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Can Portfolio Cost-Value graph include a cost basis line?

Questions on using, creating, or understanding data in Fund Manager graphs.

Postby bvzastrow » Fri Jan 15, 2021 5:52 am

Is there a way to display portfolio value, OOP cost AND cost basis on the same graph? I know the definition of (OOP) cost on this graph excludes reinvested dividends (out_of_pocket_investment = purchases - redemptions - received_distributions), but from a dividend performance perspective, I think it is useful to think of reinvested dividends as "cost" since if I didn't reinvest them, they wouldn't be in the portfolio.

The Portfolio Editor window is useful in this sense since it has a cost basis column, which includes reinvested dividends, and calculates unrealized gain/loss by subtracting cost basis from current value. So in my high dividend portfolio, I show a large positive yield (in the editor and the graph), but an actual unrealized loss (in the editor only). If the Portfolio Cost-Value graph could include a cost basis line, it would be a nice visualization of the effect of reinvested dividends on the portfolio. Thanks.
bvzastrow
 
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Joined: Mon Nov 11, 2019 2:36 pm

Postby Mark » Fri Jan 15, 2021 8:50 am

Hi bvzastrow,

Fund Manager calculates 2 types of cost: Out Of Pocket and Tax. The Tax cost can use FIFO, AVG, or Specific Lot. Sorry, but the graphs only display OOP cost, there are no options for displaying your tax cost basis on a graph.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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Posts: 9972
Joined: Thu Oct 25, 2007 2:24 pm
Location: Chandler, AZ

Postby bvzastrow » Sat Jan 16, 2021 3:14 pm

Thanks, Mark. May I ask that such a Tax Cost graph line option be considered for this graph for a future upgrade? The number already exists (as it is tracked in the portfolio editor window), so it just means adding it to the graph. It would be very useful for me.

Are there any graphs that use Tax Cost?

It sounds like OOP cost is a common way of tracking the amount of an investment. But from an accounting perspective I don't like it because it seems to be mixing a balance sheet account (cost basis) with an income statement transaction (dividends received). I found it odd when I read in the online documentation (https://www.fundmanagersoftware.com/hel ... stval.html) that OOP cost can actually go negative if dividends received exceed original investment amount. I understand this concept from an "out-of-pocket" perspective, but it doesn't seem useful from a performance perspective. It's like if you had a rental property and you kept subtracting rents received from the amount you paid for the building. It seems hard to measure performance of a dividend producing portfolio if your OOP cost keeps declining. It seems that if OOP cost is reduced by dividends withdrawn, it should also increase with dividends reinvested.
bvzastrow
 
Posts: 10
Joined: Mon Nov 11, 2019 2:36 pm

Postby Mark » Sun Jan 17, 2021 10:55 am

Hi bvzastrow,

Sure, we can consider this for a future update. Thanks for the feedback/idea.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
Site Admin
 
Posts: 9972
Joined: Thu Oct 25, 2007 2:24 pm
Location: Chandler, AZ


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