how does your brokerage display your holdings' gain?

davidrmoran

Dummy that I am sometimes, I just realized (meaning it specifically dawned on me) that Merrill's 'unrealized gain / loss' column for a given fund (or anything else) takes as its cost basis the total including divs / repurchases etc.

It shows this info every time, at high level, but for those of us asleep can be misleading for checking and tracking for timing of when to sell, or tax projections, at least for someone not paying proper attention, uh.

You have to drill down a little to get to 'total client investment', which is your original purchase cost, the money you initially put in.

Which gives you their 'cumulative investment return column' data.

Perhaps this is a more exact or precise way to do it, but it's not quite how it's done by other brokerages which I am familiar with.

DavidV

Fidelity does the same for cash accounts, that probably makes sense for tax purposes. But for tax sheltered accounts cost basis is zero for reinvested dividends and cap gains. TDA shows everything as for cash accounts.

VintageFreak

There is a reason I enter every trade in quicken manually. Tedious, but I have learnt it is best to keep good records. E*Trade and Ameritrade stunk to high heaven which is why I learnt to do this.

davidrmoran

tnx for these data.

I myself just want (always) to see what I am used to from the $10k-growth charts. I put in $10k and what happens. I pay taxes every bloody year on cg / div reinvested when the accounts are taxable, so I know that part. With tax-deferred it's easy, and w Roth it's easier yet. Fido makes it simple, or so I say now, but I had better recheck their accounting since I misunderstood ML's to some extent.

BenWP

Both TDA and Schwab report gain as if all distributions were part of cost. This causes severe under reporting of gain, especially for funds that make monthly or quarterly distributions. I compute my total return by breaking out original cost of purchases compared to current market value. I reinvest everything, so those who take distributions in cash would have a different return from me.

AndyJ

What Fidelity and apparently other brokerages report is cost basis as in that used for figuring capital gains, for tax purposes. The distributions are taxed themselves, separately, as income or cap gains as appropriate, so the "re"investment of them is essentially a new investment that adds to cost for tax purposes.

I keep a spreadsheet that includes just the non-reinvested amounts to see what my total return is, separate from the tax-related calculation.

I did ask Fido some time back to stop adding reinvested distributions into cost for my IRA investments, and the CSR sounded very surprised that someone would ask that, but they did it.

davidrmoran

Interesting. I am chiefly interested in display, column wording, and my quickness (haha) of visual understanding. I have always got what Fido was showing me, and the opposite w ML, I never quite got what they were showing me. (My duh.) A nomenclature issue ultimately.
It matters only when you want to be present the day that something comes back to cost or a bit above and you want to bail that day and were waiting for that day.

msf

If you're interested in performance (as opposed to capital appreciation, i.e. unrealized gain), Fidelity provides a performance tab on the portfolio positions page. That gives you your rate of return based on how much you put in. At least I assume so, based on the fact that my CMA account there shows a positive (albeit minuscule) return that wouldn't be there if it were counting all the interest reinvestments as costs.

I'm with VF on keeping one's own records (a spreadsheet works fine for me). When I want to sell on a day that something drops down to my cost, I can look at the cost for each share and pick out the ones (highest cost) that I want to dump.

Pedantic note: "cash account" often means non-margin account. I think the term you're looking for here is "taxable account" as opposed to a "tax advantaged" or "tax sheltered" account, such as an IRA.

davidrmoran

I like the way Fido does it, as I said, and was thrown by ML. Also, I use a software program to do my taxes, which draws in all of this stuff automatically, very handy and less laborious, so have not kept my own records for decades. Anyway, live and learn; I shoulda puzzled out the ML thing on my own before now.

slick

@Davidmoran. I recently left ML where I had a managed account and went back to Fidelity after 4 years with ML. Oddly, the way Merrill did it is much more accurate. If you go into history of purchases, they show cap gains and dividends as having a zero cost so the return is accurate. When my accounts were transferred last week, Fido showed reinvested cost on some of my holdings total return cut in half in some cases. I will be working with the account manager at Fido to do the corrections since I have all the data. Like you, I use total return to see if I should shave profits or how much profit I have from my original investment. One of the reasons I left ML is when I had my advisor try and sell specific lots that had the most profit, ML used FIFO regardless of instructions. They did this numerous times. Fidelity let's you choose the lots and they execute as instructed.

davidrmoran

What an interesting story. Thanks. That fifo override thing is wild.

I do not use an adviser anywhere.

I like ML a lot and like Fido a lot. I was just pretty duh about what I was seeing in the columns without drilldown, and I even posted here about how lamely I was doing w PDI from having skipped the initial reinvestment.

