reinvested dividends question

[ATHiker95]

I've noticed that Mint is now showing actual transactions for investments under the transaction tab. I'm curious why a reinvested dividend shows up as a "sell" under category. Anyone understand the reasoning behind that?

Thanks,
Mark

[Furcifer]

Mint seems to have a hard time discriminating between different kinds of stock-related transactions. I would guess that buying and selling have to be divined from the text description sent by your broker, and if your broker is like mine, they don't always say which is which. In my case, it appears that usually the only information passed along is the actual name of the stock or fund, not whether it was bought or sold. All of my purchases and sales just wind up as "Uncategorized."

I find it curious that dividends are grouped with cap gains, rather than income. I guess Mint assumes that you will be reinvesting all your dividends. If dividends are a significant portion of your income, though, it really throws off your budget.

[mlblanchard]

Related to this, when looking at a stock chart, shouldn't reinvested dividends be reflected as gains? In other words, if I invest $100, and due to price movement I lose $10, but through reinvested dividends I earn $20, this is actually a $10 gain. Mint shows this as a $10 loss because it counts the dividends in the "price paid." I suppose you could look at it that way, but it skews the reality of the fund or stock's performance.

[davidwes]

Related to this, when looking at a stock chart, shouldn't reinvested dividends be reflected as gains? In other words, if I invest $100, and due to price movement I lose $10, but through reinvested dividends I earn $20, this is actually a $10 gain. Mint shows this as a $10 loss because it counts the dividends in the "price paid." I suppose you could look at it that way, but it skews the reality of the fund or stock's performance.

Umm. You could have taken that dividend in cash and used it to buy lunch, or other stoks. So yes it is the "price paid" for the stock because you actually paid for that dividend, just you never let the cash get to your own bank account first!

[Jefferz]

Umm. You could have taken that dividend in cash and used it to buy lunch, or other stoks. So yes it is the "price paid" for the stock because you actually paid for that dividend, just you never let the cash get to your own bank account first!

Mint is still incorrect. I just checked Mint's 1yr performance graph for RPSIX (T. Rowe Price Spectrum Income), which I own. "Comparison" graph (with "no comparison" radio button clicked) shows 0.77% return from Sep 15 '08 to Sep 15 '09.

Yahoo finance shows NAV of 11.54 on 15-Sep-08 and NAV of 11.63 on 15-Sep-09 (11.63/11.54 = 1.00779896). However, between those two times:

31-Aug-09 $ 0.038 Dividend
31-Jul-09 $ 0.044 Dividend
30-Jun-09 $ 0.05 Dividend
29-May-09 $ 0.041 Dividend
30-Apr-09 $ 0.04 Dividend
31-Mar-09 $ 0.051 Dividend
27-Feb-09 $ 0.039 Dividend
30-Jan-09 $ 0.039 Dividend
28-Jan-09 $ 0.02 Dividend
31-Dec-08 $ 0.058 Dividend
19-Dec-08 $ 0.11 Dividend
28-Nov-08 $ 0.039 Dividend
31-Oct-08 $ 0.045 Dividend
30-Sep-08 $ 0.053 Dividend

Morningstar (which gets it right) shows a 8.39% return for RPSIX for the last year, which assumes reinvested dividends. Even if you don't assume reinvestment, it should be something like an 8% return (since there's not much compounding at 8% in 1 yr).

Mint is showing only the change in NAV which is WRONG for anything that pays a dividend. You should be able to assume reinvestment or not assume reinvestment. But regardless, a dividend is part of the investment's return / performance! This stinks for people whose portfolios provide a lot of income :( .