Monster Media 1994 #1/monster.zip/monster/FINANCE/VARIN59E.ZIP/VARINV.DOC

Text File | 1994-03-21 | 32KB | 472 lines

                                                _______
                                           ____|__     |               (R)
     This program is produced by a      --|       |    |-------------------
     member of the Association of         |   ____|__  |  Association of
     Shareware Professionals (ASP).       |  |       |_|  Shareware
     Please read their important message  |__|   o   |    Professionals
     at the end of this text.           -----|   |   |---------------------
                                             |___|___|    MEMBER

          This program will provide the tools you need to manage, and
     maximize the performance of, your investment portfolio.  It will help
     you determine current income, forecast future income, and perhaps most
     importantly, enable you to compare investment choices.  There are many
     different types of investments.  Consequently, there are varying
     methods, some more complicated than others, to assess their
     performance.  Some investments, such as CD's, have a fixed rate of
     return.  At the time of purchase, the annual interest rate is known,
     but the future value, total return, and the average annual compound
     rate of return usually are not.  This program can help determine these
     values.  First, determine the CD's future value by using the formula
     'F = P * ((1 + r) ^ t)', where F = Future Value, P = Principal, r =
     interest rate per unit of time, and t = time expressed in the units to
     which compounding applies.  '^' means 'take to the power of...'.  The
     program can then calculate returns using principal and future value.
          Determining investment returns becomes more difficult if the
     investment is complicated by multiple cash flows, especially if the
     cash flows occur at irregular intervals and/or involve variable dollar
     amounts.  Examples include stocks, bonds, mutual funds, annuities,
     401K plans, real estate, and partnerships.  This program will be
     invaluable in managing them and evaluating their performance.
          You can use a mouse with this program provided it is Microsoft
     compatible, and the correct driver has been loaded.  If the name of
     your mouse driver ends with '.sys', eg. 'Mouse.sys', you need to enter
     'Device = xxxxx.sys', where 'xxxxx.sys' is the name of your driver, in
     your 'Config.sys' file, and reboot, in order to use it.  If the name
     ends with '.com', eg. 'Mouse.com', you need to run it at the DOS
     prompt prior to running *this* program, to use it.  This program
     responds to the left mouse button.  The mouse can be used to pick menu
     options from the main menu, push buttons in dialog boxes, and pick
     specific files or transactions in the 'Open File', 'Change File', and
     'Change Transactions' dialog list boxes.  By clicking your mouse on
     the crosshatched bar at the top of dialog windows, you can drag them
     around on the screen.  When picking items from a list in the 'Open
     File', 'Change File', or 'Change Transactions' dialog boxes, you can
     click your mouse anywhere on the cross-hatched 'scroll bar' located in
     the right side of the window, and quickly move to any item in the
     list.  You can also click your mouse on the arrows at the top and
     bottom of the 'scroll bar' to move the cursor through the list one at
     a time.
          If you are using your keyboard rather than a mouse, you can
     navigate through the main menu by using the arrow, enter, and escape
     keys, and the quick access keys.  Quick access keys are highlighted on
     the menu bar and on the menus.  When exiting the program, rather than
     using the above keys, you can optionally press the shortcut key,
     'Ctrl-X' at the main menu.  You can use your arrow and tab keys to
     move your cursor around, and your enter key and spacebar to pick items
     and toggle buttons, in dialog boxes.
          The program requires the creation of a separate data file for
     each investment that you want to track.  You would probably not want
     to mix transactions from multiple investments into 1 file, because the
     program will recalculate the market value each time you enter a new
     share price.  Pick the option to open a file from the 'Files' menu.
     The program will list your current investment files, if any.  You may
     input a name (8 characters or less) or use the mouse or keyboard to
     pick an existing file.  I use the security's ticker symbol, 'TWCGX',
     for example, as the file name, but you can use anything you like.  You
     do not need to include a file extension.  The program will create all
     data files with the extension '.dat'.  If it is a new file, the
     program will ask you to input a 52 character description, such as
     '20th Century large growth mutual fund'.  The program will then return
     to the menu.
          Your next task is to input transactions in the investment.  You
     can input transactions in any order, but multiple transactions for a
     single date might be best input in chronological sequence.  Examples
     of transaction descriptions might be 'Purchase', 'Distrib',
     'Reinvest', 'Sale', 'Split', 'Svc Chg', and 'Year End'.  When you list
     the transactions later, the program will calculate statistics
     depending on the data that it finds in each record.  For this reason,
     the program can be defined as driven by record format, rather than
     cryptic transaction codes.  And, except for share splits (discussed
     below), the description that you input is for your use only.  All
     other data should be input as described below, and as prompted by the
