Method for Entering Private Investments

[jimkorein]

As well as stocks and bonds, I have some private investments, which I would like to incorporate in my Fund Manger portfolio.

Suppose I have a real estate investment which cost $1000. At some future I might sell it for a different price. Also, I may receive distributions along the way. Does it matter if I enter it as 1 shares with a price of $1000 or 1000 shares with a price of $1? It would seem that the former would be easier to update, if I want to mark the value up or down, by just adjusting the price. How would I enter distributions? Is this consistent with the intended use?

Secondly, if I have an investment where I have put in $500, but I expect a future capital call of $500, is there a way of indicating this? It would be helpfule to be able to tally up my future commitments. Thanks, Jim

[Mark]

Hi Jim,

To record your private investments I would suggest recording with the price at $1, and the shares equal to the value. This works better in cases where you have an investment that doesn't really have a share price. When your investment value changes, record a reinvested distribution. Keep the price at $1, and the shares equal to the change in value for the distribution. This way, you always end up with the number of shares owned being equal to the value of the investment. A distribution can be either positive or negative.

Is your "capital call" when you have to pay more money? If so, there really isn't any special feature to help remind you of this. I guess you could use a price alert, that starts on that date. Set it to notify you after the expected call date, at a price you know will trip the alert.

[dam4kzs]

Hi Mark,

I'm tracking performance using a brokerage account's Month-End NAV rather than all the security transactions that go on in the account. On the inception date of the account I'm using Transfer In for the total Cash & Securities that are transfered in from other brokers to start the account. Almost every month I have cash &/or securities coming in or out. I'm using the $1 share price & using reinvestment + or - to reflect changes in NAV for an account, but how should I enter the Transfers In/Out to get accurate reports?

Thanks,

Drew

[Mark]

Hi Drew,

For money you take out of the account, record a sell. For money you put into the account, record a buy. For increases/decreases due to gains/losses, record a reinvested distribution.

[dam4kzs]

Won't the default cash be affected by the Buys & Sells?

[Mark]

Yes, it would. I thought you may have had this in its own sub-portfolio, with no default cash account. You could use transfer in/out instead of buy/sell if you don't want to affect an assigned default cash account.

[dam4kzs]

Thanks Mark. That makes sense.