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$$$$$$$$$$$ $ $ $$$$$$$ $$$$$$ $ $$$$$$$ $$$$$$$ $ $ $ $ $ $ $ $ $ $ $ $ $$$$$$$ $$$$$$ $ $ $$$$$$$ $ $$$$$$$$$$$ $ $ $ $ $ $ $ $$$$$ $$$$$$$$$$$ $ $ $$$$$$$ $ $$$ $ $$$$$$$$ $ $$$$$$ $ $ $ $ $$ $ $$ $ $ $$$$$$$ $ $ $$ $ $$ $$$$$$$$$$$ $ $ $ $ $$$ $$ $$ $$ $$$$$$$$$$$$$$$$$$$$$$$$$ Capital Gainz Users Manual Copyright 1991 by David Lee Cohen. All Rights Reserved. Version 2.2 Dave Cohen DBLinx P.O. Box 12545 RTP, NC 27709-2545 (919)-469-5196 CompuServe ID: 70431,132 Internet: davec@concert.net August 13, 1991 "Finally! A portfolio manager for investors using a 'dollar-cost averaging' strategy with mutual funds and dividend reinvestment plans!" (Online manual does not include example screens or reports.) Capital Gainz Users Manual Table of Contents Preface - The Story of Capital Gainz . . . . . . . . . . . . . . v Format of this Manual . . . . . . . . . . . . . . . . . . . vii Chapter I. - Introduction . . . . . . . . . . . . . . . . . . . . 1 A. What Capital Gainz Is Not . . . . . . . . . . . . . . . 3 B. Getting Started . . . . . . . . . . . . . . . . . . . . 4 1. Getting Help . . . . . . . . . . . . . . . . . . . 4 2. Command Keys and Key Combinations . . . . . . . . . 5 C. Files . . . . . . . . . . . . . . . . . . . . . . . . . 6 1. Distributed Files . . . . . . . . . . . . . . . . . 6 2. Data Files . . . . . . . . . . . . . . . . . . . . 7 3. Other Files . . . . . . . . . . . . . . . . . . . . 7 D. Command Line Options . . . . . . . . . . . . . . . . . . 8 1. Screen Blanking . . . . . . . . . . . . . . . . . . 8 2. Sound . . . . . . . . . . . . . . . . . . . . . . . 8 3. Keyboard Locks . . . . . . . . . . . . . . . . . . 8 4. Enhanced Keyboard . . . . . . . . . . . . . . . . . 8 E. System Requirements . . . . . . . . . . . . . . . . . . 9 1. Processor . . . . . . . . . . . . . . . . . . . . . 9 2. Operating System . . . . . . . . . . . . . . . . . 9 3. Memory . . . . . . . . . . . . . . . . . . . . . . 9 4. Disk Space . . . . . . . . . . . . . . . . . . . . 9 5. Monitor . . . . . . . . . . . . . . . . . . . . . . 10 6. Printer . . . . . . . . . . . . . . . . . . . . . . 10 7. System Clock . . . . . . . . . . . . . . . . . . . 11 F. Performance . . . . . . . . . . . . . . . . . . . . . . 11 G. Terminology . . . . . . . . . . . . . . . . . . . . . . 11 1. Investment Terms . . . . . . . . . . . . . . . . . 11 2. Screen Terms . . . . . . . . . . . . . . . . . . . 13 H. Field Entry . . . . . . . . . . . . . . . . . . . . . . 15 I. Who to Contact . . . . . . . . . . . . . . . . . . . . . 15 Chapter II. - System Overview . . . . . . . . . . . . . . . . . . 16 A. System Functions . . . . . . . . . . . . . . . . . . . . 16 1. System Function Flow . . . . . . . . . . . . . . . 16 B. Progress Displays . . . . . . . . . . . . . . . . . . . 16 C. File Structure . . . . . . . . . . . . . . . . . . . . . 17 1. Security File . . . . . . . . . . . . . . . . . . . 17 2. Open Shares File . . . . . . . . . . . . . . . . . 18 3. Sold Shares File . . . . . . . . . . . . . . . . . 18 4. Distributions File . . . . . . . . . . . . . . . . 19 5. Broker/Investment Company File . . . . . . . . . . 20 6. Price History File . . . . . . . . . . . . . . . . 20 7. Global Settings . . . . . . . . . . . . . . . . . . 21 8. Field Limits . . . . . . . . . . . . . . . . . . . 22 (Copyright 1991 by David Lee Cohen) i Capital Gainz Users Manual D. Reports . . . . . . . . . . . . . . . . . . . . . . . . 23 Chapter III. - Main Menu . . . . . . . . . . . . . . . . . . . . 25 Chapter IV. - Activity . . . . . . . . . . . . . . . . . . . . . 26 A. Buy Shares . . . . . . . . . . . . . . . . . . . . . . . 26 1. Fractions to Decimal . . . . . . . . . . . . . . . 27 2. Security Lookup . . . . . . . . . . . . . . . . . . 27 3. Examples . . . . . . . . . . . . . . . . . . . . . 28 B. Sell Shares . . . . . . . . . . . . . . . . . . . . . . 31 1. Fractions to Decimal . . . . . . . . . . . . . . . 33 2. Security Lookup . . . . . . . . . . . . . . . . . . 33 3. Selling Methods . . . . . . . . . . . . . . . . . . 33 4. Examples . . . . . . . . . . . . . . . . . . . . . 36 C. Record Distribution . . . . . . . . . . . . . . . . . . 47 1. Security Lookup . . . . . . . . . . . . . . . . . . 48 2. Distribution Types . . . . . . . . . . . . . . . . 49 3. Example . . . . . . . . . . . . . . . . . . . . . . 50 Chapter V. - Securities . . . . . . . . . . . . . . . . . . . . . 51 A. Security Table . . . . . . . . . . . . . . . . . . . . . 51 B. Add a Security . . . . . . . . . . . . . . . . . . . . . 52 C. Change a Security . . . . . . . . . . . . . . . . . . . 54 D. Delete a Security . . . . . . . . . . . . . . . . . . . 54 1. Security Types . . . . . . . . . . . . . . . . . . 54 2. Broker/Investment Company Lookup . . . . . . . . . 59 3. Selling Methods . . . . . . . . . . . . . . . . . . 59 E. Price Update . . . . . . . . . . . . . . . . . . . . . . 59 F. Security Summary . . . . . . . . . . . . . . . . . . . . 60 G. Portfolio Report . . . . . . . . . . . . . . . . . . . . 61 H. Fixup a Security . . . . . . . . . . . . . . . . . . . . 62 I. Split Shares . . . . . . . . . . . . . . . . . . . . . . 63 J. Price History . . . . . . . . . . . . . . . . . . . . . 63 1. Add a Price History Entry . . . . . . . . . . . . . 64 2. Change a Price History Entry . . . . . . . . . . . 65 3. Delete a Price History Entry . . . . . . . . . . . 66 4. Price History Report . . . . . . . . . . . . . . . 66 K. Allocation . . . . . . . . . . . . . . . . . . . . . . 66 Chapter VI. - Reports . . . . . . . . . . . . . . . . . . . . . . 68 Select Device . . . . . . . . . . . . . . . . . . . . . . . 69 Print to File . . . . . . . . . . . . . . . . . . . . . . . 69 Portfolio Report . . . . . . . . . . . . . . . . . . . . . . 69 Broker/Investment Company Report . . . . . . . . . . . . . . 70 Schedule B & D Reports . . . . . . . . . . . . . . . . . . . 70 1. Enter Year . . . . . . . . . . . . . . . . . . . . 71 Allocation Report . . . . . . . . . . . . . . . . . . . . . 71 Select Dates . . . . . . . . . . . . . . . . . . . . . . . . 71 (Copyright 1991 by David Lee Cohen) ii Capital Gainz Users Manual 1. Enter Date Range . . . . . . . . . . . . . . . . . 72 H. Select Securities . . . . . . . . . . . . . . . . . . . 72 1. Select Securities . . . . . . . . . . . . . . . . . 72 I. Security Summary Report . . . . . . . . . . . . . . . . 72 J. Activity Detail Report . . . . . . . . . . . . . . . . . 73 1. Select Log . . . . . . . . . . . . . . . . . . . . 73 2. Open Shares Detail Report . . . . . . . . . . . . . 73 3. Sold Shares Detail Report . . . . . . . . . . . . . 75 4. Distribution Detail Report . . . . . . . . . . . . 76 Price History Report . . . . . . . . . . . . . . . . . . . . 77 Chapter VII. - Activity Logs . . . . . . . . . . . . . . . . . . 79 A. Date Range . . . . . . . . . . . . . . . . . . . . . . . 79 B. Open Shares Log . . . . . . . . . . . . . . . . . . . . 79 1. Security Lookup . . . . . . . . . . . . . . . . . . 80 2. Add an Open Shares Record . . . . . . . . . . . . . 80 3. Change an Open Shares Record . . . . . . . . . . . 81 4. Delete an Open Shares Record . . . . . . . . . . . 81 5. Delete Range . . . . . . . . . . . . . . . . . . . 82 6. Open Shares Detail Report . . . . . . . . . . . . . 82 C. Sold Shares Log . . . . . . . . . . . . . . . . . . . . 82 1. Security Lookup . . . . . . . . . . . . . . . . . . 83 2. Add a Sold Shares Record . . . . . . . . . . . . . 83 3. Change a Sold Shares Record . . . . . . . . . . . . 83 4. Delete a Sold Shares Record . . . . . . . . . . . . 84 5. Delete Range . . . . . . . . . . . . . . . . . . . 85 6. Sold Shares Detail Report . . . . . . . . . . . . . 85 D. Distribution Log . . . . . . . . . . . . . . . . . . . . 85 1. Security Lookup . . . . . . . . . . . . . . . . . . 86 2. Add a Distribution Record . . . . . . . . . . . . . 86 3. Change a Distribution Record . . . . . . . . . . . 86 4. Delete a Distribution Record . . . . . . . . . . . 87 5. Delete Range . . . . . . . . . . . . . . . . . . . 87 6. Distribution Detail Report . . . . . . . . . . . . 87 Chapter VIII. - Broker/Investment Companies . . . . . . . . . . . 88 A. Broker/Investment Company Table . . . . . . . . . . . . 88 1. Add a Broker/Investment Company . . . . . . . . . . 88 2. Change a Broker/Investment Company . . . . . . . . 89 3. Delete a Broker/Investment Company . . . . . . . . 89 4. Broker/Investment Company Report . . . . . . . . . 89 5. Security/Account Number Information . . . . . . . . 89 Chapter IX. - Global Settings . . . . . . . . . . . . . . . . . . 91 A. Global Settings . . . . . . . . . . . . . . . . . . . . 91 1. Holding Period . . . . . . . . . . . . . . . . . . 91 2. Confirmations . . . . . . . . . . . . . . . . . . . 91 3. Reinvest . . . . . . . . . . . . . . . . . . . . . 92 (Copyright 1991 by David Lee Cohen) iii Capital Gainz Users Manual 4. Logging Transactions . . . . . . . . . . . . . . . 92 5. Price History Interval in Days . . . . . . . . . . 93 6. Backup Command . . . . . . . . . . . . . . . . . . 93 7. Printer Attributes . . . . . . . . . . . . . . . . 94 Select Screen Colors . . . . . . . . . . . . . . . . . . . . 95 Pick Foreground and Background Colors . . . . . . . . . . . 96 D. Use Activity Logs . . . . . . . . . . . . . . . . . . . 96 Chapter X. - Analysis . . . . . . . . . . . . . . . . . . . . . . 97 A. Rounding . . . . . . . . . . . . . . . . . . . . . . . . 97 B. Open Shares Gain/Loss . . . . . . . . . . . . . . . . . 97 1. Open Shares Gain/Loss Percentage . . . . . . . . . 98 2. Broker/Investment Company Performance . . . . . . . 98 C. Sold Shares Gain/Loss . . . . . . . . . . . . . . . . . 98 1. Sold Shares Gain/Loss Percentage . . . . . . . . . 99 D. Average Price . . . . . . . . . . . . . . . . . . . . . 99 E. Current Yield . . . . . . . . . . . . . . . . . . . . . 100 F. Total Return . . . . . . . . . . . . . . . . . . . . . . 101 G. Price History . . . . . . . . . . . . . . . . . . . . . 102 H. Portfolio Allocation . . . . . . . . . . . . . . . . . . 102 Chapter XI. - Detailed Information on Selling Methods . . . . . . 103 A. Cost Basis . . . . . . . . . . . . . . . . . . . . . . . 103 1. First-In/First-Out (FIFO) and Last-In/Last-Out (LIFO) . . . . . . . . . . . . . . . . . . . . . . 103 2. Max Gain/Min Loss (MAX) and Min Gain/Max Loss (MIN) . . . . . . . . . . . . . . . . . . . . . . 104 3. Specific Identity (ID) . . . . . . . . . . . . . . 104 B. Average Basis . . . . . . . . . . . . . . . . . . . . . 104 1. Single Category Method . . . . . . . . . . . . . . 105 2. Double Category Method . . . . . . . . . . . . . . 105 Cost and Sales Price . . . . . . . . . . . . . . . . . . . . 106 Taxing Dividends and Capital Gains . . . . . . . . . . . . . 107 Chapter XII. - Investment Strategies for the Small Investor . . . 108 A. Dollar-cost averaging . . . . . . . . . . . . . . . . . 108 B. Mutual Funds . . . . . . . . . . . . . . . . . . . . . . 109 C. Dividend Reinvestment Plans (DRPs) . . . . . . . . . . . 109 1. More Information on DRPs . . . . . . . . . . . . . 109 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 (Copyright 1991 by David Lee Cohen) iv Capital Gainz Users Manual Preface - The Story of Capital Gainz After graduating from college and managing to land a good paying software engineering job, I naturally became interested in investing. I read books and magazines covering various aspects and strategies of investing. When the moment came to plunk down my cash, I was tripped up by that arch nemesis of small investors: the brokerage fee. Apparently, you couldn't make money in the investment game unless you already had plenty of it! Switching gears, I hit on the concept of Mutual Funds. Natural progression led me to the small investor's utopia: no-load mutual funds. Finally, it was time to take the plunge. I spent some time switching cash from fund to fund whenever the urge struck. It was the hey-day of the mid-80's bull market, and very difficult to make a mistake when investing in stock funds. Then came the crash of '87 and a period of wild market instability. Whereas 90% of the investment strategies were winners during the ride up, I couldn't find a strategy which adequately dealt with the new market instabilities. I was confused...and then I saw the light of dollar-cost averaging. Shortly afterwards I stumbled onto Dividend Reinvestment Plans, which allowed purchases of company stock without paying brokerage commissions. Mutual Funds and Dividend Reinvestment Plans became the basis for my rigid 'x dollars every month' dollar-cost averaging routine. While formulating these investment strategies, I finally broke down and bought a personal computer for home. I thought it would be nice to manage my investments and track performance using my new purchase, a 7MHz Epson Equity II. The paper, pencil, and calculator era drew to a close as I designed a spreadsheet and accompanying formulas to manage and track my investments. Not long after that, I redesigned the spreadsheet to address the shortcomings of the initial version. Along the way, I made the standard mistakes in specifying cell ranges and screwing up calculations by not moving blocks of cells in just such a way that the maze of interdependencies would remain intact. There had to be a better way. A Turbo-Tax/Quicken software bundle I purchased came with a free investment tracking program called Stock!. I played with it a bit - a little slow, but it looked like it would solve my spreadsheet blues. Well, the more data I entered, the slower Stock! ran. I read articles in PC Week while waiting for the program to record sales of shares, the red hard disk light on my PC flashing madly. I even gave it a crack at work on my 20Mhz 386 machine. It ran somewhat faster, but it (Copyright 1991 by David Lee Cohen) v Capital Gainz Users Manual was still beyond my patience level. I hunted around for shareware and freeware, and only really found one package which came close to meeting my needs. After experimenting a bit, I decided it was time to look at commercial packages. Since Managing Your Money was the top selling investment program for PCs, I borrowed the manual from a friend to give it a look-see. Well, by this time I had become pretty stubborn and wanted a package that would meet my every need. MYM missed on several counts, most noticeably the fact that distributions were simply swept off into the checking account module, and not factored into performance in any way. The ugly truth was out: not only did it take money to make money in the investing game, but the software to manage investments was geared to the large investor buying and selling blocks of stock. What about the small investor sticking to a regimen of dollar-cost averaging? What about the conservative investor who enrolled in dividend reinvestment plans to capture both income and share appreciation opportunities? As far as I could tell, they were left out in the cold. It looked like if I really wanted satisfaction, I had to do it myself. After carefully scrutinizing the various application development packages, I chose Clarion Professional Developer for both functional and monetary reasons. I also bought a 386 machine to join my outdated PC XT compatible at home. Several months and many late evening, early morning, and weekend sessions later, Capital Gainz was born. Maybe you've hit many of the same potholes that I have. In fact, you could very well have found new ones. Or, maybe you're just starting out in the quest to link your investments to the power of your personal computer. In any case, I hope Capital Gainz satisfies your investment tracking needs. I welcome all suggestions and comments on the program, and if it generates enough response I'd like to expand its functionality to include graphic charts, advanced calculations like yield to maturity for bonds and average annual return for securities, support for partnerships, tie-ins to checking account managers, ... So let me know how you feel. And register if you like it. I'd feel awfully bad about adding all the help, documentation, error checking, logging, and miscellaneous features if no one but me uses Capital Gainz. Plus, I really want to add more neat stuff, and I bet that you have a specific need that is currently absent from Capital Gainz, but would really help with your investment endeavors. Let me know. Sincerely, Dave Cohen (Copyright 1991 by David Lee Cohen) vi Capital Gainz Users Manual Format of this Manual This manual contains the following information: The Preface discusses the birth of Capital Gainz, and is a good opportunity to spruce up dry, technical manuals such as this. Chapter I -Introduction discusses features of Capital Gainz, how to get started, where to find help, system requirements, and terminology used. Chapter II - System Overview provides a brief tour of Capital Gainz, with emphasis placed on file structure and logical program flow. Chapter III - Main Menu through Chapter IX - Global Settings provide detailed information on using Capital Gainz, emphasizing the screen subsystems. Chapter X - Analysis reviews the investment analysis features of Capital Gainz. Chapter XI - Detailed Information on Selling Methods gives detailed information on tax strategies and requirements for the different selling methods offered by Capital Gainz. Chapter XII - Investment Strategies for the Small Investor briefly discusses small investor's strategies targeted by Capital Gainz, including Dividend Reinvestment Programs. (Copyright 1991 by David Lee Cohen) vii Chapter I. - Introduction Capital Gainz is an investment tracking program designed for the small investor who accumulates shares in Mutual Funds and Dividend Reinvestment Plans over a period of time. Other investments, such as bonds, can also be tracked. However, some specific needs for other investments, such as the recording of a bond's maturity date, are not included. Also, investment variations such as short sales and indexes are not directly supported. Dollar-cost averagers have specific needs which are not satisfied by any of the investment management programs currently on the market: 1) The ability to determine total return of an investment over a given time period: Most existing programs can show the progress of a security's price, but fail to add back dividends and capital gains distributions to get a true total return figure. 2) The ability to easily sell a number of shares that were acquired over time: Most existing programs only allow you to select specific open shares to sell. Selling two years worth of purchased Mutual Fund shares, assuming monthly purchases and yearly dividend and capital gains distributions, becomes a tedious exercise requiring you to specify 26 different selling actions. 3) The ability to sell shares using a variety of methods: The IRS gives you many options when it comes to disposing of investments - first-in/first-out, last-in/last-out, average price (Mutual Funds only), and specific share identification. However, most programs limit you to one, or at best several, of these selling methods. 4) The ability to retrieve the exact information required to fill out Schedule D of the Federal Income Tax Form: Most programs print out all the closing transactions, forcing you to pull out a calculator and pencil and partition each individual sale by hand for reporting gains and losses. 5) The ability to see what the outcome of selling some number of shares would be, without actually recording the sale: Most programs do not provide a 'what if?' mechanism to see what the outcome of a sale would be. Again, you're forced to get out the calculator, pencil, and paper to determine if the sale should be made. 6) The ability to scan the historical price data of a security. Most programs simply record buy and sell transactions, limiting (Copyright 1991 by David Lee Cohen) 1 Capital Gainz Users Manual price information to activity dates. You have to print out buy and sell transactions just to see the price history of a security. Why are these features missing from most investment managers? Because most investment managers are oriented toward the large investor who buys and sells blocks of stock. Capital Gainz addresses the needs of small investors like you by including features to: 1) Determine a security's total return for a given period of time: You specify a date range, and Capital Gainz finds the earliest price, latest price, and cumulative distributions within that date range in order to calculate a true total return figure. This feature is a boon to the investor who seeks both dividends and price appreciation, since these two values are relatively useless when viewed individually. Now this income oriented investor can easily determine if Stock X's appreciation over the last year adequately made up the difference between its 4.5% yield and the current 7% average money fund yield. 2) Easily sell a number of shares that were acquired over time: You can specify a number of shares to sell and a selling method such as first-in/first-out, and Capital Gainz will automatically close the appropriate open shares records and create sold shares records. Thus, in the earlier example where you wanted to sell two years worth of accumulated shares, Capital Gainz requires only a single sell transaction to be entered. Of course, Capital Gainz also provides a way to specify individual shares to sell, but again only a single logical transaction is required. To sell specific shares, you select the shares to sell from a table, and then tell Capital Gainz to close the selected shares. 3) Sell shares using a variety of methods: In addition to selling shares by identification or first-in/first-out, Capital Gainz allows you to sell shares, using the same single logical transaction, with these methods: last-in/last-out, maximize gains/minimize losses, minimize gains/maximize losses, and average price (Mutual Funds only). The methods employing maximization/minimization of gains are particularly powerful - you can see the effect of maximizing profits, post the sell order to the broker or investment company responsible, and then commit the sale after receiving share price confirmation. 4) View, print, or save to a file the results of a specific sale: If 50 shares were sold on 1/1/90, you can view or print the Sold Shares Log entries for that date and transfer the information to Schedule D of the Federal Income Tax Form. In fact, you can print out information in a Schedule D-like form for easy transfer. I (Copyright 1991 by David Lee Cohen) 2 Capital Gainz Users Manual went back over my 1990 tax return after entering my investment data in Capital Gainz, and found a $100 error (too high - so it cost me about $28) in reporting the capital gains that resulted from a sale. This mistake was caused by a previously used investment program that printed out all of the closing transactions, forcing me to partition individual sales and calculate the gains and losses by hand. 5) See the results of selling a number of shares using different selling methods without committing the transaction: After specifying how many shares to sell and the selling method to use, or selecting the specific shares using the identification method, a table of all affected open shares is displayed along with the associated gain or loss. You are then given the choice of confirming or backing out of the sale. Confirmation results in the affected open shares records being changed or removed and the sold shares records being written, while choosing not to confirm the sale leaves all files in the same state as prior to entering the selling information. 6) Maintain a price history: Every buy and sell transaction adds an entry to the Price History File. You can also manually add entries, change entries, and delete entries. To even out the date/price entries added, you specify the number of days between entries. The display and print format of the Price History File flags the high and low prices, and gives you a simple average price. In addition, distributions are noted so you can easily tell when a price dip is attributable to a dividend payout. Thus, while Capital Gainz has most of the features offered by other investment tracking programs, its true power lies in the additional features provided for the small investor who prefers dollar-cost averaging to buying and selling round lots of shares. If these are some of the features you've been looking for, read on and see what else Capital Gainz has to offer. A. What Capital Gainz Is Not Capital Gainz is currently a single user application. If there is sufficient demand, it could be enhanced to include multi user requirements such as record-locking. The development platform used contains support for both multi-user systems and LANs, so support for multiple simultaneous users is only a matter of adding the appropriate protection and restructuring several areas to avoid contention. Capital Gainz does not support short sales, nor does it provide any special features for stock indexes. These will be added in future releases, but they are not high priority. Also, there are no special (Copyright 1991 by David Lee Cohen) 3 Capital Gainz Users Manual calculations for bonds, such as yield-to-maturity. Such calculations may eventually be added. Capital Gainz currently manages a single portfolio. Support for multiple portfolio management is being investigated. If multiple portfolios are required now, the only option is to create multiple DOS directories containing the Capital Gainz files. To use a specific portfolio, Capital Gainz must be started in that portfolio's directory. Security and Broker/Investment Company Files can't be shared. The Capital Gainz program itself, CAPGNZ.EXE, can exist in a single directory located in the DOS PATH. Capital Gainz does not provide extensive analysis tools. No graphing or charting capabilities are offered. Chapter X - Analysis discusses the analysis functions available with Capital Gainz. B. Getting Started If you just can't wait to start up Capital Gainz, at least make sure you've skimmed the README.DOC file for installation instructions and any important considerations. Also be sure to refer to the LICENSE.DOC file for usage and distribution guidelines, as well as restrictions that apply if this is an unregistered shareware version of Capital Gainz. After installation, Capital Gainz can be started by typing CAPGNZ Capital Gainz data files (*.DAT and *.K01) and help files (*.HLP) must be located in the directory that you're in when you start Capital Gainz. The DOS search path can be used to locate the Capital Gainz executable file. Personally, I try to never read documentation before trying a program. If the program is easy enough to use without it, then I may refer to it in the future for more advanced features. I hope Capital Gainz is easy enough to use without painful reading of this 150+ page document. 