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Buying / selling currencies

General questions about using Fund Manager that do not fit into any other forum.

Postby tjhughes72 » Thu Dec 23, 2010 4:59 am

Hello Mark,

I'm trying to record an FX transaction: I have an account with USD and want to sell USD to buy Australian dollars. I then want to use these Australian dollars to buy an Australian investment.

I've created to separate sub-portfolios, each with their respective cash accounts (so one sub-portfolio and associated cash account in USD; another in AUD).

How do I record a transaction where I sell USD and buy AUD? I just tried the "transfer shares between investments" wizard but that gave me an error message saying the transfer must be within the same currency.

Any help you can provide would be gratefully appreciated. And especially at this time of the year when a few saddos like me are still working....

Kind regards,

Tom.
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Postby Mark » Thu Dec 23, 2010 9:00 am

Hello Tom,

I would suggest just using a sell transaction for USD, and a buy transaction of AUD. You'll have to record each side of the transaction yourself in this case.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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Postby tjhughes72 » Thu Dec 23, 2010 10:56 am

Many thanks Mark - seems to work.

Kind regards,

Tom
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Postby ThomasK » Tue Feb 02, 2016 12:10 pm

Hi Mark,

Okay, along the currencies question, I'm doing the same thing but selling CAD to buy USD. Same hierarchy setup as Tom. I'm doing a "paper portfolio" and seeding it with $100,000 CAD. I'm going to Sell $45,000 CAD and buy USD.

1. Does such a transaction from Cash USD account to Cash AUD account (for example) utilize the FX table as generated in the Currency Settings automatically?

2. Do I have to do it manually? HOW exactly? I want to record the proper 'value' of the CAD -> USD FX. I just can't see exactly how to tell FM to track the transaction.

3. OR have I just missed the boat on this? Does the Currency Setting table handle this? For example, should I just not simply "Buy" an investment that has USD as its currency and thus Fund Manager just does the conversion on the transaction through the ONE Default Currency account (recall it is in CAD). If that be the case, then I only need the Default Currency account?

Thanks,
ThomasK
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Postby Mark » Tue Feb 02, 2016 8:48 pm

Hi ThomasK,

1) Utilize how? If you have these 2 cash investments in separate sub-portfolios, you have to record each transaction separately, as they aren't the default cash account for each other. If one is the default cash account for the other, then yes, it would use either the global exchange rate, or you can specify a transaction specific exchange rate. This would be used to determine how much default cash to buy/sell.

2) Typically you would have a separate sub-portfolio for each currency, so you would have to record both the sell of CAD cash and the buy of USD cash separately.

3) Not sure I'm following... If you record a transaction in currency X and the default cash is in currency Y, either the transaction specific or global exchange rate will be used to determine how much cash to add/remove from currency Y, based on the exchange rate from X to Y. The transaction specific rate takes priority, so if you specify it, that will be used. Otherwise the global exchange rate is used. Often however, you put each currency in a separate sub-portfolio, so you have all your USD investments in a sub-portfolio with USD Cash, and all your CAD investments in a sub with CAD cash. If you transfer cash, record both the buy/sell yourself, you wouldn't use a default cash account entry in this scenario.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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Posts: 11253
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Postby ThomasK » Thu Feb 25, 2016 11:34 am

Thanks Mark,

Okay, so I am just transferring CAD out from my CAD sub-portfolio and into my USD sub-portfolio.

Final Question: All I need to do is to make sure that the $CAD OUT and $USD IN match my brokerage, yes?

TK
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Postby Mark » Thu Feb 25, 2016 11:39 am

Hi ThomasK,

Yes, record a sell of CAD cash, with a price of 1 CAD and the shares equal to the value in CAD. Record a buy of USD cash with a price of 1 USD and the shares equal to the value in USD.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
Site Admin
 
Posts: 11253
Joined: Thu Oct 25, 2007 2:24 pm
Location: Chandler, AZ


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