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My development logbook

Investment Survival Note 7 - Sound Accounting for Investors

As an investor it is important to do proper accounting to keep track of the P/L of his/her holdings. Ideally the holding should be marked to market frequently if not monthly. All cost and income should be recorded. It helps an investor to have a realistic picture of the health of his/her investment.

An investor should also maintain a reserve account which sets aside cash for tax on realised and unrealised profit.

The book was first written in 1936, so, I reckon, it did require work and discipline for average do-it-yourself investors to keep track of P/L back in those days. Today, with all these online resources such as Yahoo Finance, it is a lot easier to do so.

Quick link to The Battle for Investment Survival by Gerald M. Loeb