Q2017 Windows: Help needed managing investments on Quicken Premier 2017 (starting with how to kill and avoid placeholders)

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This thread is for folks that have worked just enough w/ Quicken investment accounts to get into trouble - including placeholders and lots of wasted time....   (Btw, the placeholders were pre-Quicken Primer 2017 vintage.)

Just loaded Quicken Primer 2017 for Windows 10 in US, after using basic Quicken (Deluxe?) for more than a decade.

Investments were initally tracked only as Investment Expenses rather than as assets with "Managing Investments".

With retirement then in the distant future and taxable accounts never considered a possibility, the investment software was never fully appreciated or well-learned.

Now, post-retirement, pesky placeholders have been springing up and it is clear there is much to learn.  A Readers Digest for Dummies version of "Managing Investments" is most preferred.  (Videos would be great!)

I have 
  • Tied starting investment accounts (w/ short downloaded history) over, but placeholders sprouted again. 
  • Now have copies of some investment accounts....
  • Considering the approach described in this thread 
  • Need Investing 101 courses or videos that will help clean up this and avoid future messes.
Where do I start?  Help!

Much obliged,
Snuff
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Snuffy

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Posted 4 days ago

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QPW

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Consider this a "first installment".  I'm just going to talk about placeholders in this post, and I will add other posts on what I think can be done to get you to the point where you can put them in the past.
I'm going to actually be trying the methods before I suggest them so the next posts might take a bit of time for me to post them.

Placeholders are created in Quicken for two purposes.

One is to account for "adjustments", as in for some reason the shares in your Quicken account don't agree with what the financial institution has sent.  In this case instead of accepting the placeholder, a person should be trying to figure out why their is a difference and correct their transactions or understand why the financial institution is sending the wrong information.  And that can happen.  For instance Vanguard use to send the purchase transactions say at about 6PM, but wouldn't update that share balance information until about 11PM.  So I had to know to ignore that placeholder for a day.  Other possible causes are the fact that lots of financial institutions send Quicken share amounts rounded to a different amount of digits than they keep internally.  And there isn't any standard on what digit you are suppose to round to.  So there can be rounding errors.

The second reason is because Quicken is missing some information.  For Quicken to do its calculations and such it has to know when the shares were purchased, and how much they cost.
If it doesn't have that information it is going to create a placeholder.

And I will say that once the placeholders are in an account they make things "strange".  I don't have a detail list of this "strange behavior", mostly because my approach is "just don't go there!"

Before I say anything else make sure that you have this option on so that you can see the placeholders:
Edit -> Preferences -> Investment transactions -> Show hidden transactions

If you create new account, especially if you set it up for automatic download you would expect that you wouldn't have any placeholders, but that isn't necessarily true.

If you setup manually and use the dialog that asks you what securities you have and how many shares, you will notice that it never asks about that date they were purchased or the cost.
You are going to get placeholders if you use this dialog.  I always just cancel out of that, and put in buy transactions of my securities to get a manual account started.

So instead you setup with automatic entry and so you figure you won't have placeholders.
Well that is only going to be true if your financial institution has all the information available, and sends it to Quicken.  And that isn't always true  Here is the ending dialog of me creating all my Vanguard accounts in a new data file:


Placeholder!
Why?

Well let's look at one of the account's placeholders:


Notice where the placeholders showed up, right after the opening balance.

This really isn't surprising, it is simply showing that Vanguard didn't send the history back to the beginning of time.

These placeholders should be replaced with actual buy transactions.
Now if you have the full history of these and are so inclined you might actually enter every transaction buys and sells to get an accurate picture.

On the other hand you might just put in one buy transaction for each security with some kind of cost average up to that point for that security.  Mind you that if this is in a taxable account this information might not be usable as something exported to a tax program.  But frankly these days I would use the information coming from the broker instead.  After all they are going to be sending that information to the IRS and if you disagree with it, you have to get them to change their records.
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QPW

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Thanks Jim, that is good to know.
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Snuffy

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Yes, thank you, Jim.  

So the "Buy Shares" option s/b avoided as a guaranteed placeholder producer.  
There s/b a warning label when that option is clicked or, better yet, should it be an option at all since it complicates things?
Please share more insights.  A learner can sometimes be a better teacher than a professional b/c the insights tend to be fresher.  I have much to learn and want to learn it well - and quickly.
Much appreciated!

Snuff
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q.lurker, SuperUser

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@Snuffy:  No.  Neither the Buy Shares option nor the Add Shares option is prone to producing placeholders.  Indeed, either approach will or should eliminate placeholders.  

Placeholder (Adjust Share Balance) transactions get created when Quicken detects a discrepancy between what the brokerage reports as number of shares and what Quicken already has recorded as number of shares.  Since either of the two noted options can cause Quicken to have the correct, agreed upon number of shares, either option properly used should prevent the addition of a placeholder.  

