Local Securities

eZine lover (@eZine)

Published in 

Capital Gainz

 · 23 Jul 2023

Chapter 8 - Local Securities

[[Screen not in online version of documentation.]]

The Local Security Table, brought up from the Main Menu, shows information for each local security in the current portfolio, with securities listed in alphabetical order by symbol. For a detailed discussion of the relation between local and global securities, refer to Chapter 2. The values displayed for each local security:

• The local security Symbol.
• Global security name, plus (IRA) if you specified that the local security was held in an IRA or other tax deferred program.
• Last Price and last price date.
• Current number of open Shares.
• Current Yield.
• Average Price paid for the open shares.
• Cost of the open shares.
• Current Value of the open shares.
• Current open share Gain/Loss amount and percentage.

Also, portfolio totals are displayed at the bottom of the screen for:

• Total Value of open shares for all securities.
• Total Gain/Loss amount and percentage for all securities.

The Current Yield, Average Price, Value, and Gain/Loss calculations are discussed in detail in Chapter 20. You may see a discrepancy between the open value and gain/loss figures in the Local Security Table and the Open Shares Log or Open Shares Detail Report. The Local Security Table multiplies the cumulative number of shares by the current price to get the total open value. However, the Open Shares Log and the Open Shares Detail Report do a record by record calculation, rounding each record's open value.

At the bottom of the Local Security Table is a scrollable row of functions:

• Ctrl-F1:Function List - popup a list of functions to choose from.
• Ins:Add - add a security.
• Enter:Change - change the highlighted security.
• Del:Delete - delete the highlighted security.
• Esc:Exit - exit from the table, returning to the Main Menu.
• Ctrl-PgUp:Top - go to the first record.
• Ctrl-PgDn:Bottom - go to the last record.
• F2:Portfolio Detail Report - generate the Portfolio Detail Report.
• F3:Price History Table - view the price history table for the highlighted security.
• F4:Price Update - update the prices of all local securities in the portfolio, by entering the information from the screen or reading in a file.
• F5:Mixed Detail Report - generate the Mixed Detail Report for the highlighted security.
• F6:Activity Summary Report - generate the Activity Summary Report for the highlighted security.
• F7:Split Shares - execute a stock split for the highlighted security.
• F8:Portfolio Allocation Report - generate the Portfolio Allocation Report.
• F9:Fixup Security - bring up the Local Security Fixup Form for the highlighted security.
• F10:More - scroll the list of functions.

Each of these functions are described below.

8.1 Add a Local Security

[[Screen not in online version of documentation.]]

The Local Security Form is brought up to add a local security when you hit the Ins key while viewing the Local Security Table. The bottom half of the form displays information about the associated global security. The fields in the Local Security Form are:

• (Required) The Local Symbol for the security. This is a good, short-hand tag, and is used in most of the other forms and screens. In most cases, this will be the same as the related global security symbol.
• (Required) Link to Global Symbol, the global security symbol to link the local security with. For a discussion of the relationship between local and global security symbols, see Chapter 2. If you enter an invalid global symbol, or leave it blank, the Global Security Lookup Table pops up. This table is described below. After you enter a valid global symbol, or select one from the Global Security Lookup Table, the bottom half of the Local Security Form is filled in. Also, the broker/investment company and account number specified for the global security are used in the local security fields.
• (Required) The Broker/Investment Company responsible for selling and/or holding the shares. For stocks and bonds, this will be a broker or the actual company. For mutual funds, this will be the mutual fund investment company or a broker. This name provides a link to the Broker/Investment Company File, which contains addresses and phone numbers. If you leave this entry blank or enter an invalid name, the Broker/Investment Company Lookup Table pops up. This table is described below. Chapter 2 discusses how broker/investment companies are related to local and global securities.
• (Optional) Account Number. For stocks and bonds, this will be your brokerage account number or company dividend reinvestment plan number. For mutual funds, this will be your fund's account number or a brokerage account number. A discussion of how account numbers are related to local and global securities appears in Chapter 2.
• (Required) Sell Method. Entering a blank or invalid selling method causes the Sell Method Lookup Table to pop up. This table is described below. After you enter or select a selling method, the method's description is displayed.
• (Required) Tax Exempt status. If this security is held in an IRA, Keough, or pension plan, it's probably tax exempt. The Schedule B and D-1 Reports rely on this value, and skip any securities marked as tax exempt. The Security Table appends (IRA) to a security flagged as tax exempt. Note that a tax exempt security is different from a security whose dividends are tax free. Tax free status is built into the security type.
• (Required) Price Precision. This value tells Capital Gainz how many decimal places you use for prices when referring to this local security. This is important if you want accurate figures calculated on the Buy Shares Form and Sell Shares Form.
• (Required) Shares Precision. This value tells Capital Gainz how many decimal places you use for share fractions when referring to this local security. This is important if you want accurate figures calculated on the Buy Shares Form and Sell Shares Form.

