Re: 401(k)'s

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In Reply to: 401(k)'s posted by Bob Organ on September 22, 1999 at 12:08:51:

: One of your earlier responses said for tracking 401(k) accounts that if you don't know number of shares, you can use a constant $1.00 share price then use buy/sells to adjust value over time.

: That makes sense for accounts you are actively adding to, in order to increase the number of shares. However, it seems like that method won't show you return information b/c you will always have a cost = value.

: If you want to value the portfolio at certain times (esp in accounts that you no longer contribute to), it seems like you could treat the change in valuation as a dividend (either + or -). Will this cause problems in the future. A test case seemed to work for a year, but might something come up that will turn out to be a headache.

: Thanks.

Hello,
This will work fine, and you will still have your constant $1 share price.
When you know that you have made or lost money, you can adjust the number
of shares owned (still keeping the $1 share price) using a reinvested
distribution.

Thanks,
Mark
--
Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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