Placeholders have a place, a role, in the data, but the user should not rely on placeholders to fix sloppy bookkeeping.  Similarly, the user should not rely on placeholders to fix discrepancies in information downloaded by the brokerage.    
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Jim Harman

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@Snuffy,

I agree with q.lurker. A manually entered Buy will not create a placeholder. It will however, create a negative cash balance in the account, matching the cost of the shares bought. The most straightforward way to deal with this is to also enter a matching cash Deposit prior to the Buy.

To make all the historical performance reporting look reasonable, without entering *all* the historical details for the account, you might enter correctly dated and priced Buys for your holdings as of the date you want to sync the account with Quicken, then one cash deposit on Jan 1 of the year of the oldest Buy, to make the final cash balance be zero.

Or as described earlier, you can just do Add Shares with the correct purchase dates and cost basis, but recognize that performance reporting will be incorrect for periods that include the sync date.
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QPW

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Note on "enter a matching cash Deposit prior to the Buy".

For me that can come in two forms.
The first is a transfer from another account.  As in you replicate what really happened in the real world.

The second is a balance adjustment.  And in fact you can just go to the Opening Balance transaction and change the amount there.

The key to a "balance adjustment" is the fact that you are using the syntax of [Account] for the category, where "Account" is the name of the account you are in.

This syntax is basically telling Quicken that the money has come from outside of what you are tracking in Quicken, and it should only change the balance of that account, but not any other account's balance, or any category.

Depending on if you need the money in (which you do in this case) then it would be a deposit, or a withdraw if you needed to remove some cash.
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QPW

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Now a bit about your choices for ongoing "interaction" with placeholders.

The first decision comes into play is if you are using automatic entry mode or not.
Edit -> Preferences -> Downloaded transactions -> Automatically add to investment transaction lists

Having this setting on not only enters downloading transactions automatically, it also enters placeholders automatically.

If the option isn't on, you will get prompted asking if you want to put the placeholder in, and the default is no.  On the other hand it quite easy to delete a placeholder, so as far as I'm concerned that is sort of a toss up of which is better.

But it is important to understand that this kind of placeholder it triggered by a difference in your Quicken register in comparison to what the financial institution sent.

Now just like in a banking account some people prefer to reconcile to the online balance with every download, but some rather just do this say when their statement comes out, or some other period of time.

The settings in (Compare account portfolio after download) control this:
Edit -> Preferences -> Downloaded transactions -> Edit Settings

Here you can select which accounts should do the compare automatically after the download.

Now say you elect to not automatically compare, how do you kick that off manually?
Go to the register and select the action (gear) icon and then Reconcile Shares.

Also note that reconciling an investment register has two steps.  One is ensuring that the number of shares lines up, and then the transactions that affect the cash balance are reconciled pretty much the same way you would in a banking register.

But it should be noted that a given transaction can do both, affect the number of shares and the cash balance.  So there is an interplay between the two.
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QPW

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In this post I'm going to talk about "starting over".  This in fact has nothing to do with placeholders, but it is something that was in your original question.

For this post I'm going to talk about manual entry accounts.  I will come back and talk about automatic downloading account switch over latter.  Unfortunately that is harder than the manual switch over, and it should be noted that if you plan going to automatic entry mode it isn't just as simple as going to the manual entry mode account and turning it on.  In fact it might be better not to start with a manual entry mode account.

The first thing I would like to address is the old account, which has not been maintained or not maintained properly (placeholders).

So the question that comes up is should I delete it?

Well if you delete it, the first thing to know is that any transfers from other accounts in that account the account name will change to "Unspecified Account".  So the balances in the other accounts should stay OK, but the transfers are basically "broken" at that point.  And if you wanted to fix these in the future you would have do something like a transaction report where you put in Unspecified Account in the category filter text box.  These transfers would in fact be at least partly be what would be "funding" the buys in the new account.  So it would be of value to fix them up and get them connected to the new account.

And then there is the consideration of the "value" of that information.  As in maybe it isn't any good for say tax purposely, but maybe the information is still approximately what its overall value was at any given time.  So it would be nice to keep it around just for a report like net worth.

OK lets say you leave that old account in place. If the information in this old account was good the process would be to move the securities to the new account and make a transfer of the cash to the new account.  But the information is known to be "bad".

So this part actually becomes quite simple if we are just going cut off this old account at this date, and then start the new one on this date.  You simply put in a remove shares transaction for each of your securities, for all the shares you have.  Then either use a cash balance adjustment transaction (where the "transfer account"/category is just [Old Account], where "Old Account" is the name of the account you are in).