Function keys at the bottom of the screen are:

• Form Accept - accept all entries, the same as hitting Enter on each field. This key is only displayed when changing records.
• Form Reject - exit immediately, the same as hitting Esc to back out of the form. This key is only displayed when adding or changing records.
• F2:Price Update - enter a date/price value for this security. This key is only displayed when changing records.
• F3:Modify Global Sec - bring up the Global Security Form to change values in the related global security. This key is only displayed when changing records.

After completing the form, the local security record is added. You return to the Local Security Table, and the just added local security is highlighted.

8.1.1 Global Security Lookup

[[Screen not in online version of documentation.]]

The Global Security Lookup Table is brought up automatically if you enter an invalid global security symbol. This table lists all of the previously entered global security Symbols and Names.

If you entered an invalid global security symbol, the cursor is positioned on the global security symbol that best matches the entered symbol. Function keys at the bottom of the screen are:

• Enter:Select - select the global security, inserting its symbol into the form's Link to Global Symbol field.
• Ins:Add - define a global security.
• F2:Change - change the highlighted global security.
• Del:Delete - delete the highlighted global security.
• Esc:Exit - exit from the table, without selecting a global security.

See Chapter 12 for details on adding, changing, and deleting global securities.

8.1.2 Broker/Investment Company Lookup

[[Screen not in online version of documentation.]]

The Broker/Investment Company Lookup Table is brought up automatically if you enter an invalid broker/investment company name. This table lists all of the previously entered broker/investment company Names.

If you entered an invalid broker/investment company, the cursor is positioned on the broker/investment company that best matches the entered name. Function keys at the bottom of the screen are:

• Enter:Select - select the highlighted broker/investment company, inserting its name into the form's Broker field.
• Ins:Add - define a new broker/investment company.
• F2:Change - change the highlighted broker/investment company.
• Del:Delete - delete the highlighted broker/investment company.
• Esc:Exit - exit from the table, without selecting a broker/investment company.

See Chapter 13 for details on adding, changing, and deleting broker/investment companies.

8.1.3 Selling Methods

The Sell Method Lookup Table, described in Chapter 7, is brought up automatically if you enter an invalid selling method. The sell method selected can be changed later, or a different sell method can be specified when shares of this security are actually sold. According to the IRS, once you sell any shares of a mutual fund using an average price method, you must continue using that average price selling method in the future. Capital Gainz returns a warning if you try to sell shares with a different method later. Even if you plan to use the average price selling method, it's a good idea to defer this selection until you actually sell shares.

Detailed information on each selling method is given in Chapter 21.

8.1.4 Price Update

Choosing the Price Update function key on the Local Security Form brings up the Price Form to record a price/date for the related global security. See Chapter 9 for details.

8.1.5 Modify Global Security

The Modify Global Security function key on the Local Security Form lets you bring up the Global Security Form, described in Chapter 12, to modify the associated global security. If you just want to change the global security symbol that the local security is linked to, use the Link to Global Security field.