ML is also trying to catch up and compete with all of the others. Their yodlee aggregator thing (My Financial Picture), which I find extremely handy in retirement, is MUCH more up to date and supple and hence accurate, compared w Fido's identical FullView. Also more reliable in its intercourse w other institutions.

The Fido people I complained to about FV asked me to send screenshots of discrepancies, as where it shows a Fido account w one total and right next to it is the actual account with the more recent total. I did this several times and eventually they said, Oh, yeah, right, there is a lag in the updating, sure, we knew that.

ML's MFP is up-to-date.

I also pay no commissions at ML for any etfs, not the case at all at Fido.

msf

I'm really not clear on what people are looking for. Let me give an example of a hypothetical investment and ask what figure you're looking for and what help that would give you. The figures are real, only the trades are hypothetical.

3/6/2009 buy FLPSX 1,000 shares @$18.15 for $18,150.00
9/11/2009 reinvest 6.720 shares @$30.21 with   $203.00 in dividends
4/23/2009 sell   495.360 shares @$36.64 for $18,150.00 (cash out orig investment)

4/23/2009 hold 511.360 shares @$36.64 worth $18,736.23
4/29/2009 hold 511.360 shares @$36.06 worth $18,439.64

What are you looking at? Net cost of $0 (purchases minus redemptions)? Appreciation of individual shares (how to you figure the appreciation on the shares purchased 9/11/09)? IRR? Cost basis?

Whatever you're looking at, how do you use that figure?

davidrmoran

see below for ML daily display
gah, bad formating, sorry

Symbol
Description
Quantity
Price
Day's Price
$ Chg% Chg
Value
Day's Value
Change $
Unrealized Gain/Loss
$ Chg % Chg

PDI
PIMCO DYNAMIC INCOME FD
4,341.6510 $29.05 -$0.23-0.79% $126,124.96 -$998.58 -$9,171.27 -6.78%

+++

You have to drill down nonintuitively to see the data labeled Total Client Investment which probably should have 'initial' added to it or something.

I have not had to do that with other brokerages I have used.

msf

What I have with Merrill Edge is more limited - I just bought once and am holding forever, almost literally. I see the data items you described (Symbol, Description, etc.). But when I open the line for more detail ("drill down"), what I see is just my single acquisition and lots of reinvestments.

I'm guessing that what you see as Total Client Investment (that I don't see) is the sum of all the lines in the acquisition section (i.e. it ignores the reinvestments).

How are sales counted? Is this total investment gross, or does it subtract off your sales? Which do you want it to say?

ISTM both gross and net investment figures have problems. If you're seeing (or want to see) net, then as I showed in the example above, that could be zero, or even negative, even though the position still has value. If you're seeing (or want to see) gross, then you'll be seeing a lot of money invested even after you've liquidated your position.

So long as you don't have sales, none of this matters. Computing rate of return is easy and what total investment means is clear.

davidrmoran

Their c/s told me to go to Accounts, Holdings, Unrealized Gain / Loss, and then scroll right ... and then you can see the new columns Cumul Inv Return x 2 and Total Client Investment, which must be the initial amount you put in. See if you can do that. 'Drill down' was not very helpful, sorry.
It was this that surprised me and spurred me to whine about how I had missed it and misunderstood it.
Their feed to TurboTax is done right, like everyone else's.

[Deleted User]

The user and all related content has been deleted.

msf

Somehow I'd missed that the screen scrolls to the right. Okay, I see Total Client Investment, but as I speculated, all it reports for me is my single initial investment (ignoring dividends), since I've made no more purchases or sales. I don't know what it's going to report if one sells any shares (i.e. will it reduce the total client investment?)

If one cares about tax projections (one of the items to track that you gave in your initial post), then one would be looking at the cost basis column, or equivalently the unrealized gain/loss column. Same whether at Merrill or anywhere else. Just as Maurice said.

Merrill's total client investment gives a clue to one's rate of return, but really only if there's been just one initial investment. If there have been more purchases, or sales, or dividends not reinvested, then one can't infer a rate of return from that total (however it's computed). That's because timing matters for IRR.

Some brokers (like Fidelity on its performance tabs) provide rate of return info. I believe that if they're doing it correctly, they're not adding the cost of reinvested dividends but are subtracting the unreinvested dividends since you're taking money out.

davidrmoran

Exactly.

I do have some, perhaps many, holdings where there has been just the one initial investment, and I like to be see more quickly and easily how it has done in toto. I sense that many here are like that.

Concur in the Fidelity take.