     program.  The program will tell you if the transaction date you input
     is invalid, but does not check the validity of any other field.  This
     allows for the possibility of unusual, user-defined transaction types.
     Note: For those investments which do not have a specific share price
     or NAV (i.e. CD's), you should simply use a share price of $1.00.
          For purchases, input the dollar amount and share price.  For cash
     distributions (dividends and interest), input a negative amount only.
     For distributions that are automatically reinvested, input the share
     price and # of shares only.  For sales, input a negative amount, the
     new share price, and the # of shares sold.  For a share split, make
     sure the word 'split' appears in the transaction description; then
     input the new share price and your new share balance.  The inclusion
     of the word 'split' will make the program distinguish it from a
     dividend reinvestment, and it will restate your low, high, and average
     buy and sell prices.  For additional cost service fees, input a
     positive dollar amount only.  For service fees charged against your
     account, i.e. IRA maintenance fees, input a negative # of shares only.
     Service fees input either way will be included in your costs, and will
     affect returns, but will not be included in low, high, or average buy
     or sell prices.  Depending on how your broker or mutual fund handles
     service charges, this feature can also help you more easily balance to
     the 1099-B they send you at the end of the year.
          To gain maximum value from this program, you can enter special
     records that you can describe as 'Price Update', or 'Year End'
     records.  Just enter the date, and share price, say as of December 31
     of each year.  When the program lists your transactions, and it comes
     across a record that contains only the date and share price, it will
     calculate 3 types of returns you would have received had you
     liquidated the investment on that date.  'Per' denotes the total
     return for the period starting with the date of the previous record of
     this type, or from the beginning of the investment, if this is the
     first such record, and is calculated as 'r = (F - P) / P', where F =
     (current value + current cash dividends + current sales), and P =
     (value at the beginning of the period + current cash outlays).
     'Cumul' denotes the cumulative total return made since the beginning
     of the investment, and uses the same formula, but, in this case, F =
     (current value + total cash dividends + total sales), and P = total
     cash outlays.  'Avg Ann' denotes the approximate average annual total
     return you would have had to receive to achieve the same return, had
     you invested the money in one lump sum in an interest-paying account
     that was compounded annually.  This is calculated using the formula 'r
     = (F / P) ^ (1 / t) - 1'.  'F', and 'P' represent the same values as
     in the cumulative total return formula; 't' = (# of days the
     investment has been held / 365.25).  365.25 is used rather than 365 to
     make allowances for leap years.
          All financial and statistical calculations (except capital gains,
     see basis worksheet below), are performed when you pick the option to
     'List' your transactions.  This option will process the currently
     opened data file.  Another option, 'Combined IRR', will produce a
     consolidated IRR for *all* data files (see below).  The output is sent
     to your display, printer, or disk file.  Disk file output can be used
     by this program to create graphs (discussed below) and can be imported
     later into other applications, most notably, spreadsheets.  In a
     spreadsheet program, you can combine the data from several
     investments, and create your own custom reports on such things as
     basis, tax analysis, and income statements.  The output consists of
     the date, description, amount, share price, share balance, investment
     value, and the 3 types of returns explained in the preceding
     paragraph.  The optional export file includes an additional column,
     'Shares this transaction'.  Numeric fields in the disk records are
     parsed and delimited by commas; alphanumeric fields are parsed into 9
     character fields, and delimited by quotes and commas, for easy import
     into individual spreadsheet cells.  When you specify your output
     option, you can also input beginning and ending date masks.  Using
     date masks allows you to: 1) list a specific year's transactions to
     help with income tax returns, and 2) more accurately compare the
     returns of 2 investments by using a common date range.  The latter
     opens up the possibilities of comparing your investments with each
     other, mutual fund prospectuses, and market indices.  The use of
     market indices for this purpose is explained in detail below.  The
     program will display 'No transactions available' if no transactions
     occurred between the beginning and ending date masks.
          After listing the transactions, if the balance is not 0, and
     there is no ending date mask, the program will ask you to input the
     current share price.  It will then calculate your final returns as if
     you were to liquidate the same day, using the date stored in your PC.
          As a final step, the program prints profit and loss statistics.
     It should be noted that in this section 'Total purchases' = 'Out of
     pocket costs' plus reinvested dividends.  Next the program attempts to
     solve the 'internal rate of return', also known as the 'realized rate
     of return' of the investment.  This is an attempt to resolve to an
