Advanced report rate of return

[John Ralls]

On May 13, 2013, at 1:28 PM, Stefano M Canta <cantastefano at gmail.com> wrote:

> I agree with what you are saying, and this is the way I am accounting for my stocks.
> What is misleading is the return rate. The money I invest is 3000 USD, and not 6000 USD.
> I would like to have this option for my own accounting, to know for example that in my Vanguard account I transferred 3000 USD and made 100 USD, even if I rebalanced some stocks within Vanguard itself. There should be an option to compute the total money in column as the money going into the brokerage, instead as the sum of the money going into each single stock account.
> Suppose I do 4 transfers a year within the same brokerage from 3000 USD without involving any other outer assets. My total money in column would be 12000, which lowers my rate of return incorrectly.

OK, so it's Vanguard and I guess it's mutual funds with the option to change the investment from one fund to another with no
trading cost. (A little investment advice: Bouncing from fund to fund like that seldom produces better returns than just sitting
in one fund and letting the manager do his thing, or better yet just sitting in a broad-market index fund.) That doesn't matter.
Every time you change funds it's a sell-buy transaction. The Advanced Portfolio Report doesn't understand anything else. Yes, if 
it's in an IRA you can just track the net gain, but even that works best if you account for it correctly rather than trying to do
transfers between fund accounts and accumulate the gains in an income account. I use Income:Non-taxable:CapGain. I 
don't close my books, but if I did I'd exclude that account to keep it from getting flushed to Equity.

Regards,
John Ralls