[GNC] Why does the sample "investments" account tree have intermediate "Bond", "Mutual Fund", and "Stock" accounts?
devaps at asia.com
devaps at asia.com
Sun Aug 14 02:02:45 EDT 2022
Jim,
The default account hierarchy that’s provided when you choose investment accounts is just that. You can choose to have it per your tracking requirements.
Like you, my parent brokerage account is a placeholder and I have a $Cash account under that which acts as a staging account for buys and sells. The default hierarchy is giving you all possible types of investments one usually has in a brokerage account. So my modified hierarchy looks like this -
Assets
..Investments
….Brokerage account
…..Stock
…...$Cash
…….ISIN 1
…….ISIN 2 and so on
….Mutual Fund
……Fund 1
……Fund 2 and so on
ETFs are technically mutual funds, but since they trade like stocks, I track them under stocks instead of mutual funds. From what I can tell, there’s no difference between account type stock and mutual fund. Perhaps they exist as two separate types to allow for different treatment in the future, if need arises.
If you have bonds as well as stocks in your brokerage account, then you can move $Cash under brokerage account.
I don’t invest in mutual funds through my brokerage account. I keep that just for stocks and ETFs. My mutual fund investments are done directly with the fund companies, so the structure I have makes the selection of accounts in report options easier. I can just select the parent placeholder Mutual Fund and say select all children to run a report on just mutual funds.
So yes, there’s no harm in having AMZN directly under brokerage and use a $Cash account for staging purposes. I also don’t like to include transactions in parent accounts, so they are all placeholders for me like you described. This works well for me.
Cheers,
Deva
<====================================>
From: Jim DeLaHunt <list+gnucash at jdlh.com>
To: Gnucash Users <gnucash-user at gnucash.org>
Subject: [GNC] Why does the sample "investments" account tree have
intermediate "Bond", "Mutual Fund", and "Stock" accounts?
Message-ID: <009a32e9-b8bd-1547-cbec-0320661f1c10 at jdlh.com>
Content-Type: text/plain; charset=UTF-8; format=flowed
Hello, folks:
I have been using GnuCash for a long time, starting with the GnuCash
template account tree and modifying it gradually, but never thinking
hard about it. Until now. I am adding a bunch of investment accounts.
This makes me look more closely at the template account structure
depicted in
<https://www.gnucash.org/docs/v4/C/gnucash-guide/invest-setup1.html>.
This structure is:
* Assets
o Investments
+ Brokerage account
# Bond
# Mutual Fund
# Stock
* AMZN
What is the reason for the template inserting the layer of subaccounts
between "Brokerage account" and "AMZN" (for Amazon.com stock)? Why
shouldn't the child accounts denominated in each security be directly
under the "Brokerage account" account (as long as the parent account is
denominated in the currency which the securities are priced in)?
For my own purposes, it seems simpler to me to have the per-security
child accounts be directly under the "Brokerage account". Is there a
rationale for the intermediate accounts which I am missing?
Also, in the template, the "Brokerage account" is of type "Bank", and is
not a placeholder. That seems to imply that cash and cash-equivalent
transactions should be applied directly to "Brokerage account". Somehow
I ended up making a child account "Cash CAD" (or "Cash USD", or
whichever), and applying all the cash-equivalent transactiosn there. My
equivalent of "Brokerage account" has no transactions, and is often a
placeholder account, and has account type "Asset" rather than "Bank".??
Is there a reason to put the cash transactions directly in the brokerage
account, or is this a matter of personal preference? (In which case, I
will keep the structure I have.)
Thank you in advance for your insight,
???? ?Jim DeLaHunt
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