8.1.6 Example - Add a Local Security

Say you create a local security:

        Local Symbol           :CPL 
        Linked to Global Symbol:CPL 
        Broker/Inv Co          :Wachovia Bank & Trust 
        Account Number         :12345-67890 
        Sell Method            :FIFO 
        Tax Exempt             :NO 
        Price Precision        :3 
        Shares Precision       :4

• The global security and broker/investment company were previously defined.
• The local security record is created.

8.2 Change a Local Security

The Local Security Form is brought up to change the highlighted local security when you hit the Enter key while viewing the Local Security Table. The Local Security Form, described earlier, is initialized to the current values of the local security to be changed.

===>>> After completing the form, the local security record is updated. If you changed the security's symbol, all of the security's open shares, closed shares, and distribution log records are also changed. Confirmation is required regardless of the Confirm Update global setting, since many records could be affected. On return to the Local Security Table, the new local security is highlighted.

8.2.1 Example - Change a Local Security

Using the previous example, say you change the Local Symbol to CP&L.

• The local security record is changed.
• All open shares records, closed shares records, and distribution records for this local security are updated to use the new Local Symbol.

8.3 Delete a Local Security

The Local Security Form is brought up to delete the highlighted local security when you hit the Del key while viewing the Local Security Table. The Local Security Form, described earlier, is initialized to the current values of the security to be deleted.

===>>> The local security record is deleted, as are all related activity records. Confirmation is required regardless of the Confirm Delete global setting, since many records could be affected. When you finish with the Local Security Form, you return to the Local Security Table, and the security after the one just deleted is highlighted.

8.3.1 Example - Delete a Local Security

Using the previous example, say you delete the local security CP&L.

• The local security record is deleted.
• All open shares records, closed shares records, and distribution records for this local security are deleted.

8.4 Portfolio Detail Report

The Portfolio Detail Report, similar in format to the Local Security Table, is available via a function key on the Local Security Table. See Chapter 15 for a description of this report.

8.5 Price History Table

Choosing the Price History Table function key from the Local Security Table brings up the Price History Table for the highlighted security, after prompting you for the date range. See Chapter 9 for a description of this table.

8.6 Price Update

Choosing the Price Update function key from the Local Security Table lets you update the prices of securities in the current portfolio by entering values from the screen or reading in a file. See Chapter 9 for information on updating prices.

8.7 Mixed Detail Report

Choosing the Mixed Detail Report function key from the Local Security Table generates the Mixed Detail Report for the highlighted security. See Chapter 15 for a description of this report.

8.8 Activity Summary Report

Choosing the Activity Summary Report function key from the Local Security Table generates the Activity Summary Report for the highlighted local security. See Chapter 15 for a description of this report.

8.9 Split Shares

[[Screen not in online version of documentation.]]

When a security you own declares a stock split, you need to record the split in Capital Gainz. The split is applied to all local securities, in all portfolios, that are linked to the associated global security. Stock splits can:

• Increase the number of shares, such as in a 2-for-1 split or a non- taxable stock dividend. For a 10% non-taxable stock dividend, you can declare a 1.1-for-1 split. Whenever you increase the number of shares, the basis price of the shares is decreased.
• Decrease the number of shares, such as in a 1-for-3 split. Whenever you decrease the number of shares, the basis price of the shares is increased.

To record a split, bring up the Stock Split Form for the highlighted local security on the Local Security Table by selecting the Split Shares function key. The fields on this form are:

• (Displayed) Global Symbol, the global security symbol to be split. This is derived from the local security selected.
• (Required) The Date of the split. After you enter the date, Capital Gainz searches the Price History File for recent splits. If you recently performed a split on this global security, Capital Gainz displays the date of the split and asks if you want to continue. If you answer NO, then you return to the Local Security Table.
• (Required) The Split Ratio, entered as VALUE1 for VALUE2. So, for a 2 for 1 split, enter 2 for VALUE1 and 1 for VALUE2.

You are always asked for confirmation at the end of the Stock Split Form, regardless of your global setting specifications. Function keys displayed at the bottom of the form are:

• Form Reject - exit immediately, the same as hitting Esc to back out of the form.

