Mutual Funds Cap Gains or Dividend Reinvestment

[Aaron Gaudio]

On Wed, 2004-09-01 at 00:59 +0000, rwshep2000.3129421 at bloglines.com
wrote:
> I want to know if it is possible to get
> GnuCash to  show my reinvested cap gains/dividends as part of my ROI (gain).
>  Obviously, if a fund has capital gains and dividends, it is making a return
> on investment, and that is part of the "gain" that I need to track, preferably
> in the advanced portfolio report.

IMO, whether the cap gains/dividends are reinvested or not should be
irrelevant for an ROI calculation. The return is the cap gain/dividend
when it is distributed. Reinvestment is simply an immediate purchase of
more shares using that return. So, don't worry about reinvestments, the
ROI formula (for a single commodity) should be something like:

(CurrentValue+CashOut+CapGainsPaid+DividendsPaid)/CashIn-1.

(keep in mind that if the cap gain/dividend is reinvested, then it will
be counted in CashIn and CurrentValue).

-- 
Aaron Gaudio <prothonotar at tarnation.dyndns.org>