Ajusted historical prices from Yahoo!

[drkaveh]

Hi Mark,

The "adjusted historical prices" from Yahoo do not seem to be adjusted!

As an example please see:

http://finance.yahoo.com/q/hp?s=DODBX

Do you agree or am i missing something?

If so, from where can I download adjusted prices?

Thank You!

[Mark]

Hi drkaveh,

They look adjusted okay to me. Note, the prices are back adjusted _before_ splits and distributions, so you need to look back before a split or distribution before you will see any adjusting. On the example link you sent me, look at December 27, 2007, and you will see the "Adj Close" column is lower than the "Close" column by the amount of the distribution on the 28th.

[drkaveh]

Thank you Mark!
I guess I thought adjusted means it would take into account the dividend and adjust the price UP ( to include the dividend).
I use this to compare my portfolio to a hypothetical investment.
How can I do this if the dividends are not reflected in the downloaded price? I.e. how do I account for the dividends paid by the hypothetical investment?
Thanks!
Kaveh

[Mark]

Hi Kaveh,

Adjusting prices prior to dividends down will work for creating a hypothetical investment to compare against your portfolio. You just need to retrieve this investment all the way back to inception after any dividend is paid.

Are you running into any problem with this approach?

[drkaveh]

Thank you Mark,
I am probably not able to make myself clear.
If we go back to the example above (DODBX), how will the $5+ distribution be accounted for if the price after the distribution is $5+ less! I.e. what happens to the $5+ when I download these prices, as both the adjusted price and the closing price AFTER the distribution are exactly the same?
Thank you again!
Kaveh

[Mark]

Hi Kaveh,

After any distribution you would need to re-retrieve all the way back to the inception for this investment.

The performance is relative, so by reducing all the prices prior to the distribution, the performance will include the effects of the dividend. This is why I say you have to retrieve all prices back to the earliest time you are interested in for this hypothetical investment.

For example, let's say the real price today is $80, and they paid a $5 dividend in January. If the real price at the end of last December was $75, the adjusted price at the end of last December would be $70, so you would have a gain of $10/share, with the current price of $80, and an adjusted price of $70.

If you do not like the way this works, your other option is to retrieve real closing prices (not adjusted) and record the actual distribution transactions.