1. Getting Help Online help is only a function key away in Capital Gainz. The F1 function key brings up the help screen most suitable for the current table or form, but you can subsequently elect to view help on any topic from any help screen. Online help is available for the following topics: (Copyright 1991 by David Lee Cohen) 4 Capital Gainz Users Manual 2. Command Keys and Key Combinations The Terminology Section explains each of these types of screens in more detail. Forms : Forms accept the entry of values for one or more fields. Field Entry Section : ESC - go to previous field, quit form if on first field CNTL-ESC - reject form CNTL-END - erase field ENTER - accept field and go to next field, accept form if on last field CNTL-ENTER - accept form UP ARROW - go to previous field DOWN ARROW - same as ENTER Menus : Menus accept a choice which triggers an indicated action. Menus also may accept the entry of one or more fields. Field Entry Section : same as Form Menu Section : ENTER - call routine for current item ESC - quit menu UP ARROW - cursor up one item DOWN ARROW - cursor down one item other keys - call routine for indicated item Tables: Tables show a repeated set of values. Tables also may accept the entry of one or more fields. Most tables allow you to call up a form to enter, add, or delete values. Lookup Tables only allow you to select, insert, or delete a value. Show Tables only allow the you to view values. Select Tables allow you to tag one or more values. (Copyright 1991 by David Lee Cohen) 5 Capital Gainz Users Manual Field Entry Section : same as Form Record List Section : ESC - quit table, or go to field entry section CNTL-ESC - quit table UP ARROW - cursor up one record DOWN ARROW - cursor down one record PGDN - scroll table down PGUP - scroll table up CNTL-PGDN - go to last record CNTL-PGUP - go to first record INS - call form to add a record, invalid for Select and Show Tables DEL - delete table entry at cursor, invalid for Select, and Show Tables ENTER - call form to change record at cursor, except: Lookup Table - select record at cursor Select Table - toggles select for record at cursor Show Table - ignored Special function keys and common key combinations are labelled at the bottom of all tables and forms. If all of the function keys won't fit on one line, there may be a MORE key to scroll through the available function keys. The F1 function key is always used for screen help. In addition, there is a Command Key help topic available that describes the effect of each key or key combination from within a menu, form, or table. C. Files 1. Distributed Files After installation, you should have the following files in the directory where Capital Gainz was installed: o CAPGNZ.DOC - user's manual o CAPGNZ.EXE - Capital Gainz executable o CAPGNZ.HLP - Capital Gainz help file o CAPGNZBU.BAT - example batch file for data backup o CAPGNZSH.COM - executable used for DOS shell (Copyright 1991 by David Lee Cohen) 6 Capital Gainz Users Manual o LICENSE.DOC - registration information o OMB.ASP - ASP Ombudsman policy o README.DOC - installation information and update history o HISTORY.DOC - history of additions and changes by revision number (Two other files, VENDOR.DOC and INSTALL.COM, are distributed but not actually installed.) 2. Data Files The following files are created when you use Capital Gainz: o SECURITY.DAT, SECURITY.K01 - security data o OPEN.DAT, OPEN.K01 - open shares data o CLOSE.DAT, CLOSE.K01 - sold shares data o DISTR.DAT, DISTR.K01 - distribution data o BROKER.DAT, BROKER.K01 - broker/investment company data o PRC_HST.DAT, PRC_HST.K01 - price history data o SETTINGS.DAT - global settings data 3. Other Files Capital Gainz also creates and uses the following temporary files: o $*.TMP - this file (the '*' is an MS-DOS wildcard) is created when you shell to DOS, and contains the Capital Gainz program image to restore when you enter EXIT. If you turn off the machine without exiting back to Capital Gainz, this file will be left around - it can simply be deleted. o CAPGNZ.TX, SECURITY.LOG, OPEN.LOG, CLOSE.LOG, DISTR.LOG, BROKER.LOG, PRC_HST.LOG - these files contain transaction tracking information. They will only show up if you have Transaction Logging turned on. If Capital Gainz aborts, the next time you run it the transactions in these files will be rolled back. You should not delete these files - if you do, make sure to delete all of them, as Capital Gainz may not be (Copyright 1991 by David Lee Cohen) 7 Capital Gainz Users Manual able to execute otherwise. o CAPGNZ.TMP - this is a temporary files used for appending reports. Deleting it has no effect on Capital Gainz, as it's emptied and reused for each report. D. Command Line Options Capital Gainz includes several options modifiable by command line settings and switches. 1. Screen Blanking Capital Gainz has a built in screen blanker. After 10 minutes of inactivity, the monitor is blanked. Hit any key to bring back the previous display. The V switch changes the video timeout value. Thus, to blank the screen only after 30 minutes of inactivity: CAPGNZ V=30 To disable screen blanking: CAPGNZ V=0 2. Sound To disable beeping, commonly used to signal errors, use the B switch: CAPGNZ B=NO 3. Keyboard Locks Some functions automatically set keyboard locks. To disable automatic setting of keyboard locks, use the L switch: CAPGNZ /L 4. Enhanced Keyboard Use the E switch to specify that the system keyboard is an enhanced keyboard: (Copyright 1991 by David Lee Cohen) 8 Capital Gainz Users Manual CAPGNZ /E E. System Requirements 1. Processor An 8086, 80286, 80386, or 80486 based personal computer, or a close compatible like Epson's NEC chip systems, is required. Capital Gainz performs reasonably well on 8086 based computers, but you may prefer 80286 or 80386 systems. (In fact, initial development of Capital Gainz was done on a 7Mhz Epson 8086 compatible PC.) 2. Operating System Capital Gainz will run on MS-DOS or PC-DOS version 3.00 or later. Capital Gainz has been tested with MS Windows 3.0, DESQview, and 4DOS. 3. Memory In order to coexist with a normal set of TSRs, 512KB is a safe minimum amount of RAM. However, in order to maximize performance, 640KB of RAM is recommended. Although the physical size of the Capital Gainz executable file CAPGNZ.EXE is around 550KB, some of the subsystems are overlaid to reduce actual runtime RAM requirements. 4. Disk Space Although it's possible to run Capital Gainz on a high-density floppy disk, a hard disk is strongly recommended. With some of the more disk-intensive operations, such as closing a large number of open shares, performance depends heavily on disk access speeds. The Capital Gainz executable file is approximately 550KB. After adding documentation, utility files, and static data files, reserve about 800KB of space in addition to the space required for your data. The disk space used by data files and their associated key files is: Securities File: approximately 155 bytes of data, plus index overhead for the 5 byte key in the key file, for each record added. Open Shares File: approximately 50 bytes of data, plus index overhead for the 9 byte key in the key file, for each record added. Sold Shares File: approximately 70 bytes of data, plus index overhead for the 13 byte key in the key file, for each record (Copyright 1991 by David Lee Cohen) 9 Capital Gainz Users Manual added. Distributions File: approximately 50 bytes of data, plus index overhead for the 9 byte key in the key file, for each record added. Broker/Investment Company File: approximately 130 bytes of data, plus index overhead for the 30 byte key in the key file, for each record added. Price History File: approximately 14 bytes of data, plus index overhead for the 9 byte key in the key file, for each record added. Global Settings File: 255 bytes. Note that the first few records entered will result in somewhat larger disk usage than indicated by the above record sizes. This is due to initialization information and also minimum disk space allocation requirements. Space freed by deleted records is not reflected by smaller files, but the space is marked as free and subsequently reused. If you need to free up disk space, you can delete the on-line users manual, CAPGNZ.DOC, the README.DOC file, and the LICENSE.DOC file. Removing these documentation files gives you another 250KB+ of disk space. Unless you're a very active investor, 100KB of disk space will hold at least 3-4 years of data. Thus, a total of about 700KB of disk space can handle the Capital Gainz program, utilities, and investment data for a considerable period of time. 5. Monitor Capital Gainz will work with any monochrome or CGA/EGA/VGA monitor that can display the IBM extended ASCII character set, which includes the special line drawing characters. No special graphics boards are required. 6. Printer Capital Gainz does not require a printer, as you can either view data without generating reports or send reports to ASCII files. A printer is recommended, though. Before printing reports, see if your printer is capable of printing the IBM extended ASCII character set. You may need to consult your printer's manual for information on setting the printer's DIP switches for printing graphics. If your printer does not support these line drawing characters, make sure you set the Line Draw Chars value to 'N' in the Global Settings File. This (Copyright 1991 by David Lee Cohen) 10 Capital Gainz Users Manual will avoid printing lots of strange characters. 7. System Clock Since Capital Gainz uses the system date for calculations involving the long term holding period, a battery powered internal system clock is recommended. If a clock is not installed, you must be sure to accurately set the system time prior to running Capital Gainz. The best way to remember to do this is to add the DOS DATE command to your AUTOEXEC.BAT file. F. Performance Every effort was made to boost Capital Gainz performance without sacrificing reliability. File buffers and index caches are used at runtime, so the computer's hard disk may appear to be strangely quiet while performing operations based on reading files, such as building activity log tables. G. Terminology In order to avoid possible confusion, the main terminology employed by Capital Gainz is described briefly in this section. 1. Investment Terms o Basis: 'basis', or 'basis amount', is sometimes used to refer to the amount of a purchase. Likewise, sometimes 'basis price' is used to refer to the purchase price. The term 'basis' is used to reflect the fact that the actual purchase amount, or price, is not necessarily the same amount, or price, used to determine gain/loss when the shares are sold using a category, or averaging method. In all other cases, the basis amount and price are the same as the purchase amount and price. With one exception, Capital Gainz does not include any commissions in the basis amount. Commissions are simply subtracted from the calculated gain/loss. The reason for this approach is that the commission amount was not used to buy shares. It could be argued that the basis amount should include commissions - the only effect would be slightly higher gain percentages and slightly lower loss percentages. (See Chapter X - Analysis for details.) Regardless, the actual gain or loss amount would be the same. The exception to this basis calculation is for the Schedule D Report. Here, commissions are factored into the basis amount to reduce your taxes. As per the IRS guidelines, purchase and (Copyright 1991 by David Lee Cohen) 11 Capital Gainz Users Manual selling commissions are added to the open basis amount. (See Chapter XI - Detailed Information on Selling Methods.) o Broker/Investment Company: Broker/Investment Company refers to the individual or company that should be contacted to buy or sell shares of a particular security. An address and phone number are associated with the person or company. Thus, a mutual fund security could be connected to an investment company, along with the company's address and 800 number. Likewise, a specific brokerage could be associated with a stock or mutual fund. o Commissions: commissions are fees charged by broker/investment companies to purchase or sell securities. The discussion about 'basis' describes how commissions are treated in the security costs. Commissions should include mutual fund front end and back end loads. o Distributions: Distributions are dividends, short term capital gains, and long term capital gains. In addition, miscellaneous fees, such as an IRA maintenance fee, that are not associated with a particular group of shares are kept as distributions. The reasoning behind this is that the relative infrequency of such fees does not warrant separate logs, reports, or screen groups. o Distribution: a monetary payout to holders of a security. For instance, bonds, mutual funds, and many stocks distribute dividends to shareholders. Capital gains distributions are usually only associated with mutual funds. o Distribution Type: a specific type of distribution, such as a dividend or short term capital gain distribution. o Fees: fees are IRA maintenance fees, low share balance fees, mutual fund maintenance fees, or other fees that aren't associated with particular shares. Since they can't be associated with particular shares, fees are not used in any gain/loss calculations. If you don't want to include commissions in the gain loss calculations, then you could use the fees distribution type for them. Fees are managed along with distributions. o Load: mutual funds often charge front end loads on purchases, and/or back end loads on sales. These charges should be treated as commissions to get accurate gain/loss calculations. (Copyright 1991 by David Lee Cohen) 12 Capital Gainz Users Manual o Log: Unfortunately, the use of the term 'Log' can cause confusion. The activity logs refer to the Buy, Sell, and Distribution File records. On the other hand, logging transactions means that you are saving a pre-image of files prior to atomic operations. Logging transactions prevents inconsistencies due to machine crashes while files are being written, but also penalizes performance with extra file read/writes. o Open Shares: Open shares are instances of a security that have been purchased but not yet sold. 'Open' and 'Buy' are often used interchangeably when referring to open shares. o Price History: Price History refers to a log of date/price combinations, useful for investment analysis. o Security: A security refers to a particular company's stock or bonds, or to a particular mutual fund offered by an investment company. Thus, both IBM stock and the Fidelity Magellan mutual fund are examples of securities. o Security Type: A specific type or category of security, such as Bond Mutual Fund or Large Company Stock. o Selling Method: a strategy for selling shares, such as First-In/First-Out or Maximum Gain/Minimum Loss. o Sold Shares: Sold shares are instances of a security that have been purchased and subsequently sold. 'Sold' and 'closed' are synonymous. 2. Screen Terms o Command Keys: Command keys refer to all keys that have special meaning. These include : ENTER, CNTL-ENTER, ESC, CNTL-ESC, PGUP, CNTL-PGUP, PGDN, CNTL-PGDN, the arrow keys, and the function keys. CNTL-ENTER means to hold down the Control key while hitting the Enter key. The INS and DEL keys are usually found on the numeric keypad, and NumLock must be turned off to use them. You can use the ENTER key on the main keyboard or the numeric keypad. o Forms: Forms refer to screens that require you to enter information. o Tables: Tables refer to lists of associated records. (Copyright 1991 by David Lee Cohen) 13 Capital Gainz Users Manual Sometimes you must define the association through a data entry field at the top of the table. There are several variations of Tables - without any qualifying adjectives, a Table will be used to refer to a list of associated records that allows some combination of Add/Change/Delete operations. o Lookup Tables: Lookup Tables are similar to ordinary Tables, except that the ENTER key selects a value for insertion into the calling Form. Add/Delete operations are also supported. o Select Tables: Select Tables are similar to ordinary Tables, except they only allow rows to be tagged/untagged. Add/Change/Delete operations are not supported. o Show Tables: Show Tables are similar to ordinary Tables, but manipulation or selection of rows is not allowed. The data can only be viewed. o Menus: Menus offer you a list of choices, and a selection is made by hitting the ENTER key when the desired choice is highlighted, or hitting the indicated key associated with the desired choice. Sometimes, Menus also require field entry. o Point To: 'Point to' refers to the cursor's positioning in relation to the fields on the screen. When the cursor is positioned on a field (or sometimes a set of fields), the field (or fields) are distinguished by reverse video attributes. o Fields: Fields are values that you enter. When a field is waiting for entry, it's highlighted. Fields often require entry, but may be optional. If a field is optional, you can leave it blank. Some required fields will pop up a Lookup Table if you enter a blank or invalid value. You highlight the desired choice in the table and hit ENTER. Other required fields may present a list of several options next to the cursor. For these fields, you can highlight your choice and hit ENTER, or just hit the initial (or only) character in the desired choice. Capital Gainz normally enables the NumLock key for numeric fields so you can use your numeric keypad for entry. (Copyright 1991 by David Lee Cohen) 14 Capital Gainz Users Manual H. Field Entry When filling in form fields, you can use the INS, DEL, BACKSPACE, and arrow keys for editing. If a field is required, you can't go to the next field until you enter a valid value. If a field is not required, then you can leave it blank and hit ENTER. Except when you're offered a choice of values for a field, you must terminate an entry with the ENTER key. When offered a choice of values, you can enter the first - or only - character in your choice, and the field is automatically accepted. Or, you can use the arrow keys to highlight your choice and then hit ENTER. For example, when given a choice of 'Y' or 'N' (Yes or No), you can simply hit the 'Y' or 'N' key. Capital Gainz tries to 'guess' what you want to enter. For instance, it globally saves the last entered date field, and displays it in subsequent forms' date fields. Likewise, the last entered security symbol is filled in subsequent symbol entry fields. Or, when selling shares, Capital Gainz fills in the number of shares value with the current number of open shares. As you can see, Capital Gainz relies heavily on default values to make you data entry experience pleasant. Of course, you can change the displayed defaults. I. Who to Contact Capital Gainz is Copyrighted 1991 by David Lee Cohen. Any comments, bug reports, or suggestions are welcome: Dave Cohen DBLinx P.O. Box 12545 RTP, NC 27709-2545 (919)-469-5196 CompuServe ID: 70431,132 Internet: davec@concert.net Refer to the README.DOC file for recent information not included in this manual. Refer to the LICENSE.DOC file for information regarding distribution and registration of Capital Gainz. Specific information for disk vendors is included in the VENDOR.DOC file. (Copyright 1991 by David Lee Cohen) 15 Chapter II. - System Overview A. System Functions The Map help screens give you a 'map' of the Capital Gainz functions. The Main Map corresponds to Capital Gainz' Main Menu. Functions followed by a '...' can be expanded by moving the cursor to the function and hitting ENTER. The Activity Map shows functions available from the Activity Menu. The Security Map shows functions available after choosing Security from the Main Menu. The Report Map shows functions available from the Report Menu. The Log Maintenance Map shows functions available from the Log Maintenance Menu. The Broker/Investment Company Map shows functions available after choosing Broker/Investment Company from the Main Menu. 1. System Function Flow A typical user's path through Capital Gainz is illustrated in the Flow help screen: B. Progress Displays Capital Gainz displays messages at the bottom of the screen when it's busy with the following activities: o Creating multiple records o Updating multiple records o Deleting multiple records o Printing a report o Building a table for display o Splitting shares Sometimes, these messages flash rather quickly. Don't be alarmed - any (Copyright 1991 by David Lee Cohen) 16 Capital Gainz Users Manual errors will be displayed and pause for user input. C. File Structure The Files help screen shows the composition of the data files used by Capital Gainz: 1. Security File Security information is shown in a table, and inserted or changed by a form. The Security File maintains the following information: o Symbol: a unique, 1-5 character id. This can be the stock symbol used in the newspaper listings, but you are free to specify any 1-5 character string. o Name: a full, descriptive name for the security. Up to 25 characters can be entered. o Broker/Inv Co: the name of the broker or investment company associated with the security. Up to 30 characters can be entered. o Account Number: the brokerage account number, mutual fund account number, or company dividend reinvestment plan number. Up to 20 numbers or characters can be entered. o Type: the type code of the security, selected from a predefined list. This defines the security's category. o Dividends/Year: the number of dividend payouts per year. For instance, if dividends are paid annually, enter 1. If dividends are paid monthly, enter 12. This value is very important in calculating a security's current yield. o Sell Method: the most recent selling method used with this security is saved and used as the default the next time shares are sold. o Tax Exempt: a flag indicating whether or not the security is tax exempt. This flag is used when generating the Schedule B and D Reports. o Open Share Information: the number of open shares, the open amount, and the open commission are maintained for two reasons. First, it allows this information to be displayed quickly on the Security Table without totalling the values of all open shares records. Second, it is necessary for a (Copyright 1991 by David Lee Cohen) 17 Capital Gainz Users Manual security that employs an averaging selling method, since maintaining average share price information in each open shares record would cause multiple writes every time shares are bought or sold, translating into extremely poor performance. o Double Category Information: the date of the last short term to long term 'migration', and an indication of whether any short term or long term shares have been sold is kept in order to correctly maintain securities that use the double category selling method. 2. Open Shares File Share purchases are added or changed by entering information into a form, while all open shares records can be displayed in an activity log table. Buying shares creates an open shares record with the following information: o Symbol: the purchased security's symbol. o Date: the date the shares were purchased. Different purchases can be made on the same date for the same security. o Shares: the number of shares purchased. o Price: the purchase price of the shares. o Amount: the purchase amount, not including any commission. o Commission: the commission or load charged on this purchase. o Notes: any comment you wish to make about this purchase for future reference. Up to 20 characters can be entered. 3. Sold Shares File Share sales are added or changed by entering information into a form, while all sold shares records can be displayed in an activity log table. Selling shares creates one or more sold shares records. Corresponding open shares records are deleted if all shares are sold, or changed if only some of the shares are sold. The sold shares records contain the following information: o Symbol: the sold security's symbol. (Copyright 1991 by David Lee Cohen) 18 Capital Gainz Users Manual o Date: the date the shares were sold. Different sales can be made on the same date for the same security. o Short Term Flag: if the time period between the purchase and sale dates was less than or equal to the holding period AT THE TIME OF THE SALE OR WHEN THE RECORD IS CHANGED, this flag is true. o Shares: the number of open shares sold. o Price: the selling price of the shares. o Amount: the amount received for selling the open shares, prior to subtracting any commission. o Commission: the commission or load charged on this sale. o Notes: any comment you wish to make about this sale for future reference. Up to 20 characters can be entered. o Open Share Information: the date, price, amount, and commission of the associated open shares. By maintaining this information, Capital Gainz can 'unsell', or recreate, open shares records when sold shares records are deleted. 4. Distributions File Distributions are added or changed by entering information into a form, while all distribution records can be displayed in an activity log table. Recording a distribution creates a distribution record with the following information: o Symbol: the security's symbol. o Date: the date of the distribution. o Type: the type of distribution, such as dividend, capital gain, or fee. It's important to distinguish dividend distributions in order to get accurate yield calculations. Fees include miscellaneous charges, such as IRA maintenance fees. Fees are not used in calculating gain/loss, as they can't be associated with particular shares. o Amount: the amount of the distribution. This number is positive, even for fees. o Amount Per Share: the per share amount of the distribution. (Copyright 1991 by David Lee Cohen) 19 Capital Gainz Users Manual This value is important in calculating an accurate total return figure. Ignored for fees. o Notes: any comment you wish to make about this distribution for future reference. Up to 20 characters can be entered. 5. Broker/Investment Company File Broker/Investment Company information is shown in a table, and inserted or changed by a form. Broker/investment companies encompass full-service brokers, discount brokers, mutual fund companies, and company dividend reinvestment plans. The Broker/Investment Company File maintains the following information: o Name: the name of the broker/investment company. Up to 30 characters can be entered. o Address: the address of the broker/investment company. There are two lines of 30 characters each, so one line could include a broker's name. o City: the city where the broker/investment company is located. o State: the two character code of the state where broker/investment company is located. o Zip: the zip code of the broker/investment company. o Phone: the phone number of the broker/investment company. 