     annualized dollar-weighted rate of return, recognizing that some
     deposits have spent longer time in the investment than others.  It may
     take up to several seconds for your computer to make this calculation,
     depending on its make, whether it has a math coprocessor, and the
     number of transactions in the investment.  This part of the program is
     an adaptation of 'Program #5, Realized Rate of Return', written by
     Robert Osterlund, which appeared in the May 1985 issue of
     'Computerized Investing', published by the American Association of
     Individual Investors, 625 N. Michigan Ave., Chicago, Il.  60611-3110.
     It is used with their permission.  Remember these rules when
     considering the 'average annual return' and 'IRR': 1) The 'average
     annual return' will *only* match the 'IRR' *if* there was only one
     cash deposit, *and* either the entire amount was liquidated at once,
     or there were *no* withdrawals.  2) The more numerous or spread out
     the cash flows are, the larger the absolute value of the 'IRR' will
     be, relative to the absolute value of the 'average annual return'.  3)
     The absolute value of the 'average annual return' will never be larger
     than the absolute value of the 'IRR'.  4) Neither the 'average annual
     return' nor the 'IRR' will ever be smaller than -1.00, because you
     cannot lose more than you invested.  5) The final balance is treated
     as a withdrawal.
          As stated above, the 'List' option on the 'Transactions' menu
     will process the currently opened data file.  The 'Combined IRR'
     option on the same menu will process *all* data files, except the 3
     example files, and any investments not active between the beginning
     and ending date masks.  This will give you a consolidated IRR for your
     portfolio.  As each file is processed, if there is a current balance,
     and an ending date mask was not used, the program will ask you to
     enter it's current share price, as before.  Because this function
     processes data from *all* files, it will use proportionately more
     memory than other functions.  This could *conceivably* cause a problem
     in situations where there are a *very* large number of investments, or
     transactions, but most investors needn't worry.
          When you sell investment property, you need to report the amount
     of capital gain or loss realized on the sale on your income tax
     return.  This is determined by subtracting your basis in the shares or
     property from the sale proceeds.  There is an option under the
     'Transactions' menu to produce a 'Basis worksheet'.  The output from
     this option is only as accurate as the data that you input, and is
     intended to *assist* you in determining your basis, rather than to be
     used alone.  There are other variables that need to be considered in
     addition to the worksheet.  For instance, the program does not include
     undistributed capital gains or return of capital.  These have to be
     added to or subtracted from your basis manually.  If a record has a
     positive dollar amount and no share price, or a negative # of shares,
     the program will assume that it is a service fee, and print it for
     your convenience, but it also has to be adjusted manually for basis
     purposes.  You may also have to make adjustments for rounding errors
     (discussed later).  To find out more about determining basis, read IRS
     publications 550, 'Investment Income and Expenses', and 564, 'Mutual
     Fund Distributions'.  The calculations used in this program are based
     on those publications.  The output can be sent to your screen,
     printer, or disk.  The program will process all transactions, and list
     all service fees and splits, but will only list purchases and sales if
     their dates fall between the date masks.  The program gives you a
     choice of 5 basis methods.  'Cost, FIFO' treats cost as basis, and
     considers the earliest shares sold first.  'Cost, Dynamic' treats cost
     as basis, and considers the most expensive shares sold first.
     'Average, Single category' considers the earliest shares sold first
     using as basis the average price of all shares held at the time of
     sale.  'Average, Double category, FIFO' puts shares into 2 categories,
     'long term', and 'short term', and considers the oldest shares sold
     first, using the average price for shares in the corresponding
     category as basis.  'Average, Double category, Dynamic' also puts
     shares into 2 categories, but considers those shares in the category
     with the most expensive average price at the time of sale, as being
     sold first.  With this method, shares are disposed of FIFO within
     their categories.  Under the latter 2 methods, when a share is
     transferred from short term to long term, it takes with it its
     original cost if no short term shares have been sold, otherwise it
     takes the average cost of the short term shares at the time of the
     last disposition from the short term category.  You might notice
     sometimes, when using the average methods, that the amount of capital
     gain realized from a sale differs slightly from the amount determined
     by subtracting, from the sale proceeds, the amount(s) calculated by
     multiplying each lot sold by its average price.  This is caused by
     rounding, and happens when the last shares in a category are sold.
     The program will identify sales which have been adjusted for rounding
     by printing a '*' in the column labeled 'Round Adjust'.  After listing
     the transactions which affect capital gains, the program prints a
     summary showing such things as the remaining basis by lot, total
