Wm via gnucash-devel schreef op 13-02-18 om 17:10:
On 13/02/2018 09:12, Alen Siljak wrote:

- we enter the investments we own, i.e. Stocks Fund, Bonds Fund, Direct Bond, favorite company ABC stock, etc.
- we link the investments (by symbol) to the allocation classes above.
   Stocks Fund => stocks
   Bonds Fund => bonds
   Direct Bond => bonds
   ABC => stocks
- we get the latest prices

That's looking self referential to me as your plan allows for a 1.75% government bond to be called a stock and a stock to be called a bond.

all a bit pointless.

All that computer software needs to do (and, deep into 21st century this is the least I'd expect my personal finance app to do) is to calculate the current value of the holdings, therefore asset classes, and say: "you have 50K in investments, out of which 30% is in stocks and 70% in bonds, while your allocation is 10%/90%".

Isn't that just back referencing ?

I own a dog, I check my dog ownership and find I own a dog.

Neither I or the dog should be surprised.

Not really, because the value of the portfolio assets (and therefore the value of the different asset classes) change over time.

Say my target asset allocation is 10%/90% (as above) and that is the ratio in which I divide the amount I use buying my assets (say $100). However, I don't own $90 of stocks, but rather 2 stock units priced at $45. The same for my bond assets (e.g. half a bond currently priced at $20).

Over time the prices of the underlying assets in my portfolio change.
For instance, during recession and with quantitative easing in place, bond prices climbed while equity prices dropped. So now my 2 stock units are only worth $60 total, while my bond category assets climbed to $30. All that Alen is saying that he wants a report which compares my target ratio of 10/90 with my current value ratio of 33/67, as this may lead to a rebalancing of the portfolio.

-- Mark
gnucash-devel mailing list

Reply via email to