Money Market in brokerage

I have found that it all depends on what transactions the broker downloads.

For Fidelity they don't download transaction for the buying and selling in and out of the money market fund.  So for them, I just let it go to the cash balance.

For Vanguard they send the transactions to buy and sell in and out of the money fund, so in that case I just use those transactions and my cash balance is zero, and my "cash for the account" is in that money market fund.

Mark said:

If you use the money market as cash don't you have to "buy" MM shares when you receive dividends and "sell" upon purchase of more stock?

Again that depends on what the financial institution sent (that "action" of the transaction).

Let me show you some examples.
Fidelity.


They send just a Div transaction, therefore it just adds to the cash balance.

Now look at what they sent for a "reinvest" in a different fund:


So they sent two Div transactions that added to the cash balance, and then sent a buy transactions for the "reinvest".

Now here is Vanguard:


They sent a "ReinvDiv" transaction which does the div/buy in one transaction.

But the more I think of it I now know what you are facing.

So back to your original question:

The brokerage downloads
transactions as if dividends are reinvestments of money market. What do you all
do?

I have this problem in my wife's 401K account (Merrill Lynch).

They send all of the dividends as Div transactions.  When in fact about once a month they are reinvestments.

So the bottom line is that this is a "coding problem" from the financial institution.
What they are suppose to be sending for a reinvestment is one of the two approaches I show above.

What you need to do to fix the problem is to change the transaction/action type from Div to Reinvest.