     remaining basis, average basis/share, and average basis/share by
     holding term.  You might notice, when using the average methods, that
     the total remaining basis sometimes differs by a few pennies from the
     amount calculated by summing the values of the remaining share lots.
     This discrepancy is caused by the fact that the average price of each
     remaining lot is rounded.  The total remaining basis is the correct
     figure.  Basis figures also sometimes differ by a few pennies if there
     has been a share split.
          You can create up to 12 different graphs (charts), using the
     'Graphs' option under the 'Transactions' menu.  After picking this
     option, the program will display a box containing the necessary
     parameters.  You can type one or more filenames, separated by commas,
     in the 'Input Files' fields (although the visible part of these fields
     is short, it will enlarge as you type).  The filenames you type are
     files created by the 'List' option under the same menu, *not* the
     investment files themselves.  For charting purposes, each input file
     should represent only *one* investment.  If you use a file which was
     created by 'Listing' *more* than one investment (using the 'Append'
     option), the results will be unpredictable and probably not useful.
     The program can plot multiple investments at your monitor's highest
     resolution; at lower resolutions, it can plot only one investment at a
     time.  Once the chart is displayed, you can press Shift-PrtSc to copy
     the chart to your printer.  If nothing happens, or the printout
     doesn't look correct, it means that you must run a graphics printer
     driver prior to running *this* program.  Most versions of DOS have a
     graphics printer driver, usually named 'Graphics.com'.  Special Notes:
     Before displaying charts, the program first attempts to find your
     display adapter's highest resolution.  If the program can't find it,
     it might display a message.  If this is the case, or for some other
     reason you would like to use a different screen resolution, you can
     override it with the '/G' command line switch (discussed below).
     Because Hercules (usually monochrome) high resolution is not usually
     directly supported by DOS BIOS ROMS, Hercules card users will have to
     run the included program, 'Msherc.com', prior to running *this*
     program, to display charts.  Also, the Shift-PrtSc key might not work
     for Hercules users.  If this is the case, instead press Ctrl-E for
     printers set up in Epson mode, or Ctrl-I for IBM mode.
          If you make a mistake when entering a transaction, or you want to
     play 'what if' scenarios by using different transactions or
     transaction sequences, you can pick the option to change transactions.
     Using mouse or keyboard, you can then pick the transaction you want to
     change, from the listing provided.  Once you have changed a record,
     press 'Enter', or, to rapidly change multiple records, you can press
     'PageUp' or 'PageDown' instead.  You can also delete the entire
     transaction.  The option to change investment files follows the same
     procedure.  If you pick the latter option, the program will allow you
     to change an investment file *description*, but *not* an investment
     file *name*.
          If you need more room on disk or in memory, or if the program
     seems to behave strangely when one of the data files is loaded, you
     can pick the option to rebuild data files.  This will pack your files
     by purging deleted records, and reset certain pointers within the
     files.  This can rescue a file if, for instance, your computer lost
     power during a write or delete operation in a previous session.  This
     can be run as often as you wish.
          Provided you are using a color monitor, you can pick the option
     on the menu to customize your screen colors.  After picking this
     option, the bottom portion of the screen shows all available
     background and foreground colors, along with their corresponding
     numeric codes.  The top portion of the screen shows each attribute,
     and their current values.  To change an attribute, pick the number to
     its left, then input the new color value.  Type 'S' when finished, to
     (S)ave the current configuration to disk, so that the program will
     start up in the future with these colors.  When finished changing your
     screen colors, press <esc> to return to the main menu.
          You can press 'Carriage Return', or 'Enter' whenever an input
     prompt asks for '<cr>'.  To pause a listing, press 'Hold', or 'Break',
     or 'Scroll Lock', depending on your make of computer.  You may print a
     hard copy of the screen anytime the program is waiting for input, by
     pressing a shift key, and the 'PrtSc' key.  The program can track
     hundreds of active investments and transactions at one time, subject
     to available memory and disk capacity.  If this is a non-registered
     copy, you can rest assured that it is not crippled in any way; it has
     the same functionality as a registered version.  The maximum # of
     files opened by the program at any given time is 5, so you probably
     don't need to adjust your 'Files=' parameter in 'Config.sys'.  Even
     though dates are output in the form 'MMDDYY', dates are listed in
     order by, and stored on disk as 'YYYYMMDD'.  This will insure that
     calculations will be accurate across centuries, if necessary.  Because
     of space considerations, share prices and account balances up to
     999,999.99 print on screen and printer transaction listings *with*
     commas; values from 1,000,000 to 9,999,999.99 print *without* commas
     (eg. 1000000.00).  Transaction amounts and shares per transaction up
