[Kmymoney] How to change value of investments

[Jack]

[I realize this is pretty long, but I've reread it a few times, and  
hopefully it will help you understand how KMM handles investments, at  
least enough for your immediate needs.]

On 2014.12.08 14:08, Bill Gee wrote:
> Hello everyone - First post here.  I've been trying to get along with  
> KMyMoney for some months.  For checking and credit card accounts it  
> is working reasonably well.  However, I am totally unable to  
> understand how investment accounts work.  My frustration limit has  
> finally been reached, hence I am reaching out for some help.
Have you read the handbook section on investment accounts?  If not,  
please start with that.  If, once you have this sufficiently figured  
out, you have comments or suggestions on improving the handbook, send  
them (either to the list or to me).  We don't have any tutorials, but  
it would certainly be possible to create one or more.  Perhaps you can  
keep notes as you work your way through this, to create an outline of  
the information that seems to be missing or not obvious.

In parallel to Allan's message, the first thing to understand about  
investment accounts in KMyMoney is that you really need a pair of  
accounts.  The actual Investment Account holds the equities, or the  
investments themselves, in the form of stocks, bonds, or mutual  
funds.   Then, you need a Brokerage Account (which is generally a  
checking account.)  In KMyMoney, the investment account ONLY contains  
investments.  The brokerage account contains the cash used to buy the  
investments and the cash produced by dividends or interest.  Whenever  
you create a transaction in the investment account, if that transaction  
requires or produces cash, you must specify the account to use for that  
cash.  By default, that is the brokerage account associated with that  
investment account.  If your investment account is "My 401K account"   
then the default brokerage account is "My 401K account (Brokerage)".    
It is easiest to let KMM create that account when you add the  
investment account, but you can also add it later.  You can specify  
other accounts in investment transactions, but it is much easier if you  
just accept the default name.  You can also specify an unrelated  
checking account for those investment transactions that need one, but  
it is easiest to use the default brokerage account.

> Example:  I have a certificate of deposit with my credit union.   
> Every three months they pay a dividend back into the value of the  
> CD.  This is reported on my monthly statements.
I don't know if it is specific to the US, but for those who have not  
heard of it, a CD (certificate of deposit) is an investment instrument  
where you give the bank an amount of money for a specified period of  
time.  At the end of that time, they return that money plus a  
pre-specified amount of interest.  In some cases, they pay the interest  
on a routine basis, such as monthly or quarterly, either paying it back  
into your checking account or added it to the value of the CD.  If you  
withdraw the money before the end of the specified term, you pay a  
pre-specified penalty, which generally means you get much less or no  
interest.

A CD (certificate of deposit) is not really either a stock, bond, or  
mutual fund, but can be adequately modeled by one.  Assume you will buy  
a CD for which you pay $80.  Start by depositing at least $80 in the  
brokerage account.  Then create an "buy shares" transaction.  There are  
many ways of doing it, but I would suggest in this case, specifying 80  
shares at $1/share.  You can invent the name and symbol for the  
investment, as Allan suggests.

> How do I add this dividend to the investment account?
If the interest is adding to the value of the CD, then enter it as an  
"add shares" transaction, adding the number of shares based on  
$1/share.  If the interest is actually paid to your bank/checking  
account, enter it as an "interest" or "dividend" transaction, for the  
specified amount, and indicate the appropriate brokerage account.  The  
difference between interest and dividend doesn't really matter too  
much.  What could matter is the category you use.  However, how  
important that is depends on whether you will use KMM to help fill out  
your tax forms.  Since in the US, the IRS does distinguish interest  
from dividends, it helps if you use the category that will match how  
you have to claim it.  I believe that CD interest is interest, but I'm  
not certain.
> 
> I have been trying this method, which does not work.
> 
> 1) Open the account ledger.
For which account?
> 2) Create a new entry.
> 3) set Activity = Dividend
> 4) set Interest = Interest and put the amount paid in the field.
> 5) But there is no way to save this entry!  The Enter button remains  
> gray.
I suspect you didn't specify the brokerage account.  If you put your  
checking account here, it should work.  However, this won't be correct  
if the interest just increases the value of the CD.
> AERGHHHHHH!
> 
> I tried changing the Activity to Reinvestment Dividend.  When I do  
> that, it wants to call it one of Bond, Stock or Option.  This is none  
> of the above. Double Argh!
If the interest increases the value of the CD, then instead of "add  
shares" as I said above, you could use "reinvest dividend."  However,  
rather than specifying the amount, you specify the number of shares,  
sticking to $1/share.  This way, you do get to specify the category of  
interest in the appropriate field.
> 
> Is there a tutorial for dummies on this?
> 
> I have another investment account for a 401k.  Every time I save the  
> data file, KMyMoney says that there is an issue with the data.   
> Specifically, it has no opening price for the investment.  I cannot  
> figure out how to either enter the opening price or delete the  
> investment.
In KMyMoney, deleting things is often frustrating, as you can't delete  
something that is referred to by any other object in the file.  In this  
case, you probably have at least a "buy shares" transaction for that  
investment.  When you specifically enter a buy or sell shares  
transaction, you enter the price per share on that day.  However,  
sometimes KMyMoney thinks that the investment existed before your first  
purchase, and it wants to know the price on or before that creation  
date.  There are many paths to the dialog for that, but you can use the  
"Tools/Prices" menu item.  That will bring up a dialog listing all the  
investments it knows about.  Type the name you used for the stock in  
the search box, and check the "Show all stored prices" box at the  
bottom.  You should then see at least one price - probably for the  
purchase of the stock.  Click on that price, then click the "New"  
button.  You will then get a dialog where you can specify the price on  
or before the date from the error message.  You can either find the  
real price for that date, or just use the initial purchase price.
> 
> I use KMyMoney version 4.6.6 on 64-bit Fedora 20.  This is the latest  
> RPM from
> the Fedora repositories, and NO, I am not going to compile from  
> source to get
> a later version.
In this case, you shouldn't need to do that, since you haven't run into  
any bugs, just some obscure terminology, perhaps.
> 
> Thanks - Bill Gee

I've been using KMM for over five years, and I still run into cases  
where things are not quite obvious.  KMyMoney does many things behind  
the scenes which may not initially make sense, but they almost always  
do, once you understand what it is doing.  I do most of the work on the  
handbook - so if you come up with any specific examples of missing,  
misleading, or just unclear instructions or explanations, please let me  
know.

I'd be happy to create a set of HowTo's or Tutorials, but since I use  
most of KMM without having to think about it now, I find it very hard  
to think of what really does need to be explained first, without adding  
unnecessary complications.  That's why I suggested you keep notes as  
you work thorough this and figure out how to make KMM work for you.

Jack