6. Price History File Price History information can be displayed in a table available from the Security Table, and inserted or changed by a form. In addition, buying or selling shares may or may not create price history records, depending on the price history interval setting in the Global Settings File. Each date can only have a single associated price, so buying or selling shares may replace existing price history records. All activity logs contain price/dates, so there is no danger of losing activity information by changing the Price History File. The Price History File is just a tool to use for security analysis. The Price History File contains the following information: o Symbol: the security's symbol. (Copyright 1991 by David Lee Cohen) 20 Capital Gainz Users Manual o Date: the date associated with the price. o Price: the security's price on this date. 7. Global Settings Global settings allow you to maintain dynamic global information and also to customize Capital Gainz. The ASCII Global Settings File contains only a single record. The values that you can change, along with the shipped defaults, are: o Holding Period: the number of days that shares must be held in order to be classified as long term. This value is used to determine whether the gain/loss from a sale is classified as long term or short term, and also for categorizing long term/short term values in displays and reports. (Default = 365) o Confirm Add: if 'Y', you will be prompted for confirmation before a new record is written to disk. Actions that result in multiple records being added will always prompt for confirmation. (Default = 'N') o Confirm Update: if 'Y', you will be prompted for confirmation before a changed record is written to disk. Actions that result in multiple records being changed will always prompt for confirmation. (Default = 'N') o Confirm Delete: if 'Y', you will be prompted for confirmation before a record is deleted from disk. Actions that result in multiple records being deleted will always prompt for confirmation. (Default = 'Y') o Reinvest: if 'Y', you will be automatically prompted for share purchase information after a distribution is recorded. (Default = 'Y') o Log Transactions: if 'Y', transactions are logged to prevent file inconsistencies due to abnormal program termination during critical processing periods. This option results in varying degrees of performance degradation due to increased file I/O, and may not be tolerable on older/slower machines and disk drives. Note that this value is completely unrelated to activity logs. (Default = 'N') o Price History Interval: the interval for price history entries. If this value is 28, then price entries are saved (Copyright 1991 by David Lee Cohen) 21 Capital Gainz Users Manual every 28 days, or about every month. Thus, if you record purchases on 1/1, 1/15, and 1/31, only the 1/1 and 1/31 prices are saved in the Price History File. To save all price entries, enter 0 for this value. If you change this value to fewer days, prices are retrieved from the activity logs. You'll probably want to set the price history period to 7, for saving weekly entries, or 28, for saving monthly entries. Shorter intervals = more entries = more disk space required. (Default = 28) o Backup Command: the DOS command string executed when 'Backup' is selected from the main menu. (Default = 'CAPGNZBU A') o Append Reports: if 'Y', specifying a DOS file when printing a report will result in the report being appended to the file. Otherwise, the report will overwrite the original file without warning. (Default = 'Y') o Lines Per Page: the number of report lines to print on a single page. This will vary depending on the printer. (Default = 60) o Line Draw Chars: if 'Y', then the extended ASCII line drawing characters are used in reports. If your printer does not support these characters, enter 'N' to use the substitute characters '-' and '='. (Default = 'Y') o Colors: the colors for each grouped set of screens. (Defaults: intentionally omitted, thus deflecting criticism of my taste in colors) 8. Field Limits The following limits apply to any one record. The sum of multiple records may, of course, exceed these values. Open, Sold Shares: 0 - 999,999.9999 Open, Sold, Distribution Amount: 0 - 999,999.99 Open, Sold Price: 0 - 9,999.9999 Open, Sold Commission: 0 - 9,999.99 Distribution Per Share: 0 - 9,999.9999 (Copyright 1991 by David Lee Cohen) 22 Capital Gainz Users Manual D. Reports All reports are available from the Report Menu, except for the Open Information for Shares Sold Report, which is only available after selling shares. As indicated, reports may also be available from certain tables. Reports use the following global settings: o Append Report: if 'Y', a report directed to an existing DOS file is appended to the file. If 'N', the existing DOS file is overwritten without warning. o Lines Per Page: the number of printed lines on each page. o Line Draw Chars: if 'Y', then the extended ASCII line drawing characters are used. If your printer does not support these characters, enter 'N' to use the substitute characters '-' and '='. For the following reports, you can send output to the printer or an ASCII file: o Portfolio Report: shows current open values for each security in the portfolio. You can generate subtotals based on the broker/investment company. This report is also available from the Security Table. o Broker/Investment Company Report: shows information for all brokers/investment companies, along with managed securities and account numbers. This report is also available from the Broker/Investment Company Table. o Schedule B & D Reports: show Schedule B, Part II, and Schedule D, Parts I, II, and III. Present dividend, distribution, and selling information in a format easily transferrable to your tax form. You are prompted to input the tax year before printing. o Allocation Report: shows allocation percentages by Security Type. This report is also available from the Allocation Table. For the following reports, you can send output to the printer or an ASCII file, plus you can specify to print all or some securities and all or a range of dates: o Security Summary Report: shows the cumulative and short term open, sold, and distribution values along with gain/loss and total return for the specified period. This report is also (Copyright 1991 by David Lee Cohen) 23 Capital Gainz Users Manual available from the Security Summary. o Activity Detail Report: shows individual transactions from the activity logs, and a total for the specified period. All or a single log can be printed. The Open Shares Detail Report is also available from the Open Shares Log Table. The Sold Shares Detail Report is also available from the Sold Shares Log Table. The Distribution Detail Report is also available from the Distribution Log Table. o Price History Report: shows price history, along with distributions. High and low prices are flagged. This report is also available from the Price History Table. Finally, this report is only available after you sell shares: o Open Information for Shares Sold Report: after selecting the number of shares to sell, you can print out information resulting from the sale without actually committing the sale. All reports are terminated by a formfeed. Make sure your paper is lined up before printing, as Capital Gainz does not output an initial formfeed. (Copyright 1991 by David Lee Cohen) 24 Chapter III. - Main Menu The Main Menu offers the following choices: o Activity - go to the Activity Menu o Security - go to the Security Table o Reports - go to the Report Menu o Log Maintenance - go to the Log Maintenance Menu o Broker/Investment Company - go to the Broker/Investment Company Table o Global Settings - go to the Global Settings Form o Exit - exit from Capital Gainz Additional functions let you invoke the DOS Shell or execute the Backup command defined in the Global Settings Form. You select a choice by highlighting it and hitting ENTER, or simply by pressing the number/letter next to the choice. A checkmark is displayed next to the selected choice. Unlike other menus and forms, the ESC key will not exit you out of the Main Menu. You must explicitly choose the Exit function to terminate Capital Gainz. All of the functions available from the Main Menu are discussed in detail in the following chapters. (Copyright 1991 by David Lee Cohen) 25 Chapter IV. - Activity 'Activity' in Capital Gainz refers to buying shares, selling shares, or recording distributions. You reach the Activity Menu by selecting Activity on the Main Menu. From the Activity Menu, you can: o Buy Shares o Sell Shares o Record Distributions Each of these activities entails adding one or more activity records. You choose an activity by highlighting it and hitting ENTER. Alternatively, you can key in the number next to the desired choice. A checkmark is displayed next to your selected choice. From the Activity Menu, you can also invoke the DOS shell or hit ESCAPE to return to the Main Menu. A. Buy Shares To record a share purchase, you fill in the Buy Shares Form. This form displays the last entered symbol and the current or last entered date, then accepts: o The symbol of the security to purchase. If you leave this entry blank or enter an invalid symbol, the Security Lookup Table, described below, pops up. After a valid symbol is entered, the security's name and current price are displayed. o The date of the purchase. If the displayed date is correct, just hit the ENTER key. If you want a different date, just enter it over the displayed date. o The number of shares bought. This entry is multiplied by the displayed price, and the result is displayed as the purchase amount. o The purchase price for the security. This is the actual price, not including any commissions. You can accept the displayed price by hitting ENTER, or enter a different price. If all you have is a fractional figure, use the fraction-to-decimal chart displayed to convert it to a decimal value. On exiting this field, the amount field is (Copyright 1991 by David Lee Cohen) 26 Capital Gainz Users Manual updated to reflect the number of entered shares multiplied by the entered price. o The amount of the purchase, not including any commissions. Usually, the calculated and displayed value is correct and you can just hit ENTER. However, because of rounding, you may need to enter a different amount. o The commission or load charged on the purchase. o An optional 20 characters of notes concerning the purchase, so you can enter information such as 'DIV REINVEST' or 'IRA ROLLOVER'. As shown at the bottom of the screen, you can hit CNTL-ENTER to accept the form or CNTL-ESC to reject the form at any time. In order to accept a Buy Shares Form with CNTL-ENTER, the Symbol, Date, Shares, and Price fields must have valid entries. After entering all of the fields or hitting CNTL-ENTER, the buy record is written to disk. The field values stay the same, and the cursor goes back to the Symbol field. In other words, this form is repeatedly accepted until you explicitly exit from it. To remind you how many purchases you've recorded in the current session, a counter is displayed in the upper righthand corner of the form. A price history entry may or may not be added based on the entered price and date. See the Price History Section of Chapter V for detailed information on how a record is added to the Price History File. 1. Fractions to Decimal The Fraction-to-Decimal Table, a Show Table, displays decimal equivalents for fractions. This table is always displayed along with the Buy Shares Form. 2. Security Lookup The Security Lookup Table is brought up if you enter an invalid security symbol. For each security, this table shows the symbol, name, number of open shares, and last buy, sell, and distribution dates. This table is displayed instead of the Security Table, which only shows four securities at a time and is somewhat slower due to the calculations performed. (Copyright 1991 by David Lee Cohen) 27 Capital Gainz Users Manual If an invalid security had been entered, the cursor is positioned on the security symbol that best matches the entered symbol. Hitting ENTER selects the highlighted security. As shown at the bottom of the table, you can add securities with the INS key and delete securities with the DEL key. See Chapter V - Securities for details on adding, changing, and deleting securities. 3. Examples Several examples of purchases are given below. All of these examples use the following scenario. A mutual fund charges a 2% front-end load and you make the following purchases: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0000 50.00 1.00 2) 2/ 1/90 9.0909 5.5000 50.00 1.00 3) 3/ 1/90 10.5263 4.7500 50.00 1.00 Also, we'll assume that the long term holding period global setting is 365 days, or one year. In these examples, we'll use 1/15/91 as the current date. Notice in these examples how the purchase commission is factored into the gain/loss calculations. More details on the calculations employed by Capital Gainz are given in Chapter X - Analysis. a. Non-Category Selling Methods If the security does not use the Single or Double Category selling method, then the three open shares records have the following current gains: (current_price * open_shares) - open_amount - open_commission 1) (10.0000 * 6.00) - 50.00 - 1.00 = 9.00 (Long Term) 2) ( 9.0909 * 6.00) - 50.00 - 1.00 = 3.55 (Short Term) 3) (10.5263 * 6.00) - 50.00 - 1.00 = 12.16 (Short Term) ─────────────────── 24.70 (Total) These work out to percentage gains of: (Copyright 1991 by David Lee Cohen) 28 Capital Gainz Users Manual 1) ( 9.00/50.00) * 100 = 18.00% (Long Term) 2) ( 3.55/50.00) * 100 = 7.10% (Short Term) 3) (12.16/50.00) * 100 = 24.32% (Short Term) ───────────────────────────────────────── (24.70/150.00) * 100 = 16.47% (Total) b. Single Category Selling Method If the security uses the Single Category selling method, then the total open shares, open amount, and open commission maintained in the security's Security File record are 29.6172, 150.00, and 3.00. Thus, the basis price is: basis_amount/open_shares = 150.00/29.6172 = 5.0646 The open shares records are therefore treated as: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0646 50.65 1.00 2) 2/ 1/90 9.0909 5.0646 46.04 1.00 3) 3/ 1/90 10.5263 5.0646 53.31 1.00 As you can see, the purchase amounts still add up to $150.00, but the prices and amounts have been changed to reflect the average purchase price. The three open shares records have the following current gains: (current_price * open_shares) - basis_amount - open_commission 1) (10.0000 * 6.00) - 50.65 - 1.00 = 8.35 (Long Term) 2) ( 9.0909 * 6.00) - 46.04 - 1.00 = 7.51 (Short Term) 3) (10.5263 * 6.00) - 53.31 - 1.00 = 8.85 (Short Term) ─────────────────── 24.70 (Total) These work out to percentage gains of: 1) ( 8.35/50.65) * 100 = 16.49% (Long Term) 2) ( 7.51/46.04) * 100 = 16.31% (Short Term) 3) ( 8.85/53.31) * 100 = 16.60% (Short Term) ───────────────────────────────────────── (24.70/150.00) * 100 = 16.47% (Total) (Copyright 1991 by David Lee Cohen) 29 Capital Gainz Users Manual c. Double Category Selling Method If the security uses the Single Category selling method, then the total open shares, open amount, and open commission maintained in the security's Security File record are 29.6172, 150.00, and 3.00. The short term open shares, open amount, and open commission, also maintained in the security's Security File record, are 19.6172, 100, and 2.00. Thus, the short term basis price is: short_term_basis_amount/short_term_open_shares = 100.00/19.6172 = 5.0976 The long term basis price is: (total_basis_amount - short_term_basis_amount)/ (total_open_shares - short_term_open_shares) = (150.00 - 100.00)/(29.6172 - 19.6172) = 5.0000 The open shares records are therefore treated as: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0000 50.00 1.00 2) 2/ 1/90 9.0909 5.0976 46.34 1.00 3) 3/ 1/90 10.5263 5.0976 53.66 1.00 As you can see, the purchase amounts still add up to $150.00, but the prices and amounts have been changed to reflect the average purchase price for the long term and short term categories. The three open shares records have the following current gains: (current_price * open_shares) - basis_amount - open_commission 1) (10.0000 * 6.00) - 50.00 - 1.00 = 9.00 (Long Term) 2) ( 9.0909 * 6.00) - 46.34 - 1.00 = 7.21 (Short Term) 3) (10.5263 * 6.00) - 53.66 - 1.00 = 8.50 (Short Term) ────────────────── 24.70 (Total) These work out to percentage gains of: 1) ( 9.00/50.00) * 100 = 18.00% (Long Term) 2) ( 7.21/46.34) * 100 = 15.56% (Short Term) 3) ( 8.50/53.66) * 100 = 15.84% (Short Term) ────────────────────────────────────────── (24.70/150.00) * 100 = 16.47% (Total) (Copyright 1991 by David Lee Cohen) 30 Capital Gainz Users Manual B. Sell Shares To record the selling of shares, you fill in the Sell Shares Form. This form displays the last entered symbol and the current or last entered date, then accepts: o The symbol of the security to sell. If you leave this entry blank or enter an invalid symbol, the Security Lookup Table, described below, pops up. After a valid symbol is entered, the security's name, last selling method, current price, and number of open shares are displayed. o The date of the sale. If the displayed date is correct, just hit the ENTER key. If you want a different date, just enter it over the displayed date. o The selling method to use. These are described in detail below. The value in the security record is displayed, but this value can usually be changed. The only times that it can't be changed is when you've already sold shares using the Single or Double Category Methods. o The number of shares to sell. If the Specific Identity selling method is used, this figure is calculated based on the open shares selected to sell in the Select Shares to Sell Table. This table is described below in the discussion on the ID Sell Method. If the Double Category selling method is being used, you're asked whether to begin selling from the short term or long term shares. After the number of open shares to sell is entered or calculated, it's multiplied by the displayed price and the result is displayed as the sell amount. o The selling price for the security. This is the actual price, not including any commissions. You can accept the displayed price by hitting ENTER, or enter a different price. If all you have is a fractional figure, use the fraction-to-decimal chart displayed to convert it to a decimal value. On exiting this field, the amount field is updated to reflect the number of entered shares multiplied by the entered price. o The amount of the sale, not including any commissions. Usually, the calculated and displayed value is correct and you can just hit ENTER. However, because of rounding, you may need to enter a different amount. (Copyright 1991 by David Lee Cohen) 31 Capital Gainz Users Manual o The commission or load charged on the sale. o An optional 20 characters of notes concerning the sale, so you can enter information such as such as 'HOUSE PAYMENT' or 'TO PAY TAXES'. As shown at the bottom of the screen, you can hit CNTL-ENTER to accept the form or CNTL-ESC to reject the form at any time. In order to accept a Sell Shares Form with CNTL-ENTER, the Symbol, Date, Sell Method, Shares, and Price fields must have valid entries. After entering all of the fields or hitting CNTL-ENTER, a counter pops up as the open shares to sell are pulled from the open shares records into a temporary memory table. The Open Information for Shares Sold Table, a Show Table, shows the symbol, name, selling price, and affected open shares records for the security sold. You can scroll through the open shares records, each of which includes: o Purchase date o Open shares o Basis price, which is the same as the purchase price if a category selling method is not used o Basis amount, which is the same as the purchase amount if a category selling method is used o Purchase commission or load o Gain/loss from the entered sale The Shares, Amount, Commission, and Gain/Loss columns are totalled for the sale. Also, the average basis price is displayed. As shown at the bottom of the screen, you can print this table out to the printer or a file. The Open Information for Shares Sold Report is described below. After hitting ESC, CNTL-ESC, or CNTL-ENTER on the Open Information for Shares Sold Table, you are given the choice of confirming or canceling the sale. If you confirm the sale, a counter is displayed as the affected open shares records are closed. Notice that a single sale creates one or more sold shares records, corresponding to each related open shares record. If a selling commission was entered, it's assigned to the first sold shares record created. The affected open shares records are deleted or modified, depending on whether or not all of the record's open shares were sold. (Copyright 1991 by David Lee Cohen) 32 Capital Gainz Users Manual Following confirmation or cancellation of the sale, the Sell Shares Form is displayed with the cursor positioned on the Symbol field. In other words, this form is repeatedly accepted until you explicitly exit from it. To remind you how many sales you've confirmed in the current session, a counter is displayed in the upper righthand corner of the form. A price history entry may or may not added based on the entered price and date. See the Price History Section of Chapter V for detailed information on how a record is added to the Price History File. 1. Fractions to Decimal The Fraction-to-Decimal Table, a Show Table, displays decimal equivalents for fractions. This table is always displayed along with the Sell Shares Form. 2. Security Lookup The Security Lookup Table is brought up if you enter an invalid security symbol. For each security, this table shows the symbol, name, number of open shares, and last buy, sell, and distribution dates. This table is displayed instead of the Security Table, which only shows four securities at a time and is somewhat slower due to the calculations performed. If an invalid security had been entered, the cursor is positioned on the security symbol that best matches the entered symbol. Hitting ENTER selects the highlighted security. As shown at the bottom of the table, you can add securities with the INS key and delete securities with the DEL key. See Chapter V - Securities for details on adding, changing, and deleting securities. 3. Selling Methods The Sell Method Lookup Table is brought up if you enter an invalid selling method. Hitting ENTER selects the highlighted selling method. The available selling methods are first-in/first-out (FIFO), last- in/last-out (LIFO), maximize gains/minimize losses (MAX), minimize gains/maximize losses (MIN), identification (ID), single category average price (SCAT), and double category average price (DCAT). See Chapter XI - Detailed Information on Selling Methods for tax-related (Copyright 1991 by David Lee Cohen) 33 Capital Gainz Users Manual considerations. a. FIFO Sell Method The FIFO sell method causes the entered number of shares to be sold using the oldest open shares. The open shares records are scanned from oldest to most recent. b. LIFO Sell Method The LIFO sell method causes the entered number of shares to be sold using the most recent open shares. The open shares records are scanned from most recent to oldest. c. MAX Sell Method The MAX sell method causes the entered number of shares to be sold using the open shares with the lowest purchase prices. All open shares records are scanned. d. MIN Sell Method The MIN sell method causes the entered number of shares to be sold using the open shares with the highest purchase prices. All open shares records are scanned. e. ID Sell Method The ID sell method allows you to select open shares to sell from a table, with the number of shares to be sold set to the total number of open shares selected. The Select Open Shares to Sell Table shows a list of open shares, sorted in ascending purchase date order. Shown for each purchase are: o The purchase date o The basis price, which is the same as the purchase price if a category method is not being used o The number of open shares currently selected to sell o The number of open shares that would remain after the sale (Copyright 1991 by David Lee Cohen) 34 Capital Gainz Users Manual You select an entry in the list by highlighting it and hitting the ENTER key, which causes the Enter Shares Form to be called up for you to enter the number of shares to sell. The Enter Number of Shares to Sell Form is called up by hitting the ENTER key from the Open Shares Select Table. This form shows the number of shares for the purchase, and you enter the number of shares to sell from that particular purchase. If no shares have been selected to sell from the purchase, the Shares to Sell field is initialized to the number of open shares in the purchase. If you already elected to sell some shares from that purchase, then the Shares to Sell field is set to the currently selected number of shares. Upon completion, the Select Shares to Sell Table is updated to reflect the change. f. SCAT Sell Method The single category method uses the average price of all open shares as the basis, and the entered number of shares are sold beginning with the oldest shares. This method is only valid for mutual funds, and can't be changed later. Chapter XI - Detailed Information on Selling Methods, discusses the average, or category, methods in detail. g. DCAT Sell Method The double category method divides the open shares into short term and long term categories, and the average price of all shares in each category is used. This method is only valid for mutual funds and can't be changed later. The Sell From Double Category Form pops up after entering the number of shares to sell on the Sell Shares Form if the security uses the Double Category selling method. You can choose to begin selling shares from the long term or the short term category. If the number of shares in the chosen category is less than the total number of shares to sell, the excess shares to sell will be taken from the other category. Shares are sold beginning with the oldest shares in each category. Chapter XI - Detailed Information on Selling Methods, discusses the average, or category, methods in detail. One more comment is in order for the double category selling method. At program initialization, Capital Gainz looks at the system clock and 'migrates' any shares that have changed from short term to long term. This process involves updating the security record's values. Shares are also migrated - or 'demigrated' - when you change the holding period global setting. (Copyright 1991 by David Lee Cohen) 35 Capital Gainz Users Manual h. Open Information for Shares Sold Report After choosing the Print function from the Show Information for Shares Sold Table, you first select the device to print to with the Device Form: 'PRN' represents the printer device. If you selected File, then enter the DOS file name: The report generated is similar to the Open Information for Shares Sold Table: The Open Information for Shares Sold Report, like the Open Information for Shares Sold Table, shows the symbol, name, selling price, and affected open shares records for the security sold. You can scroll through the open shares records, each of which includes: o Purchase date o Open shares o Basis price, which is the same as the purchase price if a category method is not being used o Basis amount, which is the same as the purchase amount if a category method is not being used o Purchase commission or load o Gain/loss from the entered sale The Shares, Amount, Commission, and Gain/Loss columns are totalled for the sale. Also, the average basis price is printed. 