How does the cash position work?
Almost everyone has a cash position in his or her portfolio. While most investors approach cash as a temporary asset, in reality, it should be approached as a full-fledged asset. Holding a cash position can have a major impact on the realized return of your portfolio.
For example, it pays to hold cash in falling markets, your cash position will not make a loss. Although it will also cost returns in rising markets. To make a complete return calculation, it is important that we know the cash position of all past times. With the PDT, we calculate back what your daily cash position was in the past. This way, you don't have to enter or update it yourself.
Do you enter your actions manually? Then it's important that your broker actions are entered correctly. These affect your cash position. Also pay attention to the entry date of these promotions, as this affects your return for the broker deposits.
How is my cash position calculated?
To calculate your cash position, we look at your deposits. Deposits increase the cash position within your portfolio. Do you withdraw money? Then we lower your cash position again. In addition, there are a number of other actions that we take into account:
- Transactions: When purchasing an effect, we reduce your cash position. Are you selling an effect? Then we increase your cash position again.
- Dividends: We increase your cash position when you receive dividends.
- Broker costs: Do you incur connection costs or other broker costs? Then we deduct these costs from your cash position.
It is important that all your actions are entered correctly (manually), as we use them to calculate your past cash positions.
When you invest with borrowed money via margin, a negative cash position can arise. This is because we treat margin as debt which, for example, can make your portfolio value lower because we include the 'repayment' of this 'debt'.
Due to rounding differences, there may be a small difference in the cash position of your broker(s). When necessary, we have made it possible to correct your cash position manually.