that add'l purchase then your cost basis is no longer $1000, it's now $1200 for a gain of $300.

Steve29

Thanks for that. I understand how it works. But I want Quicken to tell me how much I invested, not including dividends. How do I get Quicken to show me the difference between the money I put in and the current value? Is there a report like that? Or do I have to list all reinvestment transactions, export and then add them up? (not fun for multiple investments)

jacobs

Let me see if I can express this correctly. I've created a dummy account with a dummy security. As shown here, on 1/1/24 I purchased the 100 shares of the security for $10/share, for a $1,000 investment. And on 6/30/24, I received a $200 dividend:

In the Portfolio screen by Portfolio Value, it shows I have the 100 shares, now valued at $13/share, for a market vale of $1,300. And I have $200 in cash from the dividend:

If you now switch the Portfolio screen to view by Performance, and show the ROI column(s), it shows that I have a 50% Return on Investment — which correctly represents my total $500 gain on my $1,000 investment:

Isn't that what you were looking for, the total return on your investment? If you want to see this in dollars instead of percentage, I'm not sure there's a way to do that. But if you add the Cost Basis column to the Performance screen, you can simply (manually) multiply the Cost Basis by the ROI to get your investment gain:

Jon

The ROI column isn't always going to produce the value OP is looking for because it doesn't transfer between accounts. I recently transferred an IRA from one firm to another and started a new Quicken account for the new IRA, and when I look at the ROI for the investments in that IRA it only includes the changes in value since the account was transferred, even for investments that were transferred in-kind and were not sold & repurchased. One of the investments in that IRA is currently showing a slightly negative ROI, but my cost basis in that investment is much lower than the current value so it's actually had a gain rather than a loss, but since the gains all occurred while the IRA was at the old firm they aren't included. I can go back and look at the portfolio in the old account right before the transfer happened & see the ROI as of the transfer date but I don't think I can get Quicken to combine those figures & give me the total ROI.

I suppose I could have avoided that by keeping the same Quicken account instead of starting a new one when I moved the IRA but I've never done things that way, I've always kept a 1-1 correlation between Quicken accounts and real world accounts.

Never mind, you can see the total ROI if you look at the investment on the Investing Group and sort the Performance page "By Security".

jacobs

@Jon When you moved the IRA to the new brokerage, did you use Transfer Shares in Quicken to move the holdings? Transfer Shares creates Add Shares transactions which have the original date acquired for each lot, so Quicken should be able to correctly calculate ROI using those dates just as if it was still in the original account. So if you did that and it doesn't calculate ROI correctly, I wonder if there's a bug or design miss where it is using the transaction date of the Add Shares transactions rather than the Date Acquired?

Jon

@jacobs I did use Transfer Shares to move assets to the new account. But if you're looking at the performance page for the individual account I don;t think it's unreasonable for it to show the performance for just that account. When I switch to the Investing Group and look at performance there it seems to include the history of both accounts.

OTOH, the "ROI (%)" column is not giving me the same value as "Market Value/CostBasis - 1" so I'm still not fully confidant in that number.

Steve29

Jacobs,

Thank you so much for creating that demonstration! I think I understand what you've said. But my confusion comes with reinvested dividends (all my dividends are reinvested). In your example, if you reinvested the $200 dividend, you'd still show the market value as roughly $1500, but your cost basis would be $1200. To get a basic "amount I gained from this investment" you'd have to take the cost basis and subtract dividends, leaving you with $1000. And then you'd have a $500 gain. Does that make sense?

I've also tried something else, which seems too simple to me, but I think it's correct. Show the transactions for an account and search for all transfers. Quicken will total the items it finds. That's your investment. Compare that to the market value of the account. I think that tells you in the simplest way: "this is what I put in and this is what I have now." If you took money out of the account, that will reduce the total invested, but I think that's what you want. Does this make sense? What am I missing?

jacobs

But my confusion comes with reinvested dividends (all my dividends are reinvested)

In my example, with the dividend paid in cash, the math was simple: "what you made" was the gain on the initial investment ($300) plus the dividend paid in cash ($200) = $500 or a 50% ROI.

If the dividend is reinvested, calculating the ROI is trickier, because now the dividend reinvested in additional shares is also gaining value. It's the same as compounding interest. So your ROI should now be higher than 50% because instead of your dividend sitting idle as cash, it purchased additional shares which have experienced their own gain.

So in my example above, if I change the 6/30/24 Dividend transaction to a Reinvest Dividend transaction, with the $200 dividend purchasing 20 additional shares at $10 on that date, then the ROI goes up to 56%. That's because the security is now worth $13 per share, so your $200 reinvested dividends have grown from $10 to $13 per share and now have a value of $260.

(In real life, your reinvested dividend would have been bought at a different price than your original investment, but I kept the price at $10/share for illustration just to make the math clearer.)

So what is the ROI? ROI is calculated by subtracting the initial cost of the investment from its final value, then dividing this new number by the cost of the investment, and multiplying it by 100. So in this case: $1,560 - $1,000 = $560 ÷ $1,000 x 100 = 56%.