4. Examples Examples for each selling method are given below. All of these examples use the following scenario. A mutual fund charges a 2% front-end load and you make the following purchases: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0000 50.00 1.00 2) 2/ 1/90 9.0909 5.5000 50.00 1.00 3) 3/ 1/90 10.5263 4.7500 50.00 1.00 (Copyright 1991 by David Lee Cohen) 36 Capital Gainz Users Manual In these examples, we assume you sold 15 shares at $6.00 per share on 1/15/91. For illustration, let's say the fund also charges a 1% back- end load, which comes out to (15 * 6.00 * .01) = .90. Also, we'll assume that the long term holding period global setting is 365 days, or one year. A few important points to notice in these examples: o The selling commission is only applied to the first sold shares record created - which may or may not correspond to the earliest dated purchase for the sale o Both the purchase and selling commissions are factored into the gain/loss calculations o When some of an open shares record's shares are sold, the entire purchase commission is used in the resulting sold shares record Since I don't show any of the notes in these examples, here's what happens to them: o Any selling notes specified are included in all of the sold shares records created o Any purchase notes are gone when all of the open shares in the record are sold Details on the calculations employed by Capital Gainz are given in Chapter X - Analysis. a. FIFO Selling Method Selling 15 shares using the First-In/First-Out selling method results in the creation of the following sold shares records (the '#' column corresponds to the open shares records): # Date Shares Price Amount Close Open Open Open Sold Comm Date Basis Comm 1) 1/15/91 10.0000 6.0000 60.00 0.90 1/ 1/90 50.00 1.00 2) 1/15/91 5.0000 6.0000 30.00 0.00 2/ 1/90 27.50 1.00 The open basis for the first record is simply the open amount from the first open shares record. The open basis for the next record is derived by multiplying the number of shares sold by the purchase price of the second open shares record: (15.0000 - 10.0000) * 5.50 = 27.50 (Copyright 1991 by David Lee Cohen) 37 Capital Gainz Users Manual These two sold shares records' gains are calculated with: sold_amount - basis_amount - sold_commission - open_commission 1) 60.00 - 50.00 - 0.90 - 1.00 = 8.10 (Long Term) 2) 30.00 - 27.50 - 0.00 - 1.00 = 1.50 (Short Term) ────────────────── 9.60 (Total) These work out to percentage gains of: 1) ( 8.10/50.00) * 100 = 16.20% (Long Term) 2) ( 1.50/27.50) * 100 = 5.45% (Short Term) ───────────────────────────────────────── ( 9.60/77.50) * 100 = 12.39% (Total) The open shares records remaining after selling the 15 shares are: # Date Shares Price Amount Open Bought Commission 2) 2/ 1/90 4.0909 5.5000 22.50 0.00 3) 3/ 1/90 10.5263 4.7500 50.00 1.00 The first record was removed, since all of the open shares were sold. The second open shares record was changed to reflect the sale of 5.0000 shares. b. LIFO Selling Method Selling 15 shares using the Last-In/Last-Out selling method results in the creation of the following sold shares records (the '#' column corresponds to the open shares records): # Date Shares Price Amount Close Open Open Open Sold Comm Date Basis Comm 3) 1/15/91 10.5263 6.0000 63.16 0.90 3/ 1/90 50.00 1.00 2) 1/15/91 4.4737 6.0000 26.84 0.00 2/ 1/90 24.61 1.00 The open basis for the first record is simply the open amount of the third open shares record. The open basis for the second record is derived by multiplying the number of shares sold by the purchase price of the second open shares record: (15.0000 - 10.5263) * 5.50 = 24.61 These two sold shares records' gains are calculated with: sold_amount - basis_amount - sold_commission - open_commission (Copyright 1991 by David Lee Cohen) 38 Capital Gainz Users Manual 3) 63.16 - 50.00 - 0.90 - 1.00 = 11.26 (Short Term) 2) 26.84 - 24.61 - 0.00 - 1.00 = 1.23 (Short Term) ────────────────── 12.49 (Total) These work out to percentage gains of: 3) (11.26/50.00) * 100 = 22.52% (Short Term) 2) ( 1.23/24.61) * 100 = 5.00% (Short Term) ───────────────────────────────────────── (12.49/74.61) * 100 = 16.74% (Total) The open shares records remaining after selling the 15 shares are: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0000 50.00 1.00 2) 2/ 1/90 4.6172 5.5000 25.39 0.00 The third record was removed, since all of the open shares were sold. The second open shares record was changed to reflect the sale of 4.4737 shares. c. MAX Selling Method Selling 15 shares using the Maximum Gain/Minimum Loss selling method results in the creation of the following sold shares records (the '#' column corresponds to the open shares records): # Date Shares Price Amount Close Open Open Open Sold Comm Date Basis Comm 3) 1/15/91 10.5263 6.0000 63.16 0.90 3/ 1/90 50.00 1.00 1) 1/15/91 4.4737 6.0000 26.84 0.00 1/ 1/90 22.37 1.00 The open basis for the first record is simply the open amount of the third open shares record. The open basis for the next record is derived by multiplying the number of shares sold by the purchase price of the first open shares record: (15.0000 - 10.5263) * 5.00 = 22.37 These two sold shares records' gains are calculated with: sold_amount - basis_amount - sold_commission - open_commission 3) 63.16 - 50.00 - 0.90 - 1.00 = 11.26 (Short Term) 1) 26.84 - 22.37 - 0.00 - 1.00 = 3.47 (Long Term) ────────────────── 14.73 (Total) (Copyright 1991 by David Lee Cohen) 39 Capital Gainz Users Manual These work out to percentage gains of: 3) (11.26/50.00) * 100 = 22.52% (Short Term) 1) ( 3.47/22.37) * 100 = 15.51% (Long Term) ───────────────────────────────────────── (14.73/72.37) * 100 = 20.35% (Total) The open shares records remaining after selling the 15 shares are: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 5.5263 5.0000 27.63 0.00 2) 2/ 1/90 9.0909 5.5000 50.00 1.00 The third record was removed, since all of the open shares were sold. The first open shares record was changed to reflect the sale of 4.4737 shares. Notice that the Maximum Gain/Minimum Loss selling method bases its decision-making on the purchase price only, and does not consider open commissions. However, open commissions would rarely make a difference anyway. d. MIN Selling Method Selling 15 shares using the Maximum Loss/Minimum Gain selling method results in the creation of the following sold shares records (the '#' column corresponds to the open shares records): # Date Shares Price Amount Close Open Open Open Sold Comm Date Basis Comm 2) 1/15/91 9.0909 6.0000 54.55 0.90 2/ 1/90 50.00 1.00 1) 1/15/91 5.9091 6.0000 35.45 0.00 1/ 1/90 29.55 1.00 The open basis for the first record is simply the open amount of the second open shares record. The open basis for the next record is derived by multiplying the number of shares sold by the purchase price of the first open shares record: (15.0000 - 9.0909) * 5.00 = 29.55 These two sold shares records' gains are calculated with: sold_amount - basis_amount - sold_commission - open_commission 2) 54.55 - 50.00 - 0.90 - 1.00 = 2.65 (Short Term) 1) 35.45 - 29.55 - 0.00 - 1.00 = 4.90 (Long Term) ───────────────── 7.55 (Total) (Copyright 1991 by David Lee Cohen) 40 Capital Gainz Users Manual These work out to percentage gains of: 2) ( 2.65/50.00) * 100 = 5.30% (Short Term) 1) ( 4.90/29.55) * 100 = 16.58% (Long Term) ───────────────────────────────────────── ( 7.55/79.55) * 100 = 9.49% (Total) The open shares records remaining after selling the 15 shares are: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 4.0909 5.0000 20.45 0.00 3) 3/ 1/90 10.5263 4.7500 50.00 1.00 The second record was removed, since all of the open shares were sold. The first open shares record was changed to reflect the sale of 5.9091 shares. Notice that the Maximum Loss/Minimum Gain selling method bases its decision-making on the purchase price only, and does not consider open commissions. However, open commissions would rarely make a difference anyway. e. Single Category Selling Method Example Using the example purchases, the total open shares, open amount, and open commission, maintained in the security's Security File record, are 29.6172, 150.00, and 3.00. Thus, the basis price for a sale using the Single Category selling method is: basis_amount/open_shares = 150.00/29.6172 = 5.0646 The open shares records are therefore treated as: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0646 50.65 1.00 2) 2/ 1/90 9.0909 5.0646 46.04 1.00 3) 3/ 1/90 10.5263 5.0646 53.31 1.00 As you can see, the purchase amounts still add up to $150.00, but the prices and amounts have been changed to reflect the average purchase price. Selling 15 shares using the Single Category selling method results in the creation of the following sold shares records (the '#' column corresponds to the open shares records): (Copyright 1991 by David Lee Cohen) 41 Capital Gainz Users Manual # Date Shares Price Amount Close Open Open Open Sold Comm Date Basis Comm 1) 1/15/91 10.0000 6.0000 60.00 0.60 1/ 1/90 50.65 1.00 2) 1/15/91 5.0000 6.0000 30.00 0.00 2/ 1/90 25.32 1.00 The basis amount and basis price for the open shares are used in the sold shares records instead of the actual purchase amount and price. The open basis for the first record is simply the basis amount for the first open shares record. The open basis for the next record is derived by multiplying the number of shares sold by the basis price of the second open shares record: (10.0000 - 5.0000) * 5.0646 = 25.32 These two sold shares records' gains are calculated with: sold_amount - basis_amount - sold_commission - open_commission 1) 60.00 - 50.65 - 0.90 - 1.00 = 7.45 (Long Term) 2) 30.00 - 25.32 - 0.00 - 1.00 = 3.68 (Short Term) ────────────────── 11.13 (Total) These work out to percentage gains of: 1) ( 7.45/50.65) * 100 = 14.71% (Long Term) 2) ( 3.68/25.32) * 100 = 14.53% (Short Term) ───────────────────────────────────────── (11.13/75.97) * 100 = 14.65% (Total) The open shares records remaining after selling the 15 shares are: # Date Shares Price Amount Open Bought Commission 2) 2/ 1/90 4.0909 5.5000 22.50 0.00 3) 3/ 1/90 10.5263 4.7500 50.00 1.00 The first record was removed, since all of the open shares were sold. The second open shares record was changed to reflect the sale of 5.0000 shares. The original shares/price relationship was preserved, so the open amount for the shares sold was not simply subtracted from the open amount. The Security File record for this security contains these values: total open shares : 14.6172 total open amount : 74.03 total open commission: 1.00 As you can see, once shares are sold, the price and amount in the open shares records are not meaningful for securities that use a category method. The important values are maintained in the Security File. In (Copyright 1991 by David Lee Cohen) 42 Capital Gainz Users Manual essence, the open shares are treated as: # Date Shares Price Amount Open Bought Commission 2) 2/ 1/90 4.0909 5.0646 20.72 0.00 3) 3/ 1/90 10.5263 5.0646 53.31 1.00 f. Double Category Selling Method Example Using the example purchases, the total open shares, open amount, and open commission, maintained in the security's Security File record, are 29.6172, 150.00, and 3.00. The short term open shares, open amount, and open commission, also maintained in the security's Security File record, are 19.6172, 100, and 2.00. Thus, the short term basis price for a sale using the Single Category selling method is: short_term_basis_amount/short_term_open_shares = 100.00/19.6172 = 5.0976 The long term basis price is: (total_basis_amount - short_term_basis_amount)/ (total_open_shares - short_term_open_shares) = (150.00 - 100.00)/(29.6172 - 19.6172) = 5.0000 The open shares records are therefore treated as: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0000 50.00 1.00 2) 2/ 1/90 9.0909 5.0976 46.34 1.00 3) 3/ 1/90 10.5263 5.0976 53.66 1.00 As you can see, the purchase amounts still add up to $150.00, but the prices and amounts have been changed to reflect the average purchase price for the long term and short term categories. Selling 15 shares using the Double Category selling method, specifying to sell long term shares first, results in the creation of the following sold shares records (the '#' column corresponds to the open shares records): # Date Shares Price Amount Close Open Open Open Sold Comm Date Basis Comm 1) 1/15/91 10.0000 6.0000 60.00 0.90 1/ 1/90 50.00 1.00 2) 1/15/91 5.0000 6.0000 30.00 0.00 2/ 1/90 25.49 1.00 The basis amount and basis price for the open shares are used in the (Copyright 1991 by David Lee Cohen) 43 Capital Gainz Users Manual sold shares records instead of the actual purchase amount and price. The open basis for the first record is simply the basis amount for the first open shares record. The open basis for the next record is derived by multiplying the number of shares sold by the basis price of the second open shares record: (10.0000 - 5.0000) * 5.0976 = 25.49 These two sold shares records' gains are calculated with: sold_amount - basis_amount - sold_commission - open_commission 1) 60.00 - 50.00 - 0.90 - 1.00 = 8.10 (Long Term) 2) 30.00 - 25.49 - 0.00 - 1.00 = 3.51 (Short Term) ────────────────── 11.61 (Total) These work out to percentage gains of: 1) ( 8.10/50.00) * 100 = 16.20% (Long Term) 2) ( 3.51/25.49) * 100 = 13.77% (Short Term) ───────────────────────────────────────── (11.61/75.49) * 100 = 15.38% (Total) The open shares records remaining after selling the 15 shares are: # Date Shares Price Amount Open Bought Commission 2) 2/ 1/90 4.0909 5.5000 22.50 0.00 3) 3/ 1/90 10.5263 4.7500 50.00 1.00 The first record was removed, since all of the open shares were sold. The second open shares record was changed to reflect the sale of 5.0000 shares. The original shares/price relationship was preserved, so the open amount for the shares sold was not simply subtracted from the open amount. The Security File record for this security contains these values: total open shares : 14.6172 total open amount : 74.51 total open commission : 1.00 short term open shares : 0 short term open amount : 0 short term open commission : 0 As you can see, once shares are sold, the price and amount in the open shares records are not meaningful for securities that use a category method. The important values are maintained in the Security File. In essence, the open shares are treated as (rounding changed the share price from 5.0976 to 5.0974): (Copyright 1991 by David Lee Cohen) 44 Capital Gainz Users Manual # Date Shares Price Amount Open Bought Commission 2) 2/ 1/90 4.0909 5.0974 20.85 0.00 3) 3/ 1/90 10.5263 5.0974 53.66 1.00 If you specify to sell the short term shares first, you get the following sold shares records: # Date Shares Price Amount Close Open Open Open Sold Comm Date Basis Comm 2) 1/15/91 9.0909 6.0000 54.55 0.90 2/ 1/90 46.34 1.00 3) 1/15/91 5.9091 6.0000 35.45 0.00 3/ 1/90 30.12 1.00 These two sold shares records' gains are: 2) 54.55 - 46.34 - 0.90 - 1.00 = 6.31 (Short Term) 3) 35.45 - 30.12 - 0.00 - 1.00 = 4.33 (Short Term) ────────────────── 10.64 (Total) These work out to percentage gains of: 2) ( 6.31/46.34) * 100 = 13.62% (Short Term) 3) ( 4.33/30.12) * 100 = 14.38% (Short Term) ───────────────────────────────────────── (10.64/76.46) * 100 = 13.92% (Total) The open shares records remaining after selling the 15 shares are: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0000 50.00 1.00 3) 3/ 1/90 4.6172 4.7500 21.93 0.00 The Security File record for this security contains these values: total open shares : 14.6172 total open amount : 73.54 total open commission : 1.00 short term open shares : 4.6172 short term open amount : 23.54 short term open commission : 0 In essence, the open shares are treated as (rounding changed the share price from 5.0976 to 5.0983): # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 10.0000 5.0000 50.00 1.00 3) 3/ 1/90 4.6172 5.0983 23.54 0.00 (Copyright 1991 by David Lee Cohen) 45 Capital Gainz Users Manual g. ID Selling Method Say you decided to sell 5 shares from each of the three purchases using the Specific Identity selling method. This results in the creation of the following sold shares records (the '#' column corresponds to the open shares records): # Date Shares Price Amount Close Open Open Open Sold Comm Date Basis Comm 1) 1/15/91 5.0000 6.0000 30.00 0.90 1/ 1/90 25.00 1.00 2) 1/15/91 5.0000 6.0000 30.00 0.00 2/ 1/90 27.50 1.00 3) 1/15/91 5.0000 6.0000 30.00 0.00 3/ 1/90 23.75 1.00 The open basis for each record is derived by multiplying the number of shares sold by the purchase price of the open shares record: 1) 5.0000 * 5.00 = 25.00 2) 5.0000 * 5.50 = 27.50 3) 5.0000 * 4.75 = 23.75 These sold shares records' gains are calculated with: sold_amount - basis_amount - sold_commission - open_commission 1) 30.00 - 25.00 - 0.90 - 1.00 = 3.10 (Long Term) 2) 30.00 - 27.50 - 0.00 - 1.00 = 1.50 (Short Term) 3) 30.00 - 23.75 - 0.00 - 1.00 = 5.25 (Short Term) ────────────────── 9.85 (Total) Notice here how selling shares from 3 purchases includes 3 open commissions in the gain/loss calculation. The percentage gains are: 1) ( 3.10/25.00) * 100 = 12.40% (Long Term) 2) ( 1.50/27.50) * 100 = 5.45% (Short Term) 3) ( 5.25/23.75) * 100 = 22.11% (Short Term) ───────────────────────────────────────── ( 9.85/76.25) * 100 = 12.92% (Total) The open shares records remaining after selling the 15 shares are: # Date Shares Price Amount Open Bought Commission 1) 1/ 1/90 5.0000 5.0000 25.00 0.00 2) 2/ 1/90 4.0909 5.5000 22.50 0.00 3) 3/ 1/90 5.5263 4.7500 26.25 0.00 Each open shares record was changed to reflect the sale of 5.0000 shares. (Copyright 1991 by David Lee Cohen) 46 Capital Gainz Users Manual h. Compare Examples In this example, the selling methods resulted in the following: MAX : Gain of $14.73 +20.35% LIFO : Gain of $12.49 +16.74% DCAT, Long Term : Gain of $11.61 +15.38% SCAT : Gain of $11.13 +14.65% DCAT, Short Term: Gain of $10.64 +13.92% ID : Gain of $ 9.85 +12.92% FIFO : Gain of $ 9.60 +12.39% MIN : Gain of $ 7.55 + 9.49% Of course, this best-to-worst ordering is only valid for these examples, and your mileage may vary. But, this gives you an idea of your selling options and their varied results. C. Record Distribution To record a distribution, you fill in the Record Distribution Form. This form displays the last entered symbol, the current or last entered date, and the DIV distribution type. You then enter: o The symbol of the security for the distribution. If you leave this entry blank or enter an invalid symbol, the Security Lookup Table, described below, pops up. After a valid symbol is entered, the security's name is displayed. o The date of the distribution. If the displayed date is correct, just hit the ENTER key. If you want a different date, just enter it over the displayed date. o The type of the distribution. If you enter an invalid type, or leave the field blank, the Distribution Type Lookup Table pops up. Distribution types are discussed in detail below. o The total amount of the distribution. If you are entering a FEE, just enter the amount and Capital Gainz will know that it's negative. After entry, this value is divided by the number of open shares of the security to get an approximate distribution per share figure. This per share figure may be incorrect due to rounding and partial dividends for funds not held during the entire period. o The distribution per share. This field is not entered for FEEs. The distribution per share figure directly affects the Current Yield calculation. (See Chapter X - Analysis for (Copyright 1991 by David Lee Cohen) 47 Capital Gainz Users Manual details.) Capital Gainz makes a best guess at it by dividing the distribution amount by the number of open shares. You should enter the actual per share amount of the distribution as shown in your security's distribution notice. o An optional 20 characters of notes concerning the distribution, so you can enter information such as 'QUARTERLY DIVIDEND' or 'ANNUAL CAP GAINS'. As shown at the bottom of the screen, you can hit CNTL-ENTER to accept the form or CNTL-ESC to reject the form at any time. In order to accept a Record Distribution Form with CNTL-ENTER, the Symbol, Date, and Amount fields must have valid entries. To remind you how many distributions you've made in the current session, a counter is displayed in the upper righthand corner of the form. After entering all of the fields or hitting CNTL-ENTER, the distribution record is written to disk. Then, if you specified 'Y' for the Reinvest value in the Global Settings Form, you are asked if you want to reinvest the distribution. If you specified 'N' for the Reinvest value, the cursor goes back to the Symbol field on the Record Distribution Form. In other words, this form is repeatedly accepted until you explicitly exit from it. The Reinvest Form shows the symbol and name of the security, and asks if you want to reinvest the distribution. If you do want to reinvest, you enter the reinvestment price. Again, the Fraction-to- Decimal Table gives you a handy fractions-to-decimal value table. After entering the price, the Buy Shares Form is brought up with all of the fields filled in. The shares field is calculated by dividing the distribution amount by the reinvestment price. You may need to change it to account for rounding. The notes field is initialized to 'REINVEST <distribution type>', where <distribution type> is 'DIV' (dividends), 'LTCG' (long term capital gains), or 'STCG' (short term capital gains). After completing the Buy Shares Form, the cursor goes back to the Symbol field on the Record Distribution Form. 1. Security Lookup The Security Lookup Table is brought up if the you enter an invalid security symbol. For each security, this table shows the symbol, name, number of open shares, and last buy, sell, and distribution dates. This table is displayed instead of the Security Table, which only shows four securities at a time and is somewhat slower due to calculations performed. (Copyright 1991 by David Lee Cohen) 48 Capital Gainz Users Manual If an invalid security had been entered, the cursor is positioned on the security symbol that best matches the entered symbol. Hitting ENTER selects the highlighted security. As shown at the bottom of the table, you can add securities with the INS key and delete securities with the DEL key. See Chapter V - Securities for details on adding, changing, and deleting securities. 2. Distribution Types The Distribution Type Lookup Table is brought up if you enter an invalid distribution type. Hitting ENTER selects the highlighted distribution type. a. Dividend Distribution Type The dividend distribution type, DIV, is used to record dividends. If the security's number of dividends per year value is 0 when a dividend is recorded, it is changed to 1. b. Short Term Capital Gains Distribution Type The short term capital gains distribution type, STCG, is used to record short term capital gains distributions. Your broker/investment company statement that you receive in the mail should indicate whether a capital gains distribution is short term or long term. If the statement does not indicate if the distribution was long term or short term gains, you should assume it was long term gains. c. Long Term Capital Gains Distribution Type The long term capital gains distribution type, LTCG, is used to record long term capital gain distributions. The broker/investment company statement that you receive in the mail should indicate whether a capital gains distribution is short term or long term. If the statement does not indicate if the distribution was long term or short term gains, you should assume it was long term gains. d. Fees The fee type, FEE, is used to record miscellaneous fees, such as an IRA maintenance fee, which can't be associated with a specific share purchase or sale. This type is recorded under distributions because its infrequent use does not warrant a separate log or screen group, and the necessary information is analogous to the information saved for other distribution types. Enter a positive number for this value, as Capital Gainz knows to subtract it from totals. Per share (Copyright 1991 by David Lee Cohen) 49 Capital Gainz Users Manual amounts are not entered for this distribution type. Since fees don't factor into any gain/loss calculations, they really only serve a note-keeping function. If you want to exclude purchase or selling commissions from gain/loss calculations, but still want to record them somewhere, you can enter them as FEEs. 3. Example For example, say a mutual fund makes the following distributions and charges the following fees: # Date Amount Per Share Type 1) 1/ 1/90 7.20 0.24 Dividend 2) 2/ 1/90 0.90 0.03 Long Term Capital Gain 3) 3/ 1/90 5.00 Fee Assume the shares are selling at $6.00 each, and the mutual fund distributes dividends semi-annually. The current yield is: ((dividend_per_share * dividends_per_year)/price) * 100 = ((0.24 * 2)/6.00) * 100 = 8.00% From this example, you can see the importance of the 'dividends per year' figure associated with a security through the Security Form. Also, notice that no per share value is associated with a Fee. Now let's assume that the initial share purchase was on 1/1/90 at $5.00 per share. The current share price, on 1/15/91, is $6.00 per share. The total return for the mutual fund over the period over the period is: ((end_price - beg_price + distr_per_share)/beg_price) * 100 = ((6.00 - 5.00 + 0.27)/5.00) * 100 = 25.40% More details on the calculations employed by Capital Gainz are given in Chapter X - Analysis. (Copyright 1991 by David Lee Cohen) 50 Capital Gainz Users Manual Chapter V. - Securities A. Security Table The Security Table, brought up from the Main Menu, shows three lines of information for each security, with securities listed in alphabetical order by symbol. The values displayed for each security are: o Symbol o Security name, plus '(IRA)' if you specified that the security was held in an IRA or other tax deferred program o Last price and last price date o Current number of open shares o Current yield o Average purchase price for the open shares o Current value of open shares o Current open share gain/loss amount and percentage Also, portfolio totals are displayed at the bottom of the screen for: o Total value of open shares for all securities o Total gain/loss amount and percentage for all securities The Current Yield, Average Price, Value, and Gain/Loss calculations are discussed in detail in Chapter X - Analysis. You may see a discrepancy between the open value and gain/loss figures in the Security Table and the Open Shares Log or Open Shares Detail Report. For the sake of expediency, the Security Table multiplies the cumulative number of shares by the current price to get the total open value. However, the Open Shares Log and the Open Shares Detail Report do a record by record calculation, rounding each individual record's open value. At the bottom of the Security Table is a horizontally scrollable (Copyright 1991 by David Lee Cohen) 51 row of functions. Using function keys, you can: o Add a security o Change the highlighted security o Delete the highlighted security o Update the prices of all securities o View the open/close/distribution summary for the highlighted security o Print the portfolio report o 'Fixup' the open totals for the highlighted security o Execute a share split for the highlighted security o View the price history for the highlighted security o View the portfolio allocation by security type Each of these functions are described below. B. Add a Security The Security Form is brought up to add a security when you hit the INS key while viewing the Security Table. The fields in the Security Form are: o The symbol for the security. This is a good, short hand tag, and is used in most of the other forms and screens. For stocks, you probably want to enter the symbol used in the newspaper's stock exchange listings. o The full, descriptive name of the security. o The broker/investment company responsible for selling and/or holding the shares. For stocks and bonds, this will be a broker or the actual company. For mutual funds, this will be the mutual fund investment company or a broker. This name provides a link to the Broker/Investment Company File, which contains addresses and phone numbers. If you leave this entry blank or enter an invalid name, the Broker/Investment Company Lookup Table pops up. This table is described later. o Account number. For stocks and bonds, this will be your brokerage account number or company dividend reinvestment (Copyright 1991 by David Lee Cohen) 52 Capital Gainz Users Manual plan number. For mutual funds, this will be your fund's account number or a brokerage account number. o Security type code. This serves to categorize the security. If you enter an invalid type code, or leave it blank, the Security Type Lookup Table pops up. This table is described below. After entering or choosing a security type, the security type's description is displayed on the Security Form. o Dividends per year. This is the number of dividend payouts per year, and is usually 12 (monthly) for bonds and bond mutual funds, 2 (bi-annually) for income-oriented stock mutual funds, and 4 (quarterly) for stocks. In order to get an accurate Current Yield calculation (see Chapter X - Analysis), this figure must be correct. If you enter 0, but later record a dividend for the security, this value is automatically changed to 1. o Selling method. Entering a blank or invalid selling method causes the Sell Method Lookup Table to pop up. This table is described below. After entering or selecting a selling method, the selling method's description is displayed. o Tax exempt status. If this security is held in an IRA, Keough, or pension plan, it's probably tax exempt. The Schedule B and D Reports rely on this value, and skip over any securities that are marked as tax exempt. The Security Table appends '(IRA)' to a security flagged as tax exempt. Note that a tax exempt security is different than a security whose dividends are tax free. Tax free status is built into the security type chosen. o Price and price date of the security. These optional fields give you a convenient way to make the first price history entry when adding a security. As shown at the bottom of the screen, you can hit CNTL-ENTER to accept the form or CNTL-ESC to reject the form at any time. In order to accept a Security Form with CNTL-ENTER, the Symbol, Name, Broker/Investment Company, Type, Dividends/Year, and Sell Method fields must have valid entries. After entering all of the fields or hitting CNTL-ENTER, the security record is added. When you're finished with the Security Form, you are returned to the Security Table, and the just added security is highlighted. (Copyright 1991 by David Lee Cohen) 53 Capital Gainz Users Manual C. Change a Security The Security Form is brought up to change the highlighted security when you hit the ENTER key while viewing the Security Table. The Security Form, described in the Add a Security section, is initialized to the current values of the security to be changed. As shown at the bottom of the screen, you can hit CNTL-ENTER to accept the form or CNTL-ESC to reject the form at any time. In order to accept a Security Form with CNTL-ENTER, the Symbol, Name, Broker/Investment Company, Type, Dividends/Year, and Sell Method fields must have valid entries. After entering all of the fields or hitting CNTL-ENTER, the security record is changed. If you changed the security's symbol, all of the security's open shares, sold shares, and distribution log records are also changed. When you're finished with the Security Form, you are returned to the Security Table, and the just changed security is highlighted. D. Delete a Security The Security Form is brought up to delete the highlighted security when you hit the DEL key while viewing the Security Table. The Security Form, described in the Add a Security section, is initialized to the current values of the security to be deleted. Hit ENTER or CNTL-ENTER to delete the record, or ESC or CNTL-ESC to exit. After hitting ENTER or CNTL-ENTER, you are warned that all related activity records will also be deleted. Confirmation is required regardless of the Confirm Delete global setting, since many records could be affected. When you're finished with the Security Form, you are returned to the Security Table, and the security after the one just deleted is highlighted. 