Re: Cash/Money Markets Included in Return Measures

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Posted by Mark on February 27, 2007 at 13:28:08:

In Reply to: Re: Cash/Money Markets Included in Return Measures posted by SS on February 27, 2007 at 11:30:13:

: Mark wrote: "If you include an investment in a sub-portfolio, it will be included in the portfolio level returns, you can't exclude an investment, other than by removing it from that sub-portfolio."

: Mark,

: Well, that's the problem --the cash portion of the account seems to be computed as a regular investment, and so whenever money is deducted from that portion to be invested in a stock, it is incurred as a negative return. What to do?

Hi SS,

You are right that a cash account is treated just like any other investment for yield calculations.

However, deducting money from a cash account does not adversely affect the yield on that cash account. This is not the cause of your negative returns, unless you're withdrawing it at a price less than you paid, but all transactions should be happening at $1/share in a cash account. I would suggest figuring out the source of why your cash account has a large negative yield. Some possible causes would include:

- Selling at a lower price than you paid
- Negative distributions (Account fees for example)
- Closing price recorded lower than your purchase price

In a cash account, all your transactions and closing prices should be at $1, so the only way you can really get a negative yield is due to a negative distribution. Use the Data Register to look at your recorded data. If you cannot find it, you can email me this investment, and I'll take a look.

Thanks,
Mark
--
Fund Manager - Portfolio Management Software

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