Computing investment returns for your portolio-cash or proforma way?

[cashflo2u2]

Or both?
In other words, does one just use actual cash receipts of dividend and interest income received, or do a more lengthy exercise of looking up each individual security in the portfolio and ascertain what the payout has been using a third party, (e.g., go to Yahoo Finance click on historical prices and then click on dividends only) and apply that to the shares in your portfolio and come up with a proforma investment income profile?
Using the lengthy method has the benefit of putting everything in the portfolio on a spread sheet and seeing what it generated for the previous year (or whatever period) and then estimate for the coming year.
I did it both ways for 2008 and found it very enlightening and it had the side benefit of double checking the investment income receipts that were credited to me. In the long run the two should equal, but I am starting out this year (year one) and want to be consistent. Comparing each method it can have rather large timing differences especially year end special distributions declared in one year and received the next.

 

[LOL!]

What? You mean to ask: Do you double check that you got what was coming to you?

I just enter the transactions as they are reported on my statements. I deal with reputable firms, so I don't think they are ripping me off.

 

[kaneohe]

Might be easier to compare actual receipts w/ your tax documents.

 

[W2R]

I just use the actual cash received in my computations. All of my dividends and LTCG go into my Vanguard MM account, and all of my investments are with Vanguard right now.

Every quarter I check the transactions and note those cash deposits into my MM account that are due to dividends from each of my funds. Then I enter the dividends for each mutual fund into my Excel spreadsheet and that is what I work with. In December I also get LTCG and I enter that as well. December's yields have been deposited well before the end of the month so no problems with receiving them the next year.

I have doublechecked Vanguard to make sure I am getting the stated amount per share, and that is always the case. I can't imagine that they would mess that one up. They also send a summary of yield (by fund) for the year, at the end of the year.

 

[cashflo2u2]

I guess I'm out in left field doing that. Of course the 1099's will be equal to the receipts on the statement. I don't think the brokerage is crooked but mistakes are made. Also, a dividend declared say 12/26 may not be received into your account until 1/2, and those are usually the bigger cap gain ones. So, I guess what people are saying is that whatever was actually received in the previous year is assumed to be the return for the current year. I guess it was a stupid question.

 

[W2R]

I guess I'm out in left field doing that. Of course the 1099's will be equal to the receipts on the statement. I don't think the brokerage is crooked but mistakes are made. Also, a dividend declared say 12/26 may not be received into your account until 1/2, and those are usually the bigger cap gain ones. So, I guess what people are saying is that whatever was actually received in the previous year is assumed to be the return for the current year. I guess it was a stupid question.

Nah, in my case all the dividends and capital gains for December, 2008 were actually *received* by 12/31/08 because it is just an internal Vanguard transfer. I have never had a dividend declared 12/26 arriving in January. I am not "saying that whatever was actually received in the previous year is assumed to be the return for the current year".

I don't have it sent to another institution. I would guess that is probably the problem you are having. I don't know how I would deal with that.

 

[kaneohe]

I guess I'm out in left field doing that. Of course the 1099's will be equal to the receipts on the statement. I don't think the brokerage is crooked but mistakes are made.

Don't feel too bad about this. Sometimes you learn stuff.....
e.g. if you have any international funds, foreign tax taken out will be included in your taxable dividends but you will not receive that as an actual cash flow. I learned that only by comparing cash flows w/ 1099s.

Some CDs only pay interest every 6 mos. Hard to say if any are missed unless you track them and hard to say if you are getting the promised yield unless you monitor. You also learn that sometimes you get interest starting the day of deposit or sometimes not until a biz day later (which might be 3 days later if depositing on a Friday before 3 day wkend) by tracking "short" months.

Are you also obsessive about balancing your checkbook like me? The reality is that 99.9% of the mistakes are mine but
once in a period of > 40 yrs, I did actually find a bank mistake.

Don't think I've ever routinely checked and calculated fund distributions from stated xxxxx $/ share
customized for my # of shares tho........too much work.........so you win the prize for that one.