I have started to use the margin option on my brokerage account.
In Portfolio Performance, buying shares on margin results in a negative cash value on the associated deposit account, which subsequently ruins some of the performance indicators available in the program (internal rate of return, etc.).
My current solution, to avoid to mess with the performance indicators, is to create a fictitious deposit entry equal to the amount of money borrowed as soon as start using the margin. Later, when I no longer need the margin, I create a withdrawal entry to offset the original entry.
This way, the IRR does not reflect the rate of return on “my invested capital”, but it at least shows the rate of return on the “total invested capital”. (This is still better than a completely distorted percentage on the performance side).
The way I do this is not a very elegant solution, and it also takes a lot of time to create the various fictitious entries when multiple stock trades are done on margin.
I was wondering if there is a better solution to deal with margin / debit money.
Have any of you found another way to do this?
Thanks!