How Much Detail?

Before you get started setting up your portfolio account, you need to decide how much investment history to include in your records. You have three options: enter a complete history, just this year's information, or your current investment holdings.

Of the three options, the complete history requires the most data entry, because you'll need to enter the initial purchase price for each security and all of the subsequent transactions. The benefit of this approach is that all of your reports are complete and Quicken can accurately calculate capital gains and losses. Because a large portion of the benefit of tracking your investments in Quicken is knowing how much money you have made or lost, this is the approach that I recommend.

If you have a financial institution that allows you to download information over the Internet directly into Quicken, much of your data entry will be eliminated. I highly recommend this. You'll know that your financial institution can download into Quicken because the name of the financial institution will appear during Quicken Account Setup.

Here are the pros and cons of the two methods of portfolio setup that I do not recommend. If you decide to enter just the current year's data, you'll enter the investment balances as of the end of last year and then enter all of the transactions for each security since the beginning of this year. The good thing about this method is that the information you need to find and enter is more recent and probably easier for you to obtain. Reports that deal with events from this year will be accurate, and if you sell a security, Quicken will be able to track which lots of the security you should sell to minimize or maximize your short- term capital gains. The downside of this method is that Quicken will not know the original cost of the security (called the cost basis ), so you can't get accurate long-term capital gains or realized gain reports.

If you decide to enter just your current investment holdings, it will take the least amount of time, because all you have to do is enter information from your latest investment statement. The significant drawback is that data for this year and past years will be incomplete, and you won't be able to get reports for capital gains or realized gains.