After you complete the Stock Split Form, a counter displays the progress. All open shares records and distribution records for affected local securities, and the price history records for the global security, are updated to reflect the split ratio. File data is actually being changed while this counter is displayed.

8.9.1 Split Ratio

You enter the stock split ratio in the Stock Split Form. Thus, if each share is split into two shares, the ratio is 2 For 1. The number of shares are multiplied by the ratio, while the price and per share values are divided by the ratio.

Reversing a split is simple: just split the shares with the inverse split ratio. So, if you performed a 2-for-1 split, to reverse it you'd perform a 1-for-2 split. However, because of rounding, the resulting values may not be exactly the same as the original values.

8.9.2 Example - Split Shares

Say you have the following open shares information for a local security:

     #    Date    Shares   Price  Amount   Open 
                  Bought                 Commission 
     1)  1/01/90  10.0000  4.9000  49.00   1.00 
     2)  2/01/90   9.0909  5.3900  49.00   1.00 
     3)  3/01/90  10.5263  4.6550  49.00   1.00

Also, you've recorded the following distributions:

     #    Date    Amount  Per Share  Type 
     1)  2/01/90   2.40     0.24     Dividend 
     2)  3/01/90   0.59     0.03     Long Term Capital Gain

You've generated the following price history records:

         Type    Date     Price   Per Share 
     1)  Price  1/01/90  4.9000 
     2)  Div    2/01/90             0.24 
     3)  Price  2/01/90  5.3900 
     4)  LTCG   3/01/90             0.03 
     5)  Price  3/01/90  4.6550

Then, recording a 2 for 1 stock split alters the records as follows.

Open shares records:

     #    Date    Shares   Price  Amount   Open 
                  Bought                 Commission 
     1)  1/01/90  20.0000  2.4500  49.00   1.00 
     2)  2/01/90  18.1818  2.6950  49.00   1.00 
     3)  3/01/90  21.0526  2.3275  49.00   1.00

Distribution records:

     #    Date    Amount  Per Share  Type 
     1)  2/01/90   2.40     0.120    Dividend 
     2)  3/01/90   0.59     0.015    Long Term Capital Gain

Price history records:

         Type    Date     Price   Per Share 
     1)  Price  1/01/90  2.4500 
     2)  Div    2/01/90             0.120 
     3)  Price  2/01/90  2.6950 
     4)  LTCG   3/01/90             0.015 
     5)  Price  3/01/90  2.3275

Closed shares records are not affected by a split.

8.10 Portfolio Allocation Report

Choosing the Portfolio Allocation Report function key from the Local Security Table generates the Portfolio Allocation Report for the current portfolio. See Chapter 15 for a description of this report.

8.11 Fixup Security

[[Screen not in online version of documentation.]]

===>>> The Local Security Fixup Form, available from the Fixup Security function key on the Local Security Table, allows you to modify the 'hidden' values for the highlighted local security record. If Capital Gainz terminates abnormally while adding, changing, or deleting records, the open share information stored in the security records may become out of sync with the actual values in the Open Shares File. The Consistency Check feature will show such discrepancies. If this happens, you can change the information in the security records using the Local Security Fixup Form. Individual activity log entries must be fixed manually prior to running fixup on the local security.

The Local Security Fixup Form accepts:

• Total Open Shares, Open Amount, and Open Commission.
• Short Term Open Shares, Open Amount, and Open Commission. These are only for securities that employ the double category selling method (no longer supported).

Function keys displayed at the bottom of the form are:

• Form Accept - accept all entries, the same as hitting Enter on each field.
• Form Reject - exit immediately, the same as hitting Esc to back out of the form.
• F2:Totals - let Capital Gainz calculate the totals by tracing the security's activity history.

8.11.1 Totals

Fixup usually requires the local security's values to be set to the totals in the Open Shares Log. If you select the Totals function key, these totals will be calculated and entered into the appropriate fields.

===>>> Totals are calculated by tracing purchases and sales from the beginning, similar to the way performance is calculated on the Activity Summary Report. Thus, totaling open share information should result in correct values for open amounts, regardless of the selling method used. Short term totals are not calculated.