Is there any way to make bond investment record keeping easier?

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Is there any way to make bond investment record keeping easier?

Bonds probably deserve a place in almost every investor’s portfolio, despite the recent criticisms of people who misunderstand the risks of stock market investing.

Unfortunately, however, bond investing greatly complicates your investment record keeping. The problem of accrued interest, and the twin and related complexities of bond discount and bond premium amortization, can make the process very confusing. Fortunately, you have several alternatives.
For example, one of the best alternatives you have is simply to use a bond mutual fund. By using a bond mutual fund, you offload all the complicated bond investment record keeping onto the shoulders of the mutual fund company’s accounting department. As long as you don’t pay too great a price for this accounting service, it is well worth it.
Another alternative you have to help minimize the work of recording bond investment transactions is simply to make sure that you are not trading in bonds. In other words, if you minimize the number of purchase and sales transactions you make, you do minimize the number of times that you need to work through the complexities of bond interest accrual calculations and amortizations of bond discounts and premiums.
A third alternative you have for simplifying your bond investment record keeping is this: You can use tax-deferred investment accounts, such as an individual retirement account (IRA), to invest in bonds. IRAs don’t affect your tax return. The bond interest income that you earn in an IRA, for example, doesn’t get reported on your tax return. Neither do the capital gains or losses you realized because you bought or sold a bond investment. By avoiding the need for precise bond interest and capital gain and loss calculations required for tax reporting, you can skip a lot of the complicated record keeping work.

How do I invest online with Money?

You can’t actually buy or sell securities from within the Money program. Money does provide a very interesting tool for online investing, however. If you invest online and you are using the Money program, you may be able to have your online broker provide an electronic version of your monthly statement that you can then download directly into the Money investment account registers. This service greatly simplifies your monthly record-keeping duties. It saves you from having to record all the transaction details every time a stock pays a dividend, or every time some bond pays
an interest amount. If you are interested in this feature, contact your online broker and ask whether they provide this service. If they do, ask for their instructions about how to set up the service. You will probably need to go through an application process. You might also have to pay for this service

Article Source: http://articlenexus.com

Stephen Nelson is the author of do it yourself kits for Incorporating in Wisconsin, Wisconsin S corporation, and Wisconsin limited liability company.

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