So going all the way back to your original "what did I make on this investment", it's simply market value minus your original investment (not counting reinvestments): $1,560 - $1,000 = $560. Quicken doesn't show you your original purchase amount for a security, because for most purposes, you're concerned with your cost basis, not the original purchase amount. So I think you'll need to do this calculation manually if this is the number you want to know. (If someone else knows a way to show that value, hopefully they'll jump in here.)

Steve29

Wow, thanks so much for all that work! It's helpful to see the calculation for ROI. Needless to say, what I want is the ROI in dollars, and for that, I have to know the amount invested. Which I have to figure out.

I think what I want is to total all the BUY transactions for a particular security and then subtract the SELL transactions. I think you can do that only via a report. Then take that value and compare it with the current value. Does that make sense?

There's another, simpler approach. Instead of looking at an individual fund, look at the whole account. Find the Transfer transactions (which you can do in the register, without a report). That's your amount invested for the whole account. Compare that to the Current Value of the whole account. That's quite simple and not difficult. Make sense?

In terms of features I'd like to see added in Quicken:

— show me the amount invested, don't make me calculate it.

— show me the ROI in dollars rather than just as a percentage

— show me the IRR for periods longer than 5 yrs. 10/20/all dates would be very helpful. Five years is just too short a time to learn much of anything.

Thanks again —

jacobs

@Steve29 I understand what you're looking for. What you should do is create an Idea post; Ideas are requests for new features or functionality in the program. Navigate to Product Ideas > Ideas for Mac Classic > Investments. Idea threads are open for other users to add their votes if they agree it would be a useful feature, and to add their own comments; the developers particularly welcome use cases that illustrate how/why a feature would be useful. When Idea topics reach a necessary threshold of votes, they are forwarded to the development team for consideration of usefulness, work involved in possible implementation, and where it fits in context with all their other priorities.

It's best to keep each Idea post focused on one issue; that makes it feasible for other users to add their votes and comments, and for the developers to grasp what's being asked for.

But before you create a new topic, you should review a few of the existing Idea topics in that section which, I believe, hit on some of the things you're asking for. In particular, I think this addresses your first bullet point — and the good news is that the developers have marked it as "Planned" for future development.

https://community.quicken.com/discussion/7875129/portfolio-view-income-suggestion-add-dividend-interest-and-yield-columns-q-mac

https://community.quicken.com/discussion/7942724/more-useful-information-on-investments

https://community.quicken.com/discussion/7910394/need-more-investment-reports-in-q-mac

Click on any/all of these View Post links to add you vote and, optionally, comments to the topics. More votes get these ideas closer to being considered by the developers for their future schedule.

Steve29

Okay, thanks. Will do. But I should say that I've posted investment report ideas there several times and haven't seen much evidence of interest on the part of the Quicken team to address these things. The stuff I asked for above is so basic. It shouldn't really be debatable to have an IRR longer than 5 years, or ROI in dollars or an Amount Invested column. They're all simple calculations — not a heavy lift in terms of engineering time. I would guess that there's a prejudice on the part of management that serious investors aren't interested in Quicken Mac. Sadly, it's a self-fulfilling prophesy. People who want those features have already moved to other apps.

jacobs

@Steve29 It's not a matter of what's "debatable" or not, nor what's "simple" or "basic". And I definitely don't think it's rooted in management believing that Quicken Mac users aren't serious investors.

(If I had a quarter for every time some user has said that a feature is "simple"/"basic"/"obvious" or something which could be done in "an evening of work" or something which a "high school student could do" or that the developers are "brain dead" or "don't care about users", I think I'd have enough money by now to have someone manage my personal finances for me instead of using Quicken! 🤣🤣)

The issue is simply that there are hundreds of feature requests, some small and some large, and the small Mac development team can only churn out a few things every other month or so. If they prioritize the smaller things that some people want, then some of the big development projects never get going; if they tackle big projects which consume multiple members of the development team for many months, then relatively few smaller things get worked on — so they're damned if they do and damned if they don't. How they actually decide which things to work on and which to let wait for a while longer is something we're never privy to.

And you're right that the investment area of the program hasn't received a lot of attention over the years. Recently, we're starting to see new investment features being rolled out, such as the Watchlist and Security Details screens. you might feel those aren't as useful as other investment features, but they are things users have asked for over the years. And often what gets developed when depends on who on the development team is needed to implement particular features. My hope is that there will be a time when some major investment requests, particularly in the area of reporting, get tackled. Right now, the things the developers have teed up (e.g. marked as "Planned") seem to be largely focused on planning functionality: revamping the budget, adding planners for debt reduction, savings, and taxes, etc., as well as rounding out key core features of the business section of the program they debuted close to a year ago. So I'm not expecting to see major investment feature changes in the short-term future, but maybe we'll be pleasantly surprised.

Steve29

I looked at the old ideas, added some votes and started this new thread:

https://community.quicken.com/discussion/7957569/new-investment-columns/p1?new=1

Steve29

Okay, thanks Jacobs. As somebody who has been deeply involved with developing film editing software, I'm going to respectfully disagree with you about some of that. Adding a column to display a value that you already have is not a heavy lift. And we've been asking for this very basic stuff for a long time with no results, so I'm going to stick with the notion that management just doesn't think it's important. But I really appreciate your help and your commitment to share what you know with folks like me. You are one of the good guys and I really appreciate your help.