The Grumpy Editor's Guide to Personal Finance Managers, Part 2 [LWN.net]

The Grumpy Editor's Guide to Personal Finance Managers, Part 2

Posted Sep 29, 2005 12:30 UTC (Thu) by sean.hunter (guest, #7920)
Parent article: The Grumpy Editor's Guide to Personal Finance Managers, Part 2

The use of the word "commodity" to describe "Type of investment" in the share portfolio part of GnuCash is nonsensical. "Instrument", "Investment" or even "Thingy" would have been much better choices.

A commodity in financial terms is specifically not an equity share. It is usually a specific quantity and grade of a tangible physical thing, often a mining or agricultural product. Gold, Pork Bellies, Soya Beans, Brent Crude and Electricity are all commodities. msft, scox etc are not.

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The Grumpy Editor's Guide to Personal Finance Managers, Part 2

Posted Oct 3, 2005 9:15 UTC (Mon) by ekj (guest, #1524) [Link]

Agreed. It is an example of exposing to the user the fact that two (from the point of view of the user) separate entities are *implemented* the same way.

From the point of view of Gnucash (or any finance-application) commodities and stock are very similar both:

You can buy and sell them.
Prices (and thus value) change over time.
There can be fees associated with buying or selling them.
The prices are denoted in some currency, and can frequently be found online.

On the other hand, the two are not identical, even from the POV of the program because:

Stock can split, or join operations that make no sense for a commodity. 100kg of gold won't spontaneously transform into 200kg of gold at half the price.
Stock can pay dividended. I don't know that commodities ever do.