1. Security Types The Security Type Lookup Table is brought up automatically if you enter a blank or invalid security type code. Hitting ENTER selects the highlighted security type. Capital Gainz provides a number of security types to choose from. Some are as general as 'Mutual Fund', while other are as specific as 'Small Company Stock Fund'. You can stick with the broad categories or use the narrower ones - it's up to you. Capital Gainz offers the following security types, divided into categories: (Copyright 1991 by David Lee Cohen) 54 Capital Gainz Users Manual Stocks: o Stock - any type of stock. o Small Company Stock - a small company stock, typically traded in the over-the-counter market or on the American Stock Exchange (AMEX). o Large Company Stock - a large company stock, typically traded on the New York Stock Exchange (NYSE). o Foreign Stock - a stock that trades on a foreign exchange, or on a local exchange with American depository receipts (ADRs). o Gold/Mining Stock - a gold or other precious mineral mining company. Stock Funds: o Stock Fund - a mutual fund investing in any type of stocks. o Income Stock Fund - a mutual fund investing in income- oriented stocks (similar to Large Company Stock Fund). o Growth Stock Fund - a mutual fund investing in growth- oriented stocks (similar to Small Company Stock Fund). o Large Company Stock Fund - a mutual fund investing in large company stocks (similar to Income Stock Fund). o Small Company Stock Fund - a mutual fund investing in small company stocks (similar to Growth Stock Fund). o Foreign Stock Fund - a mutual fund investing in foreign company stocks. o Global Stock Fund - a mutual fund investing both locally and in foreign company stocks. o Stock Index Fund - a mutual fund mirroring one of the major stock indices, such as the S&P 500. o Gold/Mining Stock Fund - a mutual fund investing in gold or other precious mineral mining companies. o Sector Fund - a mutual fund specializing in a particular industry segment, such as health care or utilities. o Closed-End Stock Fund - a closed-end, as opposed to open- (Copyright 1991 by David Lee Cohen) 55 Capital Gainz Users Manual end, mutual fund investing in stocks. Usually trades like a stock on one of the exchanges. Bonds: o Bond - any type of bond. o Long Term Bond - a long term corporate bond, typically maturing in 15 to 25 years. o Medium Term Bond - a medium term corporate bond, typically maturing in 5 to 15 years. o Short Term Bond - a short term corporate bond, typically maturing in 1 to 5 years. o Tax Free Municipal Bond - a bond issued by a state agency or authority, dividends are usually free from federal tax, and possibly from state and local taxes. Dividends from this security type are assumed to be tax free when generating the Schedule B Report. o Treasury Bill - 13, 26, or 52 week treasury obligation, generally exempt from state and local taxes. o Treasury Note - treasury obligation ranging from 1 to 10 years, generally exempt from state and local taxes. o Treasury Bond - treasury obligation ranging from 10 to 25 years, generally exempt from state and local taxes. o Federal Agency Bond - bond issued and/or guaranteed by federal or pseudo-federal agencies, such as the Federal National Mortgage Association (Fannie Mae) or the Government National Mortgage Association (Ginnie Mae). o Foreign Bond - a foreign corporation bond. o Convertible Bond - corporate bond conditionally convertible into stock. Bond Funds: o Bond Fund - a mutual fund investing in any type of bonds. o Money Market Fund - a mutual fund investing in short term money market instruments maturing in one year or less. o Tax Free Money Market Fund - a mutual fund investing in short term money market instruments maturing in one year or (Copyright 1991 by David Lee Cohen) 56 Capital Gainz Users Manual less and free of federal taxes. Sometimes dividends from these funds are also free of state and local taxes. Dividends from this security type are assumed to be tax free when generating the Schedule B Report. o Long Term Bond Fund - a mutual fund investing in long term corporate bonds, typically with an average maturation date of 10 years or more. o Medium Term Bond Fund - a mutual fund investing in medium term corporate bonds, typically with an average maturation date of about 5-7 years. o Short Term Bond Fund - a mutual fund investing in short term corporate bonds, typically with an average maturation date of 1-3 years. o Tax Free Bond Fund - a mutual fund investing in bonds free of federal taxes, such as municipal bonds. Sometimes dividends from these funds are also free of state and local taxes. Dividends from this security type are assumed to be tax free when generating the Schedule B Report. o Tax Free Long Term Bond Fund - a mutual fund investing in long term tax free bonds, typically with an average maturation date of 10 years or more. Sometimes dividends from these funds are also free of state and local taxes. Dividends from this security type are assumed to be tax free when generating the Schedule B Report. o Tax Free Medium Term Bond Fund - a mutual fund investing in medium term tax free bonds, typically with an average maturation date of 5-7 years. Sometimes dividends from these funds are also free of state and local taxes. Dividends from this security type are assumed to be tax free when generating the Schedule B Report. o Tax Free Short Term Bond Fund - a mutual fund investing in short term tax free bonds, typically with an average maturation date of 1-3 years. Sometimes dividends from these funds are also free of state and local taxes. Dividends from this security type are assumed to be tax free when generating the Schedule B Report. o Bond Index Fund - a mutual fund mirroring one of the major bond indices, such as the Shearson Lehman Aggregate Bond index. (Copyright 1991 by David Lee Cohen) 57 Capital Gainz Users Manual o Government Bond Fund - an aggregate mutual fund investing in Treasury Bonds, Treasury Bills, Treasury Notes, municipal bonds, and/or federal agency bonds. o Federal Agency Bond Fund - a mutual fund investing in bonds issued and/or guaranteed by federal or pseudo-federal agencies, such as the Federal National Mortgage Association (Fannie Mae) or the Government National Mortgage Association (Ginnie Mae). o Foreign Bond Fund - a mutual fund investing in corporate bonds from foreign countries. o Global Bond Fund - a mutual fund investing in local and foreign bonds. o High Yield Bond Fund - a mutual fund investing in lower- rated, or 'junk' bonds. o Closed-End Bond Fund - a closed-end, as opposed to open-end, mutual fund investing in bonds. Usually trades like a stock on one of the exchanges. o Convertible Bond Fund - a mutual fund investing in corporate bonds conditionally convertible into stock. o Unit Trust - like a bond fund, except the bonds are typically held to maturity. Since a unit trust is not actively managed, there are typically no ongoing management fees. Other Types: o Other - any other type of non-mutual fund security. o Tax Free Other - any other type of tax free non-mutual fund security. Other Fund Types: o Mutual Fund - any other type of mutual fund. o Tax Free Mutual Fund - any other type of tax free mutual fund. o Portfolio Allocation Fund - a mutual fund that splits investing among segments such as stocks, bonds, and gold. The weightings can be fixed or dynamic. o Balanced Fund - a mutual fund investing in stocks and bonds. (Copyright 1991 by David Lee Cohen) 58 Capital Gainz Users Manual o Other - any other type of investment that cannot be adequately described by one of these types. 2. Broker/Investment Company Lookup The Broker/Investment Company Lookup Table is brought up automatically if you enter an invalid broker/investment company name. This table simply lists all of the previously entered broker/investment company names. The cursor is positioned at the broker/investment company name that best matches the entered name. Hitting ENTER selects the highlighted broker/investment company. You can also add or delete broker/investment companies from this table. The INS key triggers and add, and the DEL key triggers a delete. This table is used instead of the Broker Table, which only shows 4 broker/investment companies at a time. As shown at the bottom of the table, you can add broker/investment companies with the INS key and delete broker/investment companies with the DEL key. See Chapter VIII - Broker/Investment Companies for details on adding, changing, and deleting broker/investment companies. 3. Selling Methods The Sell Method Lookup Table is brought up automatically if the you enter an invalid selling method. Hitting ENTER selects the highlighted selling method. This sell method can be changed later, or a different sell method can be specified when shares of this security are actually sold, unless an average price selling method was already used in a sale. According to the IRS, once any of a mutual fund's shares are sold using an average price method, that average price selling method must continue to be used in the future. Even if you plan on using an average price selling method, it's a good idea to defer this selection until you actually sell shares. Detailed information on each selling method is given in the Selling Methods Section in Chapter IV, and Chapter IX - Detailed Information on Selling Methods. E. Price Update By selecting the Price Update function key, you will be stepped through each security and prompted for the date and share price. This is a quick way to prepare for printing reports at the end of the (Copyright 1991 by David Lee Cohen) 59 Capital Gainz Users Manual month, quarter, or year. The Price Update Form shows the security name and symbol, and accepts: o Date for the price. The first entry automatically displays the current system date, and subsequent securities show the last entered date. You can accept this date or enter a different one. o Price of the security. If all you have is a fractional figure, use the fraction-to-decimal chart displayed to convert it to a decimal value. If you hit ESC from the Date field, you are taken backward one security. CNTL-ESC quits the price update procedure completely. When you accept the form, either with CNTL-ENTER or by entering the Price field, you are taken to the next security. There are also two function keys, displayed at the bottom of the screen, that will move you forward or backward one security. If you move backward with the backward function key, or if you move forward with the forward function key, no price history record is written for the securities skipped. Price history records are only written if you accept the complete form. If you reject the form with CNTL-ESC, try to backup from the first security, or try to advance from the last security, you are returned to the Security Table. After completing a form, the record is written to the Price History File. If a price history entry already exists for the entered symbol/date, that entry's price is changed to the entered price. The Fraction-to-Decimal Table, a Show Table, displays decimal equivalents for fractions. This table is always displayed along with the Price Update Form. F. Security Summary Choosing the Summary function key from the Security Table results in the following sequence. You can choose to summarize for all dates or a specific date range. Either highlight your choice and hit ENTER, or just key in the first letter of your choice. If you specify a date range, the following screen pops up: Enter the date range to summarize over in the Dates Form. A Begin Date of 6/1/90 and an End Date of 1/1/90 is treated the same as a Begin Date of 1/1/90 and an End Date of 6/1/90. (Copyright 1991 by David Lee Cohen) 60 Capital Gainz Users Manual For the highlighted security on the Security Table, the Security Summary shows: o Security symbol and name. o Current date if summary is for all dates, or begin/end dates if summary is for a range of dates. o Security type. o Current price and yield. o Total and short term open shares, average purchase price, purchase commission or load, current value, current gain/loss, and current gain/loss percentage. o Total and short term sold shares, average closing price, closing commission or load, closing amount, closing gain/loss, and closing gain/loss percentage. o Total dividends and fees. Total and short term capital gain distributions. o Begin/end prices for the specified period. o Total distributions per share (dividends and capital gains) for the specified period. o Total return for the period. A function key allows you to print out the Security Summary Report from the Security Summary. G. Portfolio Report The Portfolio Report, similar in format to the Security Table, is available via a function key on the Security Table. Choosing this function key results in the following sequence. You can choose to print to the printer or a file with the Device Form. 'PRN' represents the printer device. Highlight your choice and hit ENTER, or just hit the key matching the first character in your selection. If you choose to print to a file, enter the name of the DOS file to print to in the File Form. The Append Report global setting (Copyright 1991 by David Lee Cohen) 61 Capital Gainz Users Manual determines if the report is appended to the file or overwrites the file. A temporary file, CAPGNZ.TMP, is sometimes used when printing to a file. See the Portfolio Report Section in Chapter VI for details on the contents of the Portfolio Report. H. Fixup a Security The Security Fixup Form, available from the Fixup function key on the Security Table, allows you to modify the 'hidden' values in the security record. If you don't use transaction logging and Capital Gainz terminates abnormally while adding, changing, or deleting records, the open share information stored in the security records may become out of sync with the actual values in the Open Shares Log. If this happens, you can change the information in the security records using the form brought up by the Fixup function key. Individual activity log entries must be fixed by hand prior to running fixup on the security. The Security Fixup Form accepts: o Total open shares, open amount, and open commission o Short term open shares, open amount, and open commission o Last migration date from short term category to long term category (for double category, ignored otherwise) o Whether any shares have been sold from the short term or long term category (for category methods, ignored otherwise) a. Totals Security Fixup usually requires the security's values to be set to the totals in the Open Shares Log. If you select the Totals function key, these totals will be calculated and entered into the appropriate fields of the form. If you use an average price method to dispose of shares for a particular security, then totaling open share information may result in incorrect values for open amounts since price and amount information for securities using an average price selling method is not reflected in individual open shares records. In this case, you must manually calculate and enter the values in the Security Fixup (Copyright 1991 by David Lee Cohen) 62 Capital Gainz Users Manual Form. You should go back to a recent backup or report and determine average share price, and then multiply this average price by the number of open shares to fixup the security. I. Split Shares You bring up the Stock Split Form for the highlighted security on the Security Table by selecting the Stock Split function key. After completion of the form, all open shares records, distribution records, and price history records for the selected security are updated to reflect the split ratio. You are always asked for confirmation at the end of the Stock Split Form, regardless of your global setting specifications. After you complete the Stock Split Form, a counter displays the progress of the share splitting procedure. File data is actually being changed while this counter is displayed. a. Split Ratio You enter the split ratio in the Stock Split Form. Thus, if each share is split into two shares, the ratio is '2 For 1'. The number of shares are multiplied by the ratio, while the price per share is divided by the ratio. J. Price History Choosing the Price History function key from the Security Table results in the following sequence. You can choose to show prices for all dates or a specific date range. Either highlight your choice and hit ENTER, or just key in the first letter of your choice. If you specify a date range, the following screen pops up: Enter the date range in the Dates Form. A Begin Date of 6/1/90 and an End Date of 1/1/90 is treated the same as a Begin Date of 1/1/90 and an End Date of 6/1/90. For the security highlighted on the Security Table, the Price History Table shows: o Security symbol and name o Today's date if no date range was chosen, otherwise the (Copyright 1991 by David Lee Cohen) 63 Capital Gainz Users Manual entered date range Price history records are interleaved with distribution records, sorted in descending date order. For price history records: o The date of the price o The price For distribution records: o The distribution type o The distribution amount per share At the bottom of the table: o The high price and date, low price and date o The simple average price o The total distribution per share The distribution per share amounts are included to explain price drops due to dividend or capital gain payouts. The highest price for the period is flagged with an 'H', and the lowest price for the period is flagged with an 'L'. If the highest and lowest prices are the same, it is flagged with an '*'. You can add/change/delete price entries, but not distribution entries, from the table using the INS, ENTER, and DEL keys. These function use the Price Form, described below. You can delete the displayed price entries, but not the distribution entries, with the Del Range function key. Also, the Price History Report can be generated from a function key. The Price History Table and Price History Report are valuable tools for investment analysis. See Chapter X - Analysis for details. 1. Add a Price History Entry The Price Form is brought up to add a Price History File entry when you hit the INS key. This form is similar to the Price Update Form, except you can't move through different securities. Buying or selling securities result in implicit additions to the Price History File. Unlike other tables, adding entries in the Price History Table may or may not affect the price entries. This is due to the price (Copyright 1991 by David Lee Cohen) 64 Capital Gainz Users Manual history interval global setting. Here are the rules for adding a price history entry: o Always add entries that precede or follow all existing dates. o Don't add entries that are not at least the specified price history interval away from the next and previous dates. o If an entry causes an existing entry to be less than the price history interval away from its next and previous entries, delete the exiting one and add this one. Thus, o The entered date/price may or may not be put in the file. o If the date/price is put in the file, then an existing entry may or may not be deleted. Both fields in the Price Form are required. After entering all of the fields or hitting CNTL-ENTER, the price history record is added. When you're finished with the Price Form, you are returned to the Price History Table, and the just added price history entry is highlighted. 2. Change a Price History Entry The Price Form is brought up to change the highlighted price history record when you hit the ENTER key. The Price Form, described in the Add a Price History Entry section, is initialized to the current values of the price history record to be changed. Unlike other tables, changing entries in the Price History Table may or may not affect the price entries. This is due to the price history interval global setting. A change is treated as a delete followed by an add. See the rules for adding a price history entry in the Add a Price History Entry section. Both fields in the Price Form are required. After entering all of the fields or hitting CNTL-ENTER, the price history record is changed. When you're finished with the Price Form, you are returned to the Price History Table, and the just changed price history entry is highlighted. (Copyright 1991 by David Lee Cohen) 65 Capital Gainz Users Manual 3. Delete a Price History Entry The Price Form is brought up to delete the highlighted price history record when you hit the DEL key. The Price Form, described in the Add a Price History Entry section, is initialized to the current values of the price history record to be deleted. Hit ENTER or CNTL-ENTER to delete the record, or ESC or CNTL-ESC to exit. After deleting the price history record, you are returned to the Price History Table, and the record after the deleted record is highlighted. 4. Price History Report The Price History Report, available from a function key on the Price History Table, is similar in format to the Price History Table. Choosing this function key results in the following sequence. You can choose to print to the printer or a file with the Device Form. 'PRN represents the printer device. Highlight your choice and hit ENTER, or just hit the key matching the first character in your selection. If you choose to print to a file, enter the name of the DOS file to print to in the File Form. The Append Report global setting determines if the report is appended to the file or overwrites the file. A temporary file, CAPGNZ.TMP, is sometimes used when printing to a file. The Price History Report is generated for the previously entered date range. See the Price History Report Section in Chapter VI for details on the contents of the Price History Report. K. Allocation The Allocation Table, a Show Table, is available from a function key on the Security Table. This table shows the open amount for each security type along with that amount's percentage of your total portfolio value. Also, subtotals are shown for: o Stocks - stocks o Stock Funds - stock mutual fund holding o Bonds - bonds and other fixed income securities (Copyright 1991 by David Lee Cohen) 66 Capital Gainz Users Manual o Bond Funds - bond and other fixed income mutual funds o Other - securities that can't be categorized as stocks or as bonds o Other Funds - mutual funds that can't be categorized as only stock funds or bond funds, usually hold some of each The Allocation Table and Allocation Report are valuable tools for evaluating your portfolio. See Chapter X - Analysis for details. The Allocation Report can be printed from a function key on the Allocation Table. Choosing this function key results in the following sequence. You can choose to print to the printer or a file with the Device Form. 'PRN' represents the printer device. Highlight your choice and hit ENTER, or just hit the key matching the first character in your selection. If you choose to print to a file, enter the name of the DOS file to print to in the File Form. The Append Report global setting determines if the report is appended to the file or overwrites the file. A temporary file, CAPGNZ.TMP, is sometimes used when printing to a file. See the Allocation Report Section in Chapter VI for details on the contents of the Allocation Report. (Copyright 1991 by David Lee Cohen) 67 Chapter VI. - Reports All Capital Gainz reports are available from the Report Menu, except for the Open Information for Shares Sold Report, which is described in the Sell Shares Section of Chapter IV. As indicated below, reports may also be available from certain tables. Reports use the following global settings: o Append Report: if 'Y', a report directed to an existing DOS file is appended to the file. If 'N', the existing DOS file is overwritten without warning. o Lines Per Page: the number of printed lines on each page. o Line Draw Chars: if 'Y', then the extended ASCII line drawing characters are used. If your printer does not support these characters, enter 'N' to use the substitute characters '-' and '='. A progress message is displayed while a report is printing. As this message indicates, you can abort printing by hitting the ESCAPE key. You can send any report to the printer or a DOS file. An 'end-of- report' marker is added to the end of each report. Here's a quick reference of other options available for each report: o Portfolio Report - you can subtotal by broker/investment company. o Schedule B and Schedule D Reports - you must specify the year. o Security Summary Report - you can specify all or selected securities, and all or a range of dates. o Activity Detail Report - you can specify all or selected securities, all or a range of dates, and one or all activity logs. Prints Open Shares Detail Report, Sold Shares Detail Report, and/or Distribution Detail Report. o Prices History Report - you can specify all or selected securities, and all or a range of dates. All reports are terminated by a formfeed. Make sure your paper is lined up before printing, as Capital Gainz does not output an initial formfeed. (Copyright 1991 by David Lee Cohen) 68 Capital Gainz Users Manual A. Select Device You can choose to print to the printer or a file with the Device Form. 