Portfolios in the Generator work with and without a cash balance.
When you create a portfolio you have the option of setting an opening balance. You are then able to switch between having or not having a balance later on, simply by modifying the portfolio and setting or clearing the opening balance. Follow these instructions to set or clear the opening balance.
Portfolios without a balance
A portfolio without a balance is the simpler of the two options. The portfolio is then a grouping of holdings with an aggregate performance.
This is useful if you're not interested in tracking the results of any particular initial cash investment, and are simply interested in seeing how your holdings are performing individually and overall.
The Cash Performance box on the dashboard will look like this:
And the transaction list will look like this, without any opening and closing balance:
You are still able to enter cash deposit and withdrawal transactions, but with no cash balance these have no meaning.
Portfolios with a balance
If you create a portfolio with an opening balance then share purchases are deducted from the balance, and share sales and dividends are credited to the balance.
This is analogous to a bank account with an opening, closing and running balance.
This is useful if you're starting with an initial cash amount (e.g. £30,000) and are interested in tracking the ongoing performance of those funds over time.
You can add cash to the portfolio and withdraw it any time (by entering deposit and withdrawal transactions).
The Cash Performance box on the dashboard will look like this:
The current balance is based on purchases deducted from the opening balance and sales and dividend transactions added to the balance.
Your transaction list will look like this with an opening and closing balance:
The balance can go negative and you will not be prevented from entering a purchase or withdrawal transaction for which there is insufficient funds.
If your portfolio has a cash balance then the portfolio value will be different to the market value of the holdings:
This image shows the portfolio value is great than the market value of the holdings because the portfolio has approximately £8915 in cash. The portfolio value is the sum of the market value of all the holdings and the current cash balance.
You can set, change or remove your portfolio opening balance by following these instructions.