is currently the most sophisticated free website for monitoring a portfolio of stocks. It has mechanisms to track buying and selling shares, and also shorting and buying to cover. Yahoo Finance also help you track cash transactions in your brokerage account: cash in and out, interest income and margin interest.
However, Yahoo Finance doesn't automatically handle all the events that can happen to your holdings. Following are some thoughts about handling splits, dividends and return of capital.
Splits
For a definition of stock splits see this entry on the
Investopedia. These are fairly easy to deal with: simply create a "Shares In" transaction for the date of the split (click the Transactions tab when viewing your portfolio, then the Create Transaction link on the right of the page). For a 2:1 split, enter the amount of shares you already own to double that amount, for a 3:1 split enter twice the amount you already own... This will not affect your cash balance. For a
reverse split, use a "Shares Out" transaction instead.
I don't understand why Yahoo Finance doesn't automatically adjust your holdings when splits occur as this data is certainly available on their website.
Dividends
Again, it seems like Yahoo Finance could offer to automatically handle dividends received as this information is publicly available. An option to specify whether or not to send dividends to the cash balance on a stock per stock basis would suffice, this could be turned off if one's dividends were automatically reinvested. To enter dividends manually as cash transactions is a solution, but seems too painful to be worthwhile.
Return of Capital
A return of capital is a little like a forced sell: the company takes back some of the shares you hold in return for cash. It seems the reliable way to handle this occurrence is as follows:
1. enter a "Shares Out" transaction for the shares lost; and
2. enter a "Cash In" transaction for the cash received.
One could also account for this as a sale of shares, but the above method allows entry of the exact amount of cash received from the company (rather than calculating a share price which the company may not have specified), and also reflects that there was no decision to actually sell shares at that time.
Conclusion
Yahoo Finance has provided tools that allow one to maintain an accurate record of a portfolio's performance, cash transactions. However, more automation would be welcome especially for dividend receipts.