'PRN' represents the printer device. Highlight your choice and hit ENTER, or just hit the key matching the first character in your selection. B. Print to File If you choose to print to a file, enter the name of the DOS file to print to in the File Form. The Append Report global setting determines if the report is appended to the file or overwrites the file. A temporary file, CAPGNZ.TMP, is sometimes used when printing to a file. C. Portfolio Report The format of the Portfolio Report, also available from a function key on the Security Table, is similar to the Security Table. The report prints three lines of information for each security, with securities listed in alphabetical order by symbol. The values displayed for each security are: o Symbol o Security name, plus '(IRA)' if you specified that the security was held in an IRA or other tax deferred program o Last price and last price date o Current number of open shares o Current yield o Average purchase price for the open shares o Current value of open shares o Current open share gain/loss amount and percentage Also, portfolio totals are printed for: o Total value of open shares for all securities (Copyright 1991 by David Lee Cohen) 69 Capital Gainz Users Manual o Total gain/loss amount and percentage for all securities The Current Yield, Average Price, Value, and Gain/Loss calculations are discussed in detail in Chapter X - Analysis. You may see a discrepancy between the open value and gain/loss figures in the Portfolio Report and the Open Shares Log or Open Shares Detail Report. For the sake of expediency, the Portfolio Report multiplies the cumulative number of shares by the current price to get the total open value. However, the Open Shares Log and the Open Shares Detail Report do a record by record calculation, rounding each individual record's open value. Before printing, a popup form asks if you want to subtotal by broker/investment company: If you elect to subtotal by broker/investment company, the Portfolio Report would look like this: D. Broker/Investment Company Report The Broker/Investment Company Report prints the name, address, and phone number for all broker/investment company entries, sorted by name. Also, all securities and account numbers associated with each broker/investment company are shown. This report is also available from a function key on the Broker/Investment Company Table. The format of this report is a combination of the Broker/Investment Company Table and the Security/Account Number Information screen available from a function key on the Broker/Investment Company Table. E. Schedule B & D Reports The Schedule B and D Reports are combined since some of the values calculated in the Schedule B Report are carried over to the Schedule D Report. The Schedule B Report includes Part II of Schedule B from the Federal Income Tax Forms. The Schedule D Report includes Parts I, II, and III of Schedule D from the Federal Income Tax Forms. These forms may not be identical to the actual tax forms (the 1990 forms were used as the model), and all of the information may not be available. Thus, they are not legal substitutes for the actual forms. However, they do provide data easily transferrable to the actual Schedule B and Schedule D Forms. In these reports, purchase and selling commissions are added to the purchase basis. As explained earlier, these reports are the only places where commissions are factored into the basis figure. Everywhere else, the commissions are simply subtracted from the calculated gain/loss. Also in these reports, all printed monetary (Copyright 1991 by David Lee Cohen) 70 Capital Gainz Users Manual figures are rounded up or down to the nearest dollar. Any securities that are marked as tax exempt are skipped completely. Thus, only securities held in retirement plans, like IRAs, should be marked as tax exempt. The Schedule B Report correctly segregates dividends received from securities classified as tax free security types. 1. Enter Year Before printing the Schedule B and Schedule D Reports, you are asked for the tax year for the report. F. Allocation Report The Allocation Report shows you each security's percentage of your total portfolio value. In addition, subtotals are shown for the following categories of securities: o Stocks - stocks o Stock Funds - stock mutual fund holding o Bonds - bonds and other fixed income securities o Bond Funds - bond and other fixed income mutual funds o Other - securities that can't be categorized as stocks or as bonds o Other Funds - mutual funds that can't be categorized as only stock funds or bond funds, usually hold some of each Thus, you can see how your portfolio is weighted, and compare the weightings to your perception of the stock and bond markets' directions. The Allocation Report is also available from a function key on the Allocation Table. See Chapter X - Analysis for details on using the Allocation Report for portfolio analysis. G. Select Dates You can specify all or a range of dates for the Security Summary, Activity Detail, and Price History Reports. Choosing any of the other reports will cause this entry to be skipped. (Copyright 1991 by David Lee Cohen) 71 Capital Gainz Users Manual 1. Enter Date Range If you elected to report over a range of dates, enter the beginning and ending dates in the Dates Form. A Begin Date of 6/1/90 and an End Date of 1/1/90 is treated the same as a Begin Date of 1/1/90 and an End Date of 6/1/90. H. Select Securities The Security Summary, Activity Detail, and Price History Reports can be generated either for all securities or just for selected securities. Choosing any of the other reports will cause this entry to be skipped. 1. Select Securities The Select Securities Table, a Select Table, allows you to tag securities for which information will be printed. Hitting RETURN 'toggles' the tag on the highlighted security - the security is tagged or cleared, depending on its current state. After hitting return and toggling the tag, the next security is highlighted. I. Security Summary Report Like the Security Summary, the Security Summary Report shows, for each security: o Security symbol and name. o Current date if the summary is for all dates, or begin/end dates if summary is for a range of dates. o Security type. o Current price and yield. o Total and short term open shares, average purchase price, purchase commission or load, current value, current gain/loss, and current gain/loss percentage. o Total and short term sold shares, average closing price, closing commission or load, closing amount, open amount for sold shares, open commission or load for sold shares, closing gain/loss, and closing gain/loss percentage. (Copyright 1991 by David Lee Cohen) 72 Capital Gainz Users Manual o Total dividends and fees. Total and short term capital gain distributions. o Begin/end prices for the specified period. o Total distributions per share (dividends and capital gains) for the specified period. o Total return for the period. In addition, the Security Summary Report shows: o Total and short term capital gain distributions per share. o The security's account number. o The actual total and short term basis amounts. If you specify more than one security, the Security Summary Report also generates grand totals. The Security Summary Report is also available from a function key on the Security Summary, but only prints information for that security. J. Activity Detail Report You can choose to print either one or all activity log reports. Reports are available for Open Share Detail, Sold Share Detail, and Distribution Detail. 1. Select Log After selecting the Activity Detail Report, the Select Log Form pops up for you to specify printing either all activity logs or a single activity log. 2. Open Shares Detail Report The Open Shares Detail Report shows information on individual open shares records, as well as totals, for the specified securities and date range. The format of the Open Shares Detail Report is similar to the Open Shares Log Table screen described in the Open Shares Log Section of Chapter VII. The report includes: (Copyright 1991 by David Lee Cohen) 73 Capital Gainz Users Manual o The security symbol and name o The security's current price o The security's account number o Today's date if no date range was chosen, or else the selected date range For each open shares record, there are two lines of information: o The purchase date o The number of shares purchased o The basis price, which is the same as the purchase price if a category method is not being used o The basis amount, which is the same as the purchase amount if a category method is not being used o The purchase commission or load o Any note specified for the open shares record o The gain/loss amount and percentage, based on the current price o The short/long term status of the open shares Totals for each security include: o Total and short term open shares o Total and short term weighted average purchase price o Total and short term purchase commission or load o Total and short term basis amount o Total and short term current value o Total and short term gain/loss amount and percentage The Open Shares Detail Report is also available from the Open Shares Log Table. For details on some of the calculations, see the Chapter X - Analysis. (Copyright 1991 by David Lee Cohen) 74 Capital Gainz Users Manual 3. Sold Shares Detail Report The Sold Shares Detail Report shows information on individual sold shares records, as well as totals, for the specified securities and date range. Subtotals are given for sales encompassing multiple purchases. The format of the Sold Shares Detail Report is similar to the Sold Shares Log Table screen described in the Sold Shares Log Section of Chapter VII. The report includes: o The security symbol and name o Today's date if no date range was chosen, or else the selected date range For each sold shares record, there are three lines of information: o The selling date o The number of shares sold o The selling price o The selling amount o The selling commission or load o Any note specified for the sold shares record o The purchase date of shares sold o The basis price of shares sold, which is the same as the purchase price if a category method is not being used o The basis amount of shares sold, which is the same as the purchase amount if a category method is not being used o The purchase commission or load of shares sold o The gain/loss amount and percentage for the sale o The short/long term status of the sale If a particular sale resulted in the creation of multiple sold shares records, a subtotal is given for the sale date. Subtotals, and totals for each security, include: (Copyright 1991 by David Lee Cohen) 75 Capital Gainz Users Manual o Total and short term sold shares o Total and short term weighted average selling price - this is not shown for subtotals, since a subtotal's selling price is the same for each sold shares record. o Total and short term selling commission or load o Total and short term selling amount o Total and short term purchase commission or load for shares sold o Total and short term basis amount for shares sold o Total and short term gain/loss amount and percentage The Sold Shares Detail Report is also available from the Sold Shares Log Table. For details on some of the calculations, see Chapter X - Analysis. 4. Distribution Detail Report The Distribution Detail Report shows information on individual distribution records, as well as totals, for the specified securities and date range. The format of the Distribution Detail Report is similar to the Distribution Log Table screen described in the Distribution Log Section of Chapter VII. The report includes: o The security symbol and name o Today's date if no date range was chosen, or else the selected date range For each distribution, there is one line of information: o The distribution date o The distribution type o The distribution amount o The distribution per share (not for Fees) o Any note specified for the distribution (Copyright 1991 by David Lee Cohen) 76 Capital Gainz Users Manual Totals for each security include: o Total distribution amount for Dividend distributions o Total distributions per share for Dividend distributions o Total and short term distribution amounts for Long Term Capital Gain and Short Term Capital Gain distributions o Total and short term distributions per share for Long Term Capital Gain and Short Term Capital Gain distributions o Total amounts for Fee types The Distribution Detail Report is also available from the Distribution Log Table. For details on some of the calculations, see Chapter X - Analysis. K. Price History Report The Price History Report is similar in format to the Price History Table. For the specified securities and date range, the Price History Report shows: o Security symbol and name o Today's date if no date range was chosen, otherwise the entered date range Price history records are interleaved with distribution records, sorted in descending date order. For price history records: o The date of the price o The price For distribution records: o The distribution type o The distribution amount per share At the end of each security: o The high price and date, low price and date (Copyright 1991 by David Lee Cohen) 77 Capital Gainz Users Manual o The simple average price o The total distribution per share The distribution per share amounts are included to explain price drops due to dividend or capital gain payouts. The highest price for the period is flagged with an 'H', and the lowest price for the period is flagged with an 'L'. If the highest and lowest prices are the same, it is flagged with an '*'. The Price History Report and Price History Table are valuable tools for investment analysis. See Chapter X - Analysis for details. (Copyright 1991 by David Lee Cohen) 78 Chapter VII. - Activity Logs You get to the Activity Log Menu from the Main Menu by choosing Log Maintenance. From there, you can choose to view either the Open Shares, Sold Shares, or Distribution Log. After choosing the type of log to view, you can limit the records displayed by specifying a date range. After selecting the log type and the date range and bringing up the log table, you enter the symbol of the security whose records will be displayed. Activity logs are always maintained - they have nothing to do with the Log Transaction global setting. This setting is described in Chapter IX - Global Settings. A. Date Range If you requested to limit records over a range of dates, enter the beginning and ending dates in the Dates Form. A Begin Date of 6/1/90 and an End Date of 1/1/90 is treated the same as a Begin Date of 1/1/90 and an End Date of 6/1/90. B. Open Shares Log The Open Shares Log Table requires you to enter the symbol for the security whose open shares records you want to view. If you leave this entry blank, or enter an invalid name, the Security Lookup Table pops up. After you enter a valid security symbol, the Open Shares Log Table shows the security's name, the current date or the specified date range, and the security's current price. The open shares records are sorted in ascending order by date, and show: o The purchase date o The number of shares purchased o The basis price, which is the same as the average price if a category method is not being used o The basis amount, which is the same as the purchase amount if a category method is not being used o The purchase commission or load o The current gain/loss (Copyright 1991 by David Lee Cohen) 79 Capital Gainz Users Manual At the bottom of the table, these values are totalled for the specified date range. From the Open Shares Log Table, you can add/change/delete open shares records with the Buy Shares Form. To add a record, hit the INS key. To change a record, highlight the record and hit the ENTER key. To delete a record, highlight the record and hit the DEL key. Using the Del Range function key, you can delete the displayed range of records. Another function key allows you to print out the Open Shares Detail Report for the specified security. 1. Security Lookup The Security Lookup Table is brought up if you enter an invalid security symbol. For each security, this table shows the symbol, name, number of open shares, and last buy, sell, and distribution dates. This table is displayed instead of the Security Table, which only shows four securities at a time and is somewhat slower due to the calculations performed. If an invalid security had been entered, the cursor is positioned on the security symbol that best matches the entered symbol. Hitting ENTER selects the highlighted security. As shown at the bottom of the table, you can add securities with the INS key and delete securities with the DEL key. See Chapter V - Securities for details on adding, changing, and deleting securities. 2. Add an Open Shares Record If you hit the INS key to add a record, the Buy Shares Form pops up. The fields in this form are described in detail in the Buy Shares Section of Chapter IV. Adding an open shares record is the same as recording a share purchase. This process is discussed in detail in the Buy Shares Section of Chapter IV. However, while the Buy Shares Form is accepted repeatedly when reached through the Activity Menu, it is only accepted once when brought up from the Open Shares Log Table. A price history entry may or may not be added based on the entered price and date. See the Price History Section of Chapter V for detailed information on how a record is added to the Price History File. After entering the purchase, you are returned to the Open Shares (Copyright 1991 by David Lee Cohen) 80 Capital Gainz Users Manual Log Table, and the new record is highlighted. 3. Change an Open Shares Record If you hit the ENTER key to change the highlighted record, the Buy Shares Form pops up. The fields in this form are described in detail in the Buy Shares Section of Chapter IV. The fields in the Buy Shares Form are populated with the record's current values. Any or all of the fields, except the security symbol, can be changed. Even if a category method is being used, the actual purchase price and amount are displayed. IF YOU SIMPLY WANT TO CHANGE AN OPEN SHARES RECORD'S DATE FOR A SECURITY USING A CATEGORY METHOD, MAKE SURE YOU ADJUST THE DISPLAYED PRICE (set it to the number of shares multiplied by the average price). The corresponding price history entry is also updated, unless the date is changed. If the date is changed, the price history entry is deleted and a new one may or may not be added. See the Price History Section of Chapter V for detailed information on how a record is added to the Price History File. To effect the change, enter all of the fields or hit ENTER or CNTL-ENTER. To back out, hit ESC or CNTL-ESC. After changing the open shares record, you are returned to the Open Shares Log Table, and the changed record is highlighted. 4. Delete an Open Shares Record If you hit the DEL key to delete the highlighted record, the Buy Shares Form pops up. The fields in this form are described in detail in the Buy Shares Section of Chapter IV. The fields in the Buy Shares Form are populated with the record's current values. Even if a category method is being used, the actual purchase price and amount are displayed and used in the deletion. Hit ENTER or CNTL-ENTER to delete the record, or ESC or CNTL-ESC to exit. The corresponding price history entry is deleted. After deleting the open shares record, you are returned to the Open Shares Log Table, and the record after the deleted record is highlighted. (Copyright 1991 by David Lee Cohen) 81 Capital Gainz Users Manual 5. Delete Range The Del Range function key allows you to delete the displayed records, based on the previously entered date range. You will always be prompted for confirmation, regardless of the Confirm Delete global setting, since many records could be affected. After the deletion, you are returned to the Log Maintenance Menu. 6. Open Shares Detail Report The Open Shares Detail Report can be printed for the displayed security and selected date range. See the Open Shares Detail Report Section of Chapter VI for the format of this report. C. Sold Shares Log The Sold Shares Log Table requires you to enter the symbol for the security whose sold shares records you want to view. If you leave this entry blank, or enter an invalid name, the Security Lookup Table pops up. After you enter a valid security symbol, the Sold Shares Log Table shows the security's name and the current date or the specified date range. The sold shares records are sorted in ascending order first by the sell date and then by the purchase date, and show: o The selling date o The number of shares sold o The selling price o The selling amount o The selling commission or load o The gain/loss from the sale At the bottom of the table, these values are totaled for the specified date range. From the Sold Shares Log Table, you can add/change/delete sold shares records with the Sell Shares Form. To add a record, hit the INS key. To change a record, highlight the record and hit the ENTER key. To delete a record, highlight the record and hit the DEL key. Using the Del Range function key, you can delete the displayed range of records. Another function key allows you to print out the (Copyright 1991 by David Lee Cohen) 82 Capital Gainz Users Manual Sold Shares Detail Report for the specified security. 1. Security Lookup The Security Lookup Table is brought up if you enter an invalid security symbol. For each security, this table shows the symbol, name, number of open shares, and last buy, sell, and distribution dates. This table is displayed instead of the Security Table, which only shows four securities at a time and is somewhat slower due to the calculations performed. If an invalid security had been entered, the cursor is positioned on the security symbol that best matches the entered symbol. Hitting ENTER selects the highlighted security. As shown at the bottom of the table, you can add securities with the INS key and delete securities with the DEL key. See Chapter V - Securities for details on adding, changing, and deleting securities. 2. Add a Sold Shares Record If you hit the INS key to add a record, the Sell Shares Form pops up. The fields in this form are described in detail in the Sell Shares Section of Chapter IV. Adding sold shares records is the same as selling shares. This process is discussed in detail in the Sell Shares Section of Chapter IV. However, while the Sell Shares Form is accepted repeatedly when reached through the Activity Menu, it is only accepted once when brought up from the Sold Shares Log Table. A price history entry may or may not be added based on the entered price and date. See Chapter V - Securities for detailed information on how a record is added to the Price History File. After entering the sale, you are returned to the Sold Shares Log Table, and the first new record added is highlighted. 3. Change a Sold Shares Record If you hit the ENTER key to change the highlighted record, the Sell Shares Form pops up. The fields in this form are described in detail in the Sell Shares Section of Chapter IV. The fields in the Sell Shares Form are populated with the record's current values. All of the fields except the security symbol, the (Copyright 1991 by David Lee Cohen) 83 Capital Gainz Users Manual selling method, and the number of shares can be changed. The selling method and number of shares sold can't be changed because of complicated interrelationships. In order to change these fields, delete and 'unsell' the shares, as described below. Then, re-execute the sale. You'll also have to do this to switch between long term and short term status for a sale, since this is assigned at the time of the actual sale. The corresponding price history entry is also updated, unless the date is changed. If the date is changed, the price history entry is deleted and a new one may or may not be added. See the Price History Section of Chapter V for detailed information on how a record is added to the Price History File. To effect the change, enter all of the fields or hit ENTER or CNTL-ENTER. To back out, hit ESC or CNTL-ESC. After changing the sold shares record, you are returned to the Sold Shares Log Table, and the changed record is highlighted. 4. Delete a Sold Shares Record If you hit the DEL key to delete the highlighted record, the Sell Shares Form pops up. The fields in this form are described in detail in the Sell Shares Section of Chapter IV. The fields in the Sell Shares Form are populated with the record's current values. Hit ENTER or CNTL-ENTER to delete the record, or ESC or CNTL-ESC to exit. The corresponding price history entry is deleted. Before the record is deleted, you are given the option to 'unsell' the shares: 'Unselling' sold shares records means that the open share information is added back to the Open Shares File. The price used for the open shares record is the price used when the shares were sold, which may be different than the actual purchase price when a category selling method was used. When a category method was used for the sale, the open shares added back use the basis price and amount from the time of the sale. (The actual purchase price and date can not be determined.) The net effect is that the selling of these open shares is reversed. However, any note attached to the open shares is not restored. Instead, a default note of 'UNSOLD' is used. Note that when doing a range deletion, with the Del Range key, you are not given the option to unsell deleted records. If you choose not to 'unsell' the shares, the sold shares record (Copyright 1991 by David Lee Cohen) 84 Capital Gainz Users Manual is simply deleted. After deleting the sold shares record, you are returned to the Sold Shares Log Table, and the record after the deleted record is highlighted. 5. Delete Range The Del Range function key allows you to delete the displayed records, based on the previously entered date range. You will always be prompted for confirmation, regardless of the Confirm Delete global setting, since many records could be affected. After the deletion, you are returned to the Log Maintenance Menu. 6. Sold Shares Detail Report The Sold Shares Detail Report can be printed for the displayed security and selected date range. See the Sold Shares Detail Report Section of Chapter VI for the format of this report. D. Distribution Log The Distribution Log Table requires you to enter the symbol for the security whose distribution records you want to view. If you leave this entry blank, or enter an invalid name, the Security Lookup Table pops up. After you enter a valid security symbol, the Distribution Log Table shows the security's name and the current date or the specified date range. The distribution records are sorted in ascending order by date, and show: o The distribution date o The type of distribution o The amount of the distribution o The per share amount of the distribution At the bottom of the table, these values are totaled for the specified date range. From the Distribution Log Table, you can add/change/delete distribution records with the Record Distribution Form. To add a record, hit the INS key. To change a record, highlight the record and hit the ENTER key. To delete a record, highlight the record and hit (Copyright 1991 by David Lee Cohen) 85 Capital Gainz Users Manual the DEL key. Using the Del Range function key, you can delete the displayed range of records. Another function key allows you to print out the Distribution Detail Report for the specified security. 1. Security Lookup The Security Lookup Table is brought up if you enter an invalid security symbol. For each security, this table shows the symbol, name, number of open shares, and last buy, sell, and distribution dates. This table is displayed instead of the Security Table, which only shows four securities at a time and is somewhat slower due to the calculations performed. If an invalid security had been entered, the cursor is positioned on the security symbol that best matches the entered symbol. Hitting ENTER selects the highlighted security. As shown at the bottom of the table, you can add securities with the INS key and delete securities with the DEL key. See Chapter V - Securities for details on adding, changing, and deleting securities. 2. Add a Distribution Record If you hit the INS key to add a record, the Record Distribution Form pops up. The fields in this form are described in detail in the Record Distribution Section of Chapter IV. Adding a distribution record is the same as recording a distribution. This process is discussed in detail in the Record Distribution Section of Chapter IV. However, while the Record Distribution Form is accepted repeatedly when reached through the Activity Menu, it is only accepted once when brought up from the Distribution Log Table. After entering the distribution, you are returned to the Distribution Log Table, and the new record is highlighted. 3. Change a Distribution Record If you hit the ENTER key to change the highlighted record, the Record Distribution Form pops up. The fields in this form are described in detail in the Record Distribution Section of Chapter IV. The fields in the Record Distribution Form are populated with the record's current values. Any or all of the fields, except the security (Copyright 1991 by David Lee Cohen) 86 Capital Gainz Users Manual symbol, can be changed. To effect the change, enter all of the fields or hit ENTER or CNTL-ENTER. To back out, hit ESC or CNTL-ESC. After changing the distribution record, you are returned to the Distribution Log Table, and the changed record is highlighted. 