Microsoft KB Archive/176334

= How the Money Portfolio calculates Gain, Market Value, and Cost Basis =

Article ID: 176334

Article Last Modified on 1/22/2007

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APPLIES TO


 * Microsoft Money 2007 Deluxe
 * Microsoft Money 2007 Home & Business
 * Microsoft Money 2007 Premium
 * Microsoft Money 2006 Deluxe
 * Microsoft Money 2006 Premium
 * Microsoft Money 2006 Small Business
 * Microsoft Money 2006 Standard
 * Microsoft Money 2005 Deluxe Edition
 * Microsoft Money 2005 Premium Edition
 * Microsoft Money 2005 Small Business Edition
 * Microsoft Money 2004 Deluxe Edition
 * Microsoft Money 2004 Premium Edition
 * Microsoft Money 2004 Small Business Edition
 * Microsoft Money 2004 Standard Edition
 * MSN Money
 * MSN Money Plus

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This article was previously published under Q176334





SUMMARY
This article describes how MSN Money Portfolio calculates Gain, Market Value, and Cost Basis.



Percent Gain
Percent Gain can be expressed as the following:          Gain Gain % = -- Cost Basis

Gain
Gain is defined as: The profit or loss on a security or portfolio expressed in dollars; Equal to income plus price appreciation.

Income
Income is defined as: Interest, dividends, and capital gains distributions that you have received for an investment.

Price Appreciation
Price Appreciation is defined as: How much an investment has appreciated in price. It is computed as market value less cost basis. If "show sold securities" is enabled, it also includes realized gains.

Market Value
Market Value is defined as: The current value of an investment as indicated by the latest trade recorded.

Cost Basis
Cost Basis is defined as: The total cost of all shares of an investment. Note that this includes commissions and the cost of any reinvest transactions.

For example, if you bought $5,000 worth of Mutual Fund A (500 shares at $10 per share), and it has since paid a dividend of $500 that you have reinvested, you would use the following formula to calculate your gain percentage (assuming that the price is still $10 per share):

500 / 5500 = 9%

There are theoretical justifications for dividing by cost basis as MSN Money Investing does or by the original cost that does not include reinvestments. Neither one is right or wrong, and both methods can lead to unexpected results.

The annualized return column is a better way to assess your return. This method uses the internal rate of return calculation to infer the investment return.

For more information, click the following article number to view the article in the Microsoft Knowledge Base:

131664 How to calculate the annualized return in Money and in MSN Money Portfolio

Additional query words: MoneyCentral investor Inv % gain column

Keywords: kbinfo kbmoneyinvest KB176334

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