[Kmymoney] dealing with investment accounts

[Jack]

On 2013.05.22 11:49, Gary Kirkpatrick wrote:
> How do I deal with an investment account that is called a Cash  
> Management Account?   When I set it up online the institution called  
> it an investment acct but since I have never figured out how to  
> reconcile them and since we use it for cash so I told KMM it was a  
> cash account.  But we did transfer some bonds from the other  
> account.  So can I just do this off the cuff and make up a  
> transaction for the bond bit or do I need to set up an investment  
> acct?  If so, do I then need a brokerage account?   Eesh!
> 
> In any case  I do need to learn how to reconcile investment accts.   
> Is there some document that you'd suggest to guide me?
Gary,

I think there are a few separate, but related issues here.  I have  
exactly the same issue, and there is no good solution right now.

First, the problem is not the name of the account.  "Cash Management  
Account" is a name invented by the institution.  I have a CMA with  
Merrill Lynch, and as you seem to have discovered, the basic issue is  
that they have a single account for both cash and investments, where  
KMM uses an investment account (securities only) and a separate, but  
linked "brokerage" account for the cash portion (although it can be  
defined as cash, checking, or savings.)  I suspect part of the reason  
KMM does it this way is historical - investment transactions and cash  
transactions are so different that it may have been the developers'  
decision to track them in separate type accounts.

One possible (theoretical) solution to allow using a single account (it  
would be an investment account) would be to create a "cash" security,  
with a value of 1 in whatever currency you use.  I call it theoretical,  
because, for example, a stock purchase transaction requires the cash  
come from the brokerage account associated with the investment account,  
and although you could sell an appropriate amount of the "case"  
security at the same time, it would still be two separate investment  
transactions.  In addition, I'm pretty sure it still wouldn't match the  
transactions you download from the institution.

Regarding reconciling an investment account in KMM, this is something  
I've been meaning to bring up for a long time.  I don't know the  
history, but I suspect that reconciliation was invented for bank and/or  
credit card accounts.  Although you can perform the procedure on an  
investment account (I actually do it on a regular basis) it only takes  
into account cash transactions, and always shows the balance as $0.  In  
addition, it does not change the status of investment transactions, so  
I still need to do that (cleared -> reconciled) manually.  The only  
real thing it does for me is  to place the "last reconciliation" banner  
in the ledger.  In my case, I do a reconciliation only after confirming  
the number of shares for all securities in the account - and I'm not  
sure there is a way to get that information through OFX, although I  
admit I have not checked the OFX specs.

Final issue - when I download OFX transactions for my CMA account (and  
exactly the same for my IRA, even though the name is different) the  
institution not only mixes investment and cash transactions, for  
dividend reinvestments, they use three transactions: one for dividend,  
one for purchase, and separate one for reinvestment.  For a while, I  
tried importing all those transactions and then doing manual editing  
and deletion  to clean things  up.  I now find it easier to just enter  
all the transactions manually.

One point to note: the csv importer may be able to handle the imports  
correctly.  I know the developer had been working on this, but I don't  
know how far he actually got.  If you are interested in pursuing this,  
he might be interested in seeing some example csv files from the  
institution.  The other option, although I'm not sure whether it would  
be worth the effort, is to create a pre-processor, that takes an OFX  
file from the institution, and separates it into a pair of files, one  
for the investment account, and one for the brokerage account.

Sorry to ramble, but, unfortunately, I do not see any easy solution for  
this issue.  Contrary opinions are welcome.

Jack