4. Delete a Distribution Record If you hit the DEL key to delete the highlighted record, the Record Distribution Form pops up. The fields in this form are described in detail in the Record Distribution Section of Chapter IV. The fields in the Record Distribution Form are populated with the record's current values. Hit ENTER or CNTL-ENTER to delete the record, or ESC or CNTL-ESC to exit. After deleting the distribution record, you are returned to the Distribution Log Table, and the record after the deleted record is highlighted. 5. Delete Range The Del Range function key allows you to delete the displayed records, based on the previously entered date range. You will always be prompted for confirmation, regardless of the Confirm Delete global setting, since many records could be affected. After the deletion, you are returned to the Log Maintenance Menu. 6. Distribution Detail Report The Distribution Detail Report can be printed for the displayed security and selected date range. See the Distribution Detail Report Section of Chapter VI for the format of this report. (Copyright 1991 by David Lee Cohen) 87 Chapter VIII. - Broker/Investment Companies A. Broker/Investment Company Table You bring up the Broker/Investment Company Table from the Main Menu. This table is sorted by broker/investment company name, and the three lines of information show each broker/investment company's name, phone number, and address. From the Broker/Investment Company Table, you can add records with the INS key, change the highlighted record with the ENTER key, and delete the highlighted record with the DEL key. Also, using function keys, you can print the Broker/Investment Company Report or display the Security/Account Number Information. 1. Add a Broker/Investment Company The Broker/Investment Company Form is brought up to add a broker/investment company when you hit the INS key while viewing the Broker/Investment Company Table. The Broker/Investment Company Form accepts: o Name - the name of the broker/investment company o Address - the street address of the broker/investment company - two lines of address are provided, so you could include a specific broker's name on the first address line o City - the broker/investment company's city o State - the two letter abbreviation for broker/investment company's state, which is not validated o Zip - the broker/investment company's 5 or 9 character zip code, which is not validated o Phone # - the broker/investment company's phone number As shown at the bottom of the screen, you can hit CNTL-ENTER to accept the form or CNTL-ESC to reject the form at any time. In order to accept a Broker/Investment Company Form with CNTL-ENTER, only the Name field must have a valid entry. After entering all of the fields or hitting CNTL-ENTER, the broker/investment record is added. When you're finished with the (Copyright 1991 by David Lee Cohen) 88 Capital Gainz Users Manual Broker/Investment Company Form, you are returned to the Broker/Investment Company Table, and the just added record is highlighted. 2. Change a Broker/Investment Company The Broker/Investment Company Form is brought up to change the highlighted broker/investment company when you hit the ENTER key while viewing the Broker/Investment Company Table. The fields in the Broker/Investment Company Form, described in detail in the Add a Broker/Investment Company section, are populated with the record's current values. To effect the change, enter all of the fields and hit ENTER or CNTL-ENTER. To back out, hit ESC or CNTL-ESC. If you changed the broker/investment company name, all securities associated with the broker/investment company are updated to reflect the change. When you're finished with the Broker/Investment Company Form, you are returned to the Broker/Investment Company Table, and the just changed record is highlighted. 3. Delete a Broker/Investment Company The Broker/Investment Company Form is brought up to delete the highlighted broker/investment company when you hit the DEL key while viewing the Broker/Investment Company Table. The fields in the Broker/Investment Company Form, described in detail in the Add a Broker/Investment Company section, are populated with the record's current values. To delete the record, hit ENTER or CNTL-ENTER. To back out, hit ESC or CNTL-ESC. All of the associated security records' broker/investment company name fields are cleared. When you're finished with the Broker/Investment Company Form, you are returned to the Broker/Investment Company Table, and the record after the deleted record is highlighted 4. Broker/Investment Company Report The Broker Report function key prints out the Broker/Investment Company Report. This report is described in detail in the Broker/Investment Company Report Section of Chapter VI. 5. Security/Account Number Information The Security/Account Num Info function key calls up a table that shows securities and account numbers associated with each (Copyright 1991 by David Lee Cohen) 89 Capital Gainz Users Manual broker/investment company. (Copyright 1991 by David Lee Cohen) 90 Chapter IX. - Global Settings Global settings are either values that are subject to change, such as the holding period required for long term gain classification, or values that customize Capital Gainz for a particular user, such as automatically reinvesting distributions. A. Global Settings To set the global settings, you fill in the Global Settings Form. This form is called up by selecting Global Settings from the Main Menu. 1. Holding Period The holding period entry is the number of days shares must be owned before they can be classified as long term holdings. Depending on the current tax codes, long term gains may be taxed less than short term gains. Open shares are classified as long term if the current date exceeds the purchase date by more than the holding period; otherwise open shares are classified as short term. Gains or losses from selling shares are classified as long term if the date of the sale exceeded the purchase date by more than the holding period at the time of the sale; otherwise gains or losses from selling shares are classified as short term. Changing this value will result in the updating of any securities defined with the double category selling method. Shares may be migrated from short term to long term if you decrease the holding period. Shares may be demigrated from long term to short term if you increase the holding period. 2. Confirmations You can request that Capital Gainz ask for confirmation before adding, changing, or deleting records. When a requested operation affects a large number of records, such as a stock split or a security sale, confirmation will always be requested, regardless of the confirmation settings. If confirmation is requested, then before executing the operation the Confirm Form pops up: If you enter 'Y', then the operation is performed. If you enter no, then the operation is not performed. This confirmation is a welcome safeguard for some, and an annoying nuisance to others. This is precisely why Capital Gains leaves the settings up to you. Even if you don't care much for confirmations, it still may be wise to leave them (Copyright 1991 by David Lee Cohen) 91 Capital Gainz Users Manual on for deletions. 3. Reinvest You can request Capital Gainz to bring up the Reinvest Form after recording a distribution. The Reinvest Form then brings up the Buy Shares Form to enter reinvestment information. This is useful for your mutual funds that automatically reinvest dividends. 4. Logging Transactions Logging transactions allows you to guard against data becoming corrupt due to abnormal program termination at critical periods. Logging affects performance to a varying degree due to the overhead of additional file I/O. If you elect not to log transactions, data may become inconsistent if the program terminates abnormally while adding, changing, or deleting records. If termination while logging is turned off causes an inconsistent state, the data may be reconciled as explained in the section on Security Fixup. Otherwise, you'll have to resort to backup data. If logging is turned on, a pre-image log is created prior to the transaction. If all goes well, at the end of the transaction the changes are committed and the pre-image log is removed. If, however, the program terminates due to a failure or by entering CNTL-BREAK, the next time Capital Gainz is run this pre-image log is used to rollback any active transaction to a consistent state. This log is created in the current directory and named 'CAPGNZ.TX'. If any securities employ an averaging sell method, consider using logging. There is no way for Capital Gainz to recreate corrupted open information for securities that use the single category or double category selling method, as the average price depends on the shares sold as well as the open shares, and Capital Gainz can't assume that you didn't delete any sold shares records. Whether or not you turn on logging, regular data backups should be done. Backing up takes only a couple of minutes, and is definitely worth the effort when compared to the cost of reconstructing lost data in the event of a media or program failure. Transaction logging has nothing to do with activity logs. Activity logs are always maintained. (Copyright 1991 by David Lee Cohen) 92 Capital Gainz Users Manual 5. Price History Interval in Days This is the interval between price history entries. If this value is set to 28, then price entries are saved every 28 days, or about every month. (I suggest using 28 for monthly price histories.) Thus, if you record purchases on 1/1, 1/15, and 1/31, only the 1/1 and 1/31 prices are saved in the Price History File. To save all price entries, enter 0 for this value. The general rules for adding price history entries are: o Always add entries with dates preceding or following all existing dates o Don't add entries that are not at least price history interval days away from the next and previous entries o If an entry causes an existing entry to be less than the specified interval away from its next and previous dates, delete the existing entry and add this entry The actual algorithm is fairly complex. The goal is to try and keep the date spread out by price history interval days. Thus, buy and sell activity may or may not result in price history entries. If you change this value to fewer days, you are asked if you want to use prices from the activity logs to fill in possible gaps. If you want to add back all price/dates from the activity logs, specify 0 first and then go back and change the interval to the desired number of days. Changing this value to more days results in price history entries being removed. All activity logs contain price/dates, so there is no danger of losing activity information by changing the Price History File. The Price History File is just a tool to use for security analysis. 6. Backup Command You enter the DOS command to be used to backup data files. Since most users already have backup or compression utilities, Capital Gainz allows you to use tools that you are already familiar with. However, only a single DOS command line can be entered, so to backup using DOS' COPY command you would have to write a batch file, and specify that batch file as the backup command. Some examples of backup command entries would be : (Copyright 1991 by David Lee Cohen) 93 Capital Gainz Users Manual - If PKZIP is available: PKZIP -U A:CGDATA.ZIP *.DAT *.K01 - If the 4DOS shell is installed: COPY *.DAT *.K01 A: - If a batch file named BACKUP.BAT is used: BACKUP Where the contents of BACKUP.BAT could be: COPY *.DAT A: COPY *.K01 A: As these commands show, the data files that must be backed up are identified by the DOS wildcards *.DAT and *.K01. Most users have access to at least one data compression utility, which should be used to conserve backup disk space and also to speed up the floppy disk transfer. This field is initialized to CAPGNZBU A. CAPGNZBU.BAT is a simple DOS batch file included with Capital Gainz. It simply copies the data files to the specified disk drive. 7. Printer Attributes Several global settings are specific to printing reports. a. Append Reports You can choose to either append or overwrite files when reports are sent to a DOS file. A temporary file, 'CAPGNZ.TMP', is used in the appending process. If you choose not to append reports, existing files will be overwritten without warning. b. Lines Per Page You can specify the number of report lines printed on each page. The default setting of 60 should work with most printers. For most daisy wheel and dot matrix printers, this value can be set to 66 lines per page, resulting in some paper savings. (Copyright 1991 by David Lee Cohen) 94 Capital Gainz Users Manual c. Line Draw Chars This setting can be changed for printers that don't support the extended ASCII line drawing characters. If a report prints garbage where lines should be, then the printer either does not support these characters or the dip switch settings should be changed. Most printers support the line drawing characters. However, this feature can be turned off, with the alternate printable ASCII characters '-' and '=' being substituted for the extended ASCII characters. B. Select Screen Colors You get to the Select Screen Colors screen from a function key on the Global Settings Form. This form lets you customize the screen colors. Screens are grouped into 7 types: o Security screens, such as the Security Table and the Security Summary screen o Activity screens, such as the Activity Menu o Buy Activity screens, such as the Buy Shares Form and the Open Shares Log Table o Sell Activity screens, such as the Sell Shares Form and the Sold Shares Log Table o Distribution activity screens, such as the Record Distribution Form and the Distribution Log Table o Broker/investment Company screens, such as the Broker/Investment Company Form and the Broker/Investment Company Table o Other screens, such as the Report Menu and the Global Settings Form These 7 types are further divided into screen kinds: o Forms, such as the Security Form o Tables, such as the Open Shares Log Table o Other, such as the Activity Menu The screen types and kinds are displayed as a matrix on the Select Screen Colors screen. This screen and the Pick Foreground and (Copyright 1991 by David Lee Cohen) 95 Capital Gainz Users Manual Background Colors screen are always white on black, except where actual color settings are shown. The matrix on the Select Screen Colors screen shows 'Form', 'Table', and 'Other' in the currently selected background/foreground colors for each screen type. To change the colors for a screen type/kind, position the pointer and hit ENTER. This will bring up the Pick Foreground and Background Colors screen. Make sure to hit CNTL-ENTER to save the changes on the Select Screen Colors screen. C. Pick Foreground and Background Colors The Pick Foreground and Background Colors screen is brought up by hitting ENTER for a screen type/kind on the Select Screen Colors screen. At the top of the screen is an example of the screen type/kind's currently selected colors. The two rows of color blocks show the colors available - some of these may appear identical, depending on the monitor being used. To select the foreground or background color, position the pointer under the desired color in the row and hit ENTER. The example at the top of the screen is updated to show what the color combination looks like. To accept the colors, enter 'Y' to 'Accept Colors'. Otherwise, enter 'N'. The Pick Foreground Colors screen tries to prevent color combinations that are unreadable. However, it's up to you, assisted by the displayed example, to select reasonable color combinations. D. Use Activity Logs As mentioned in the description of the price history interval, this screen pops up when you complete the Global Settings Form if you specified fewer number of days for the interval. If you answer 'Y', the activity logs are scanned for date/price pairs to fill in gaps in the Price History File resulting from the smaller interval. If you answer 'N', then the activity logs are not scanned. (Copyright 1991 by David Lee Cohen) 96 Chapter X. - Analysis Capital Gainz does not provide extensive analysis tools, nor does it include graphics. However, a variety of calculations and reports are available to keep you on top of your portfolio's performance. The goal of this chapter is to point out what Capital Gainz offers for analysis, and also mentions some generally accepted rules of investment. For specific information and advice, you should consult other sources, such as the business page of your local newspaper, investment books, investment newsletters, and financial advisors. A. Rounding Before discussing calculations, a word on rounding is in order. You may see a discrepancy between the open value and gain/loss figures in the Security Table/Portfolio Report and the Open Shares Log/Open Shares Detail Report/Security Summary/Security Summary Report. For performance considerations, the Security Table multiplies the cumulative number of shares by the current price to get the total open value. However, the other screens and reports do a record by record calculation, rounding each individual record's open value. Any resulting discrepancy should be insignificant. B. Open Shares Gain/Loss The first step in analysis should be checking the gain/loss on your open shares. You can see these figures in the Security Table, the Portfolio Report, the Security Summary, the Security Summary Report, and the Open Shares Detail Report. Most of the advice I've read boils down to: 'Cut your losers, ride your winners'. Gain/loss on open shares is calculated with: (open_shares_value - open_shares_basis - open_shares_comm) where open_shares_value is: (number_of_open_shares * current_price) If a security uses a category method, then open_shares_basis is the number of open shares multiplied by the basis price. Otherwise, the open_shares_basis is the sum of the amounts paid. Open_shares_comm is the total purchase commissions paid. (Copyright 1991 by David Lee Cohen) 97 Capital Gainz Users Manual 1. Open Shares Gain/Loss Percentage The gain/loss percentage for open shares is calculated with: open_share_gain_loss ──────────────────── * 100 open_shares_basis The open_shares_basis, as defined by Capital Gainz, does not include any commissions. The reasoning behind this approach is that the commission amount was never translated into any shares. An argument could certainly be made for including the commission in the basis - in fact, this is done for the Schedule B & D Reports. 2. Broker/Investment Company Performance You can choose to subtotal the Portfolio Report by broker/investment company. This feature is useful if you rely on a broker or investment advisor for advice, as you can compare performance. These comparisons will indicate both the best stock and the best investment type recommendations. Also, the subtotals can be used to compare the performance of different mutual fund groups, or investment companies. However, in order to have a fair comparison, similar security types should be held in each mutual fund group. C. Sold Shares Gain/Loss Sold share performance is available from the Security Summary, Security Summary Report, the Sold Shares Detail Report, and the Open Information for Shares Sold Report. This figure will tell you if you've been slow to cut your losses, or quick to realize your gains. Gain/loss on shares sold is calculated with: (sold_shares_amount - open_shares_basis - sold_shares_comm - open_shares_comm) where sold_shares_amount is: (number_of_shares_sold * selling_price) If a security uses a category method, then open_shares_basis is the number of open shares sold multiplied by the basis price at the time of the sale. Otherwise, the open_shares_amount is the sum of the amounts paid for the shares sold. Open_shares_comm is the total (Copyright 1991 by David Lee Cohen) 98 Capital Gainz Users Manual commissions paid to purchase the shares. Sold_shares_comm is the total commissions paid to sell the shares. For the Schedule D Report, the gain/loss calculation results in the same values as above. However, intermediate values printed in the report deserve some explanation here. The sales price reported in the Schedule D Report is simply: sold_shares_amount However, as explained in Chapter XI - Detailed Information on Selling Methods, the cost is determined by: open_shares_basis + open_shares_comm + sold_shares_comm Thus, using some mathematics (associativity rule), you can see that the result is identical to the previous calculation: gain_loss = sold_shares_amount - cost = sold_shares_amount - (open_shares_basis + open_shares_comm + sold_shares_comm) = sold_shares_amount - open_shares_basis - sold_shares_comm - open_shares_comm 1. Sold Shares Gain/Loss Percentage The gain/loss percentage for sold shares is calculated with: sold_share_gain_loss ──────────────────── * 100 open_shares_basis The open_shares_basis, as defined by Capital Gainz, does not include any commissions. The reasoning behind this approach is that the commission amount was never translated into any shares. An argument could certainly be made for including the commission in the basis - in fact, this is done for the Schedule D Report. D. Average Price The average purchase price calculation for the shares sold is: open_shares_basis ───────────────────── number_of_open_shares This is a weighted average, telling you the average price that you (Copyright 1991 by David Lee Cohen) 99 Capital Gainz Users Manual paid for shares of the security. The average price calculation for the shares sold is: sold_shares_amount ───────────────────── number_of_sold_shares Again, this is a weighted average, telling you the average price that you realized on shares of the security. However, the Price History Table's average price calculation gives you a straight, unweighted average of the security's share prices: total_of_prices ──────────────── number_of_prices E. Current Yield Current Yield refers to the simple annual percentage you can expect from a given security. Some securities don't pay out dividends, and thus have a current yield of 0%. Only dividends are factored into the yield calculation, even though most mutual funds also regularly make capital gains distributions. Capital gains distributions are erratic, and therefore would render any calculations based on them as meaningless. The current yearly dividend payout for a security is calculated as the number of payouts per year multiplied by the amount of the last per share payout. Say you own 100 shares of a security that distributes dividends quarterly. A $25.00 dividend payment translates into $0.25 per share. Multiply by four, since the dividend is quarterly, and you have a $1.00 per share annual dividend. If the shares are trading at $10.00 each, then the current yield is 10.00%. Current Yield: (dividends_per_year * last_dividend_per_share) * 100 ──────────────────────────────────────────────────── last_price_per_share In the above example: (4 * .25) * 100 100.00 ─────────────── = ────── = 10.00% 10.00 10.00 (Copyright 1991 by David Lee Cohen) 100 Capital Gainz Users Manual Current yield is usually more important for bonds or large company mutual funds and stocks, where price appreciation is a secondary consideration. For growth or small company mutual funds and stocks, total return is more important than current yield. F. Total Return The total return calculation also includes dividends, but adds price appreciation and capital gains distributions as well. Often, investors want to know what percentage a particular one of their investments is earning. This may appear to be the simple calculation: ((((current_price * number_of_open_shares) + distributions) - cost) * 100)/cost (incorrect!) In a buy and hold situation, this would work. However, when shares are bought and sold, the calculations become complex at best, and misleading at worst. For instance, say you bought 10 shares of stock at $10.00 each, the stock paid out a $1 per share dividend, then you sold 9 shares at $10. Next, the stock again paid a $1 per share dividend and closed at $8. The calculation above yields: ((((8 * 1) + 11) - 100) * 100)/100 = -81% Even going back and factoring the sale back in would not be correct, since the second dividend would end up being applied to too many shares. Alternatively, the total return calculation tells you the percentage gain for a security over a given time period. The total return calculation is: Total Return: ((end_price - begin_price) + distributions_per_share * 100 ────────────────────────────────────────────────────────── begin_price This calculation correctly shows that you broke even in the previous example: ((8 - 10) + 2) * 100 0 ──────────────────── = ──── = 0% 10 10 Since total return uses per share values, the figure reflects the (Copyright 1991 by David Lee Cohen) 101 Capital Gainz Users Manual particular security's performance, but not necessarily your performance since you might have invested a varying amount at different periods. As mentioned earlier, the total return figure is extremely valuable for growth or small company stocks or mutual funds. It's also useful to factor price appreciation into income oriented investments. Minimally, your goal is to have total return exceed what you could get with a low-risk money market investment. G. Price History Price history allows you to quickly view a security's prices at given intervals. The Price History Table and Price History Report flag the high and low prices over the indicated period. Also, the average price is calculated and distributions over the period are shown. The distribution figures help you account for price dips, since, for example, a $10 stock should fall to $9 after a $1 dividend. The high/low prices and dates, average price, and distributions per share over the period are given at the end of the table. In addition, the individual high and low prices are flagged with an H or an L. Generally, you'd like to see a steady or gradually increasing price for income producing securities. For growth securities, you'd like to see more of a general up-trend to make up for the lack of regular dividends. H. Portfolio Allocation The Allocation Report gives you a quick look at how your funds are spread out over the provided categories. Thus, you can see if you're being conservative or risky, and weigh this against your feeling on where the market's headed. Portfolio allocation guidelines are beyond the scope of this document. Determining factors for your portfolio's weightings include how much cash you have, how old you are, and your bullishness or bearishness on the market. One rule of thumb is: the shorter term your needs are, the more conservative you should be. If you are older and will soon need the cash for retirement, a market downturn would be catastrophic for an aggressively growth-oriented portfolio. However, this same market downturn would be unwelcome, but not devastating, to a young aggressive investor. This younger investor has time on his side, and will have many chances to recoup any losses and ride the market back up. (Copyright 1991 by David Lee Cohen) 102 Chapter XI. - Detailed Information on Selling Methods While Capital Gainz provides a variety of selling methods, it is up to you to employ them correctly. This chapter provides more detailed information on each selling method. The category methods correspond to the IRS' 'average basis' designation, while all other methods correspond to the IRS' 'cost basis' designation. Capital Gainz includes an option to print out reports similar to the 1040 Form's Schedule B and D. Information in this chapter, and excerpts from IRS documents, are based on the 1990 tax laws. Short term and long term holdings are distinguished since, as of this writing, the president and Congress were considering reinstatement of favorable treatment for long term gains. A. Cost Basis The cost basis designation for identifying shares sold means that the basis for calculating gains/losses for taxes is the actual purchase price of the shares. Using any cost basis other than First-In/First-Out (FIFO) requires the investor to state in writing to the responsible investment company or brokerage which specific shares are to be sold. These shares are listed on Capital Gainz' 'Open Information for Shares Sold' screen described earlier. The FIFO selling method is assumed if specific shares are not explicitly identified. Gains and losses for each group of shares purchased and subsequently sold must be reported on the investor's income tax return for the corresponding year. 1. First-In/First-Out (FIFO) and Last-In/Last-Out (LIFO) The FIFO method is the default method, in that the IRS assumes that the investor sells the oldest shares of a particular security first. In a long term rising market, the FIFO method usually results in the largest gains, which translates into the highest taxes. However, favorable treatment of long term gains may ease the tax burden somewhat. On the other hand, using the FIFO method in a long term falling market would usually result in the smallest gains, or largest losses. If the investor uses the LIFO method no special documentation identifying the specific shares sold must be maintained. In a long term rising market, the LIFO method usually results in the smallest gains, possibly even a loss. In this case, you can realize smaller gains using the LIFO method, although less favorable short term tax rates may apply. However, using the LIFO method in a (Copyright 1991 by David Lee Cohen) 103 Capital Gainz Users Manual long term falling market would usually result in the largest gains, or smallest losses. 