     to 99,999.99 print *with* commas, from 100,000 to 999,999.99,
     *without* commas.  If a *single* transaction exceeds 999,999.99 in
     shares or transaction amount, it should be entered as 2 transactions,
     otherwise printing will overflow to the next line.
          There are 3 command line switches you can use when starting this
     program.  If you use '/NS' (no sound, type 'Varinv /NS'), the program
     will suppress sound effects.  You can change the # of lines the
     program will use on the screen (provided your monitor and adapter
     support it), by typing 'Varinv /L XX', where 'XX' is the # of lines
     you want the program to use.  EGA adapters can use 43 lines, VGA
     adapters 43 or 50 lines.  The default is 25 lines.  Experiment to find
     the # of lines you like.  Sound state and the # of screen lines can
     also be set from the 'Miscellaneous' menu.  You can override the
     screen mode the program uses to display graphics (discussed above), by
     typing 'Varinv /G XX', where 'XX' is a screen mode from 1 to 13, with
     higher modes usually featuring higher resolution.
          I have included 2 special investment files, named 'DJ_30.dat'
     ('Dow Jones/30 Industrial Index'), and 'SP_500.dat' ('Standard & Poors
     500 Option Index').  These can be used as benchmarks against which you
     can compare your own investment returns.  As an example, suppose you
     have held a particular investment for 9 months.  You list your
     transactions and return data on your printer.  You can then open one
     of the market index files (or any one of your other files), and list
     *that* file, using the beginning and ending dates of the *first*
     investment as the date mask.  As stated above, this will allow you to
     more accurately compare 2 investments.  You enter data into a market
     index file just as you do your other investment files, but the only
     transactions you need to enter are purchases, price updates, and,
     optionally, dividends.  Data for over 100 indices is available from
     various sources, including Compuserve, and magazines.  I have included
     with this software a script file for use with Autosig which downloads
     price history for the above mentioned files, 'DJ_30.dat', and
     'SP_500.dat', and dividend history for 'SP_500.dat' into a file name
     'Prices.log'.  You can browse or print this file, and then manually
     input the data into the 2 investment files.  For each of these files I
     have input a purchase of 1 share at the (then) current share price,
     and many months of price history.  For 'SP_500.dat', I have also input
     reinvested dividends quarterly, using the formula 'Shares acquired =
     (Current dividend * Current # of shares) / Current share price'.  The
     script file can, of course, be modified to also download price history
     for any security of your choice, that is available from Compuserve.
          This product is not free, it is shareware.  You may use it free
     for a period of 30 days; to continue using it, you must register.  The
     registration fee is USD $15.00.  For your convenience, I have included
     an order form on the last page of this text.  On receipt of the fee, I
     will send you a copy of the latest version, and your registration
     number, which you will need to enter the next time you run the
     program.  Upon successfully entering the number, the program will ask
     for your name, and will replace the registration reminder line on the
     bottom of the main menu with it.  You will be entitled to receive one
     year of mail support, access to upgrades, and, as a bonus, through an
     agreement between The Association of Shareware Professionals and
     Compuserve, a free Compuserve Intropak which waives the normal sign-up
     charges, and includes a $15.00 usage credit.  There are no express or
     implied warranties.  The program's calculations are documented, so you
     can compare them initially with your own figures; then, using the
     program will quickly become intuitive.  I would be happy to discuss
     the possibility of additional custom programming with you.
     Non-registered users, please feel free to contact me by mail if you
     need help running the program, or to tell me your comments, and
     suggestions, and, in any event, thanks for trying the program!  Before
     contacting me, please first reread the instructions.  The 2 most
     common errors new users make are:  1) Inputting transaction data that
     isn't requested by the program.  The program requires very specific
     data in order to be able to distinguish the different transaction
     types.  Don't input transaction data that isn't requested.  2)
     Inputting dates as MMDDYY, instead of MMDDYYYY.  The program requires
     that years be input as 4 digits, not 2.  February 18, 1994, for
     instance, must be entered as '02181994', *not* '021894'.
          I encourage you to upload this product (demonstration version
     *only*) to bulletin boards that accept such products, and to make
     copies available to other potential users, provided that you not
     charge more than a nominal copying fee, and that you include the files
     'Varinv.exe', 'Varinv.dat', 'Example.dat', 'Varcvrt.exe',
     'Varinv.doc', 'Readme.doc', 'DJ_30.dat', 'SP_500.dat', 'Prices.scr',
     'Register.doc', 'Sharewar.doc', 'Vend&Sys.doc', 'Msherc.com', and
     'File_id.diz' in their original, unaltered form.  I especially
     encourage you to upload this version, with a short explanatory note to
     the sysop, if you see an older version on a bulletin board that you
     frequent.  You are expressly forbidden to make copies of your
     registered copy, however, except for backup purposes.