2. Max Gain/Min Loss (MAX) and Min Gain/Max Loss (MIN) Regardless of market trends, the MAX selling method results in the maximum gain or minimum loss without consideration for the holding period. Likewise, the MIN selling method results in the minimum gain or maximum loss without consideration for the holding period. These options are useful for the investor whose yearly income fluctuates, as it allows him/her to realize the largest gains in the lower income years and the smallest gains or even losses in the higher income years. This strategy effectively minimizes the tax burden because the lowest tax rates are applied to the largest gains. 3. Specific Identity (ID) Individual purchases, or fractions of individual purchases, can be sold using the ID selling method. Specific share identification is usually used to maximize or minimize gains, but investors can do this automatically through the MAX and MIN selling methods. B. Average Basis IRS Publication 564, 'Mutual Fund Distributions', will be used to describe the category, or averaging, selling methods. Note that these methods can only be used with mutual funds. According to the IRS publication: You may choose to use an average basis to figure your gain or loss when you sell all or part of your shares in a regulated investment company, if you acquired the shares at various times and prices, and you left the shares on deposit in an account handled by a custodian or agent who acquires or redeems those shares. Once you elect to use an average basis, you must continue to use it for all accounts in the same regulated investment company. You may specify cost basis for shares in other mutual fund companies. To figure average basis, you can use either the double category method or single category method. You choose to use the average basis of mutual fund shares by clearly showing on your income tax return, for each year the choice applies, that you used an average basis in reporting gain or loss from the sale or transfer of the shares. You must specify whether you used the single category or the double category method in determining average basis. The (Copyright 1991 by David Lee Cohen) 104 Capital Gainz Users Manual choice is effective until you get permission from the Internal Revenue Service to revoke it. Once you sell shares of a security using one of the category methods, Capital Gainz prohibits you from selling shares of that security using any other method. Although it's not clear from the IRS publication, Capital Gainz applies this restriction by security, not by broker/investment company. Also, once any shares in a category are sold, then migration, or demigration, of shares between categories is based on the originating category's average price. Otherwise, if no shares in a category have been sold, then the actual purchase price is used in migration or demigration. 1. Single Category Method According to IRS Publication 564: All shares are included in a single category. The adjusted basis of each share is the total adjusted basis of all shares in the category at the time of a disposition divided by the number of shares in the category. In determining the holding period, the shares disposed of are considered to be those shares acquired first. Capital Gainz' automatically maintains the adjusted basis for those securities employing the single category selling method. Shares are sold first-in/first-out using the average basis described above. 2. Double Category Method According to IRS Publication 564: All shares in an account at the time of each disposition are divided into two categories: short term and long term. Shares held [holding period] or less are short term. Shares held longer than [holding period] are long term. The adjusted basis of each share in a category is the total adjusted basis of all shares in that category at the time of the disposition divided by the total shares in the category. You may specify, to the custodian or agent handling your account, from which category the shares are to be sold or transferred. The custodian or agent must confirm in writing your specification. If you do not specify or receive confirmation, you must first charge the long term category and then, any remaining shares sold against the short term category. (Copyright 1991 by David Lee Cohen) 105 Capital Gainz Users Manual After you have held a mutual fund share for more than [holding period], you must transfer that share from the short term category to the long term category. When you make the change, the basis of a transferred share is its actual cost or adjusted basis to you, or if some of the shares in the short term category have been disposed of, its basis under the average basis as explained next. The basis of the undisposed shares left in the short term category that are changed to the long term category is the average basis of the shares in the short term category at the time of the most recent disposition from this category. Capital Gainz' automatically maintains the short term and long term average basis for shares of securities employing the double category selling method. In addition, on startup Capital Gainz' will 'migrate' any short term shares to the long term category if the number of elapsed days between the purchase date and the current date exceeds the specified holding period. When using the double category method, it is extremely important to verify the accuracy of your computer's system date and your specified holding period. Capital Gainz' will 'migrate' shares from the short term category to the long term category if the holding period is decreased, or 'demigrate' shares from the long term category to the short term category if the holding period is increased. C. Cost and Sales Price In the Schedule D Report, the selling amount is used as the sales price. The cost is calculated by adding the purchase commission, the selling commission, and the purchase amount. According to the IRS' 'Instructions for Form 1040', Column (d) - Sales Price: Enter in this column [column (d)] either the gross sales price or the net sales price from the sale. If you sold stocks or bonds and you received a Form 1099-B or similar statement from your broker that shows gross sales price, enter that amount in column (d). However, if Form 1099-B (or your broker) indicates that gross proceeds less commissions and option premiums were reported to IRS, enter that amount in column (d). If the net amount is entered in column (d), do not include the commissions and option premiums in column (e). And, according to the IRS' 'Instructions for Form 1040', Column (e) - Cost or Other Basis: Increase your cost or other basis by any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums before making an entry in column (e), unless you (Copyright 1991 by David Lee Cohen) 106 Capital Gainz Users Manual reported the net sales price in column (d). For mutual funds, IRS Publication 564 states: The original basis of your mutual fund shares is usually their cost or purchase price. The purchase price includes any commissions paid for the purchase. Publication 564 further states that: The fee you pay to acquire or redeem shares of a mutual fund is not deductible. Add the fee you pay to acquire the shares to their cost. A fee paid to redeem the shares usually is a reduction in the redemption price. These excerpts from IRS documents led to the calculations for sales and basis amounts. Capital Gainz always assumes that the 1099-B forms that your receive include the gross selling amount, not the net amount. Make sure you take this into consideration when reconciling your taxes. Finally, this is my interpretation of the tax laws, as stated by the IRS documents. I am not responsible for any errors, and adamantly refuse to accompany anyone to an audit. D. Taxing Dividends and Capital Gains As described in Chapter V - Securities, securities whose dividends are exempt from taxes should be put in one of the tax free security type categories. While the Schedule B Report will note the dividends as tax free, any capital gains realized from sales will be reported correctly on the Schedule D Report. On the other hand, any securities completely free from taxation, such as a mutual fund held in an IRA account, should be defined as tax exempt in the Security Form. (Copyright 1991 by David Lee Cohen) 107 Capital Gainz Users Manual Chapter XII. - Investment Strategies for the Small Investor This section describes a few of the more common strategies employed by the small investor who wishes to invest small amounts of cash over a period without being defeated by commissions. These strategies are provided for reference only, and their inclusion here does not represent investment advice. Likewise, no statement or statements contained in this or any other document or program associated with Capital Gainz should be taken as representing investment advice in any shape, form, or manner. A. Dollar-cost averaging Dollar-cost averaging refers to the discipline of investing a small amount of money in specific securities at set intervals. The reasoning is that rigorous adherence to this approach guarantees that you'll buy the most shares when the share price is the lowest. Due to the prohibitively high commissions charged on stock and bond purchases through a broker, this strategy usually employs mutual funds as the investment vehicle. For example, if you invested $100 invested in Mutual Fund X at the start of each month, and the share prices at the start of each month for a given 6 month period were $20, $15, $10, $10, $11, and $14 : ──────────────────────────────────────────────── Month Amount Price Shares ──────────────────────────────────────────────── 1 $100 $20 5.00 2 $100 $15 6.67 3 $100 $10 10.00 4 $100 $10 10.00 5 $100 $11 9.09 6 $100 $14 7.14 ──────────────────────────────────────────────── $600 $13.33 47.90 The total cost of the 47.90 shares is $600, and they are now worth (47.90 * $14) = $670.60 - even though the share price is 30% less than at the beginning. If you had invested all $600 at the beginning, the 30 shares purchased would be worth $420, a loss of $180 compared to the dollar-cost averaging method which resulted in a gain of $70.60. Of course, if you had perfect timing, you would purchased 60 shares for $10 each, yielding a gain of 60 * ($14 - $10) = $240. (Copyright 1991 by David Lee Cohen) 108 B. Mutual Funds Commissions charged for buying and selling shares of stock through a brokerage, even a deep discount brokerage, are prohibitively high if you can't afford to buy round lots. The minimum commission charged is generally around $30, plus an odd lot differential is usually charged for purchasing or selling less than 100 shares. Mutual funds, however, often have very little or even no associated commission, especially when purchased directly from the investment company. Thus, they are an ideal choice for the small investor who wishes to dollar-cost average and diversify without spending a fortune on commissions. On the other hand, all mutual funds do charge an expense fee, but this fee is usually in the range of only 1-2% annually. C. Dividend Reinvestment Plans (DRPs) Dividend reinvestment plans, or DRPs, provide an alternative to mutual funds for the small investor who wants to pick stocks but avoid paying large commissions. These plans allow you to automatically purchase shares by reinvesting dividends, or to purchase additional shares through regular monthly or quarterly payments. The shares are usually purchased through the company itself, so usually no fee, or a very small fee, is charged. When you sell shares, normal brokerage fees are usually charged. You can also elect to receive the shares, and then turn around and sell them through a discount broker. The advantages to DRPs are that you get the low overhead benefits associated with a mutual fund while retaining the freedom to select individual securities. Also, some companies actually give you a discount of 5% on shares purchased with reinvested dividends. The disadvantages to DRPs are: you are normally limited to a single day a month or quarter to purchase and/or sell shares, often you must own shares of the company prior to enrolling in the plan - which of course forces you to pay a brokerage commission at least once, and although several hundred companies offer these plans you're still forced to limit your investment opportunities. 1. More Information on DRPs The best source of information on DRPs is: Evergreen Enterprises P.O. Box 763 Laurel, MD 20707-0763 Evergreen Enterprises publishes 'The Guide to Dividend Reinvestment Plans', a loose-leaf service providing up-to-date information on dividend reinvestment plans. This guide also features regular (Copyright 1991 by David Lee Cohen) 109 Capital Gainz Users Manual quarterly updates. Evergreen also publishes 'The Directory of Companies Offering Dividend Reinvestment Plans', a brief directory of participating companies and contacts. This directory also includes notes about investment limits and discounts. As of February, 1991, prices were: Directory of Companies Offering Dividend Reinvestment Plans: $28.95 Guide to Dividend Reinvestment Plans: $130 for 1 year subscription Contact Evergreen Enterprises directly for these two excellent publications. Also, THE MONEYPAPER newsletter is a strong proponent of DRPs. One of only four financial publications recommended by AARP, THE MONEYPAPER features a 'Buy One Share' program. This program allows you to save on commissions when purchasing the initial share required by most DRPs. For a sample issue: THE MONEYPAPER 930 Mamaroneck Avenue Mamaroneck, NY 10543 (914)-381-5400 (Copyright 1991 by David Lee Cohen) 110 Capital Gainz Users Manual Index account number . . . . . . . . . . . . 17, 52, 53, 70, 73, 74, 88, 89 Activity Detail Report . . . . . . . . . . . . . . . . . . . . 24, 68, 73 Log . . . . . . . . . . . . . . . . . . . 11, 18, 19, 62, 73, 79 Log Menu . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Menu . . . . . . . . . . . . . . . . . 16, 25, 26, 80, 83, 86, 95 Allocation Report . . . . . . . . . . . . . . . . . . . . . 23, 67, 71, 102 Table . . . . . . . . . . . . . . . . . . . . . . 23, 66, 67, 71 append reports . . . . . . . . . . . . . . . . . . . . . . . . 22, 94 average price . . 1-3, 33, 35, 51, 59, 62-64, 70, 78, 79, 81, 92, 99, 100, 102, 105 backup . . . . . . . . . . . . . . . . . . . 6, 22, 25, 60, 63, 92-94 basis v, 11, 12, 29, 30, 32, 34-46, 70, 73-76, 79, 84, 97-99, 103-107 bond . . . . . . . . . . . . . . . . . 1, 13, 53, 56-58, 67, 71, 108 Broker/Investement Company change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Broker/Investment Company . . 4, 7, 10, 12, 16, 20, 23, 25, 49, 52-54, 59, 68, 70, 88-90, 95, 98, 105 add . . . . . . . . . . . . . . . . . . . . . . . . . . . 88, 89 delete . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 File . . . . . . . . . . . . . . . . . . . . . . . . . 10, 20, 52 Form . . . . . . . . . . . . . . . . . . . . . . . . . 88, 89, 95 Lookup Table . . . . . . . . . . . . . . . . . . . . . . . 52, 59 Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Performance . . . . . . . . . . . . . . . . . . . . . . . . . 98 Report . . . . . . . . . . . . . . . . . . . . . . 23, 70, 88, 89 Table . . . . . . . . . . . . . . . . . . 23, 25, 70, 88, 89, 95 busy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Buy Shares Form . . . . . . . . . . . . . . 26, 27, 48, 80, 81, 92, 95 CAPGNZ . . . . . . . . . . . . . . . 4, 6-10, 62, 66, 67, 69, 92, 94 capital gains . . . . . . 1, 3, 12, 48, 49, 61, 73, 91, 100, 101, 107 clock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 35 colors . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 95, 96 command keys . . . . . . . . . . . . . . . . . . . . . . . . . 5, 13 commission . 11, 17-19, 22, 27-30, 32, 36-46, 61, 62, 72, 74-76, 79, 82, 98, 99, 106, 109 Confirm add . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 delete . . . . . . . . . . . . . . . . . . . . 21, 54, 82, 85, 87 Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 update . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 current yield . . . . . . . . . . 17, 47, 50, 51, 53, 69, 70, 100, 101 Dates Form . . . . . . . . . . . . . . . . . . . . . . 60, 63, 72, 79 (Copyright 1991 by David Lee Cohen) 111 Capital Gainz Users Manual DCAT . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 35, 47 delete range . . . . . . . . . . . . . . . . . . . . . . . 82, 85, 87 demigrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Device Form . . . . . . . . . . . . . . . . . . . . 36, 61, 66, 67, 69 disk space . . . . . . . . . . . . . . . . . . . . . . 9, 10, 22, 94 Distribution 4, 7, 12, 13, 15, 19-24, 27, 33, 47-50, 52, 54, 63, 64, 68, 73, 76-80, 83, 85-87, 92, 95, 102 add . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 delete . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Detail Report . . . . . . . . . . . . . . 24, 68, 76, 77, 86, 87 File . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 19 Log Table . . . . . . . . . . . . . . . . 24, 76, 77, 85-87, 95 Type . . . . . . . . . . . . . . . . . . . 12, 47-50, 64, 76, 77 Type Lookup Table . . . . . . . . . . . . . . . . . . . . 47, 49 Dividends . . . . 1, 2, 12, 17, 47-50, 53, 54, 56, 57, 61, 71, 73, 92, 100-102, 107, 109 per year . . . . . . . . . . . . . . . . . . . . . . . 49, 50, 53 reinvestment plan . . . . . . . . . . . . . . . . . . . . 17, 52 dollar-cost . . . . . . . . . . . . . . . . . 1, v, vi, 1, 3, 108, 109 double category . . . 18, 28, 30, 31, 33, 35, 43, 62, 91, 92, 104-106 Enter Number of Shares to Sell Form . . . . . . . . . . . . . . . . 35 extended ASCII . . . . . . . . . . . . . . . . . . 10, 22, 23, 68, 95 fees . . . . . . . . 12, 19, 20, 47, 49, 50, 58, 61, 73, 76, 106, 109 FIFO . . . . . . . . . . . . . . . . . . . . . . 33, 34, 37, 47, 103 File Form . . . . . . . . . . . . . . . . . . . . . . . 61, 66, 67, 69 File Structure . . . . . . . . . . . . . . . . . . . . . . . vii, 17 first-in/first-out . . . . . . . . . . . . 1, 2, 13, 33, 37, 103, 105 fixed income . . . . . . . . . . . . . . . . . . . . . . . 66, 67, 71 formfeed . . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 68 Fraction-to-Decimal Table . . . . . . . . . . . . . . . 27, 33, 48, 60 function keys . . . . . . . . . . . . . . . . . . . 6, 13, 52, 60, 88 Global Settings . . vii, 7, 10, 20, 21, 23, 25, 48, 68, 79, 91, 94-96 File . . . . . . . . . . . . . . . . . . . . . . . . . 10, 20, 21 Form . . . . . . . . . . . . . . . . . . . . . 25, 48, 91, 95, 96 help . . . . . . . . . . . . . . . . . . . vi, vii, 4, 6, 16, 17, 102 holding period . . . . . . . . . 11, 19, 21, 28, 35, 37, 91, 104-106 ID . . . . . . . . . . . . . . . . 1, 15, 17, 31, 33, 34, 46, 47, 104 investment company . . . 2, 4, 7, 10, 12, 13, 16, 17, 20, 23, 25, 49, 52-54, 59, 68, 70, 88-90, 95, 98, 103-105, 109 IRS . . . . . . . . . . . . . . . . . . . . . . . . 1, 11, 59, 103-107 keyboard . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 13 LICENSE . . . . . . . . . . . . . . . . . . . . . . . . . 4, 7, 10, 15 LIFO . . . . . . . . . . . . . . . . . . . . . . 33, 34, 38, 47, 103 limits . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 110 line draw . . . . . . . . . . . . . . . . . . . . . 10, 22, 23, 68, 95 lines per page . . . . . . . . . . . . . . . . . . . . 22, 23, 68, 94 load . . . . v, 12, 18, 19, 27, 28, 32, 36, 37, 61, 72, 74-76, 79, 82 (Copyright 1991 by David Lee Cohen) 112 Capital Gainz Users Manual log transactions . . . . . . . . . . . . . . . . . . . . . . . 21, 92 logging transactions . . . . . . . . . . . . . . . . . . . . . 13, 92 long term . . 11, 12, 18, 21, 28-31, 35, 37-44, 46-50, 56, 57, 62, 74, 75, 77, 84, 91, 103-106 Lookup Table 6, 14, 26, 27, 31, 33, 47-49, 52-54, 59, 79, 80, 82, 83, 85, 86 Main Menu . . . . . . . . . . . . vii, 16, 22, 25, 26, 51, 79, 88, 91 MAX . . . . . . . . . . . . . . . . . . . . . . . 33, 34, 39, 47, 104 maximum gain/minimum loss . . . . . . . . . . . . . . . . . 13, 39, 40 maximum loss/minimum gain . . . . . . . . . . . . . . . . . . . 40, 41 migrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 MIN . . . . . . . . . . . . . . . . . . . . . . . 33, 34, 40, 47, 104 multi user . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 multiple portfolio . . . . . . . . . . . . . . . . . . . . . . . . 4 mutual fund . . 1, 12, 13, 17, 20, 28, 36, 50, 52, 54-59, 66, 71, 98, 104, 106-109 notes . . . . . . . . . . . . . . . . . 18-20, 27, 32, 37, 48, 58, 110 Open Information for Shares Sold Report . . . . 23, 24, 32, 36, 68, 98 Open Information for Shares Sold Table . . . . . . . . . . . . 32, 36 Open Shares . . . 1-3, 7, 9, 13, 15, 17-19, 24, 27-48, 51, 54, 61-63, 68-70, 72-74, 79, 80, 81-84, 86, 91, 92, 95, 97, 98 add . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 delete . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Detail Report . . . . . . . . 24, 51, 68, 70, 73, 74, 80, 82, 97 File . . . . . . . . . . . . . . . . . . . . . . . . . 9, 18, 84 gain/loss . . . . . . . . . . . . . . . . . . . . . . . . 97, 98 Log Table . . . . . . . . . . . . . . . . 24, 73, 74, 79-81, 95 overwrite . . . . . . . . . . . . . . . . . . . 22, 62, 66, 67, 69, 94 Pick Foreground and Background Colors . . . . . . . . . . . . . 95, 96 Portfolio Report . . . . . . . . . . . 23, 52, 61, 62, 68-70, 97, 98 Price History . 2, 3, 7, 10, 13, 20-22, 24, 27, 33, 52, 53, 60, 63-66, 71, 72, 77, 78, 80, 81, 83, 84, 93, 96, 100, 102 add . . . . . . . . . . . . . . . . . . . . . . . . . . . 64-66 change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 delete . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 File . . . 3, 10, 20, 22, 27, 33, 60, 64, 80, 81, 83, 84, 93, 96 interval . . . . . . . . . . . . . . . . . . . 20, 21, 65, 93, 96 Report . . . . . . . . . . . . . . . . . 24, 64, 66, 77, 78, 102 Table . . . . . . . . . . . . . . . 24, 63-66, 77, 78, 100, 102 Price Update Form . . . . . . . . . . . . . . . . . . . . . . . 60, 64 printer . . . . . . . . . . . . 10, 22, 23, 32, 36, 61, 66-69, 94, 95 progress . . . . . . . . . . . . . . . . . . . . . . . 1, 16, 63, 68 README . . . . . . . . . . . . . . . . . . . . . . . . . 4, 7, 10, 15 Record Distribution Form . . . . . . . . . . . . . 47, 48, 85-87, 95 Reinvest . . . . . . . . . . . . . . . . . . . . . . . 21, 27, 48, 92 Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 48, 92 Report Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 (Copyright 1991 by David Lee Cohen) 113 Capital Gainz Users Manual Report Menu . . . . . . . . . . . . . . . . . . . . 16, 23, 25, 68, 95 reports . 1, 8, 10, 12, 15, 17, 21-25, 53, 59, 68, 70-73, 94, 97, 98, 103 rounding . . . . . . . . . . . . . 27, 31, 44, 45, 47, 48, 51, 70, 97 SCAT . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 35, 47 Security . . vi, 1, 2, 4, 7, 9, 12, 13, 15-21, 23-33, 35, 36, 41-45, 47-54, 56-64, 66-77, 79-83, 85-89, 91-93, 95, 97, 98, 100-103, 105-109 add . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 54 change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 delete . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 File . . . . . . . . . . . . . . . . . . . . . 17, 29, 30, 41-45 Fixup Form . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Form . . . . . . . . . . . . . . . . . . . . . 50, 52-54, 95, 107 Lookup Table . . . 26, 27, 31, 33, 47, 48, 79, 80, 82, 83, 85, 86 Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Summary . . . . . . . . . 23, 24, 60, 61, 68, 71-73, 95, 97, 98 Summary Report . . . . . . . . . . . . 23, 61, 68, 72, 73, 97, 98 Table 17, 20, 23, 25, 27, 33, 48, 51-54, 60-63, 66, 69, 80, 83, 86, 95, 97 Type . . . . . . . . . . . 13, 23, 52-54, 56, 57, 61, 66, 72, 107 Type Lookup Table . . . . . . . . . . . . . . . . . . . . 53, 54 Security/Account Number Information . . . . . . . . . . . . 70, 88, 89 Select Screen Colors . . . . . . . . . . . . . . . . . . . . . 95, 96 Select Shares to Sell Table . . . . . . . . . . . . . . . . . . 31, 35 Select Table . . . . . . . . . . . . . . . . . . . . . . . 6, 35, 72 sell 1-3, 12, 13, 17, 24, 26, 27, 31-35, 43, 45, 46, 48, 53, 54, 59, 68, 80, 82-84, 86, 92, 93, 95, 99, 104, 105, 109 Sell From Double Category Form . . . . . . . . . . . . . . . . . . 35 Sell Shares Form . . . . . . . . . . . . . . . . 31-33, 35, 82-84, 95 Selling Method . 2, 3, 13, 17, 18, 28-33, 35-41, 43, 46, 53, 59, 62, 84, 91, 92, 103, 104, 105, 106 Lookup Table . . . . . . . . . . . . . . . . . . . . . 33, 53, 59 short sales . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3 short term . . 12, 18, 19, 21, 23, 28-31, 35, 38-49, 56, 57, 61, 62, 72-74, 76, 77, 84, 91, 103, 105, 106 Show Table . . . . . . . . . . . . . . . . . . 6, 27, 32, 33, 60, 66 single category . . . . . . . . . 29, 30, 33, 35, 41, 43, 92, 104, 105 single portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 4 single user . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Sold Shares . . 2, 3, 7, 9, 13, 18, 19, 22, 24, 31, 32, 37-46, 54, 61, 68, 72, 75, 76, 79, 82-85, 92, 95, 98, 99 add . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 delete . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Detail Report . . . . . . . . . . . . 24, 68, 75, 76, 83, 85, 98 File . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 18 gain/loss . . . . . . . . . . . . . . . . . . . . . . . . 98, 99 (Copyright 1991 by David Lee Cohen) 114 Capital Gainz Users Manual Log Table . . . . . . . . . . . . . . . . 24, 75, 76, 82-85, 95 stock . . v, vi, 2, 3, 12, 13, 17, 52-56, 58, 63, 66, 67, 71, 91, 98, 101, 102, 108, 109 stock index . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Stock Split . . . . . . . . . . . . . . . . . . . . . . . . . . 63, 91 Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 symbol 15, 17-20, 26-28, 31-33, 36, 47-49, 51-54, 60, 61, 63, 69, 72, 74-77, 79-83, 85-87 System Function Flow . . . . . . . . . . . . . . . . . . . . . . . 16 Tax . v, vii, 1-3, 17, 23, 33, 51, 53, 56-58, 69-71, 91, 103, 104, 107 Schedule B . . . . . 17, 23, 53, 56, 57, 68, 70, 71, 98, 103, 107 Schedule D . . . . . . . . 1, 2, 11, 23, 68, 70, 71, 99, 106, 107 tax deferred . . . . . . . . . . . . . . . . . . . . . . . 51, 69 tax exempt . . . . . . . . . . . . . . . . . . . 17, 53, 71, 107 tax form . . . . . . . . . . . . . . . . . . . . . . . . 1, 2, 23 tax year . . . . . . . . . . . . . . . . . . . . . . . . . 23, 71 total return . . . . . . . . . . . 1, 2, 20, 23, 50, 61, 73, 101, 102 unsell . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 84 yield . vi, 2, 4, 17, 19, 47, 50, 51, 53, 58, 61, 69, 70, 72, 100, 101 yield-to-maturity . . . . . . . . . . . . . . . . . . . . . . . . . 4 (Copyright 1991 by David Lee Cohen) 115