     Important message from the Association of Shareware Professionals:
     "This program is produced by a member of the Association of Shareware
     Professionals (ASP).  ASP wants to make sure that the shareware
     principle works for you. If you are unable to resolve a
     shareware-related problem with an ASP member by contacting the member
     directly, ASP may be able to help. The ASP Ombudsman can help you
     resolve a dispute or problem with an ASP member, but does not provide
     technical support for members' products.  Please write to the ASP
     Ombudsman at 545 Grover Road, Muskegon, MI 49442 or send a CompuServe
     message via CompuServe Mail to ASP Ombudsman 70007,3536."

     !This line is necessary for proper program operation; don't delete!
     This work is Copyright (c) 1990-1994 by William H. Baldwin.

     --------------------------REGISTRATION FORM--------------------------
                                                _______
                                           ____|__     |               (R)
     William H. Baldwin                 --|       |    |-------------------
     8704 Broadmoor, #806                 |   ____|__  |  Association of
     Shawnee Mission, Ks.  66212          |  |       |_|  Shareware
     Compuserve UID: 76200,275            |__|   o   |    Professionals
                                        -----|   |   |---------------------
                                             |___|___|    MEMBER

     Hi, Will!  I support the shareware concept!  I am enclosing $15.00 as
     registration for 'The Variable Investment Analyst'.   My name and
     address is:

          ________________________________.

          ________________________________.

          ________________________________.

          ________________________________.

     Please supply whatever of the following information you can:

     The version I have is: ________.  I plan to use this program for:

         a) Personal, or b) Business use (circle one).

     I obtained this program from:

     Name: ________________________________.  Phone #: __________________.

     Address: ______________________________________.

     City: ______________________________________.

     State: ____  Zip: __________________.

     Is the above a computer bulletin board (Y/N): ____

     Are the instructions clear?

     To help me plan future enhancements, you may specify the type(s) of
     investments (mutual funds, partnerships, 401K plans, stocks, bonds,
     etc.) for which you plan to use this program:


     Additional comments: