Quicken can't correctly calculate the change in market value?

Setting the date on the investing tab to yesterday, Quicken says I had 85 shares of a mutual fund with a NAV of 11.75 and a market value 998.75. Setting today's date, it says I have 100 shares, NAV 9.9875, market value again 998.75 (because there was an income reinvestment). But the Day Gain/Loss column, defined as "Change in market value since previous day's closing", says I have a loss of 117.73! It appears that Quicken just multiplied today's share count by the change in share price, which obviously does not correctly reflect the change in market value. Does this bother anyone else?

Comments

  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    The loss is right.  You have more shares but the value is the same as before so each share went down.  The price usually goes down for the dividend.  If the market value is wrong you need to enter the right price by editing the price history.  
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    The pre-dividend value included the cash that you received as a dividend. When you received that dividend (even if only for an instant) the value of the MF went down ... because it no longer had the cash.
    When you reinvested the dividend, thus receiving more shares, the MF had the cash back ... but it had issued more shares.  Thus the Total Value of the MF (including everybody) remained the same, but because there were more shares issued, the value per share went down.
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  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    Reinvestment appears strange but try thinking of it as distinct transactions.  There is a distribution that reduces the price of the shares and a subsequent share purchase (not necessarily on the same day).  The day gain/loss is simply the number of shares held the day before multiplied by the change in the price.
  • rschranz
    rschranz Member ✭✭
    I am just talking about the self-consistency of the columns on the "Investing" tab. Here is an actual example:

    Day 1: Shares=2857.213 Quote=73.35 Change=0.28 Market Value=209,576.57 Day Gain/Loss=799.95
    Day 2: Shares=3006.456 Quote=69.73 Change=-3.62 Market Value=209,640.18 Day Gain/Loss= -10343.06

    "Day Gain/Loss" is defined as "Change in market value since previous day's closing" if you hover over the column heading. The market valee of my holdings went up about $64, not down by over $10,000.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited December 2019
    @rschranz. I am going to agree with you.I find the presentation strange, inconsistent, or deceptive. The underlying issue is not related to the dividend or reinvestment. The same miscalculation develops anytime the share count changes. The calculation (IIRC) is simply today’s shares times quote difference, without consideration as to shares owned yesterday. 
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    rschranz said:
    I am just talking about the self-consistency of the columns on the "Investing" tab. Here is an actual example:

    Day 1: Shares=2857.213 Quote=73.35 Change=0.28 Market Value=209,576.57 Day Gain/Loss=799.95
    Day 2: Shares=3006.456 Quote=69.73 Change=-3.62 Market Value=209,640.18 Day Gain/Loss= -10343.06

    "Day Gain/Loss" is defined as "Change in market value since previous day's closing" if you hover over the column heading. The market valee of my holdings went up about $64, not down by over $10,000.
    The additional 149.243 shares added on Day 2 were not held on Day 1, therefore, the market value of these additional shares is not included in the calculation of the change in market value of the shares held on Day 1.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    I agree the abbreviated definition in the hover box is confusing. If you go to the Help Glossary it says
    ------------------------------

    Day Gain/Loss (Portfolio column)

    The daily change in dollar value of all currently held shares of the security.

    --------------------------------

    Note "currently held" - this means Quicken ignores any changes in the share quantity, so the Day Gain/Loss is based on the share price change and the number of shares you held on day 1.

    On day 1 you hold 2857.213 shares x 73.35 = 209576.57

    On day 2 those shares would have been worth 2857.213 x $69.73 = 199233.46

    The difference is -10,343.11. The value of your investment (if you had not purchased addional shares) has gone down. Presumably the $0.05 difference between this and the reported Day Gain/Loss is due to rounding.

    You may or may not find this number useful, but that is how it appears to be calculated.

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  • rschranz
    rschranz Member ✭✭
    @Sherlock. It is not defined that way. To me, "Change in market value since previous day's closing" means market_value2 - market_value1. The definition should be clarified to say it is not comparing the market value of all your shares, just the shares held the previous day. As such it is useless to me and I will just delete that column.
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited December 2019
    rschranz said:
    @Sherlock. It is not defined that way. To me, "Change in market value since previous day's closing" means market_value2 - market_value1. The definition should be clarified to say it is not comparing the market value of all your shares, just the shares held the previous day. As such it is useless to me and I will just delete that column.
    We all agree the description Quicken provides isn't clear.  

    In your view, there should be a Day Gain associated with the purchase of a lot on the day it is purchased equivalent to its market value.  Most of us would think that is wrong.
  • rschranz
    rschranz Member ✭✭
    @Jim_Harman. Thanks, I should have looked it up in Help. But it wouldn't have done any good since I wouldn't have understood the way "currently" is used. Anyway, I agree that is the way it appears to be calculated and I will just suck it up and wish there were a calculation I could use.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited December 2019
    We have seen that Quicken's Day Gain/Loss calculation does not include distributions, purchases, or sales - only the number of shares you held on Day 1 and the change in share price.

    As such I would argue that it is not a particularly useful metric because it is affected in this situation where there is a large distribution (reinvested or not), causing the share price to drop.

    I find the ROI (%) columns more useful as measures of short term investment performance for individual securities, because those calculations include the impact of distributions, purchases, sales, and reinvestments.
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  • rschranz
    rschranz Member ✭✭
    Thanks everybody for your input!
  • Ps56k2
    Ps56k2 SuperUser ✭✭✭✭✭
    With the delay of a day or so when transactions happen for a true mutual fund account, vs an ETF or stock, don't things settle down after the transaction is recorded and posted by the next day or so after the fact.  I can't imagine using Quicken to monitor deferred mutual fund transactions on a daily basis - like I would for stock quotes and their real time quotes and ups/downs -
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  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    @ps56k, what you say is true but the issue here is that despite what it implies when you hover over the column heading, Quicken's Day Gain/Loss calculation does not include any transactions, including distributions, purchases, sales, or reinvestments.

    When a security makes a large distribution, its share price will go down by the amount of the distribution and the Day Gain/Loss will show a loss, which I think most people would say is not a useful reflection of its performance.

    I don't think anyone is saying that this calculation should be changed - Quicken's ROI calculation does include these factors - but just that the definition should be clarified.
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    I wold say the calculation should change. At the same time I acknowledge that the change is not clear cut. The existing deficiency is when today’s shares are not the same as yesterday’s. How splits vs reinvestments vs buy/sell vs add/remove vs ?? are each handled would be the question in my book. Does a Corp Acq, MF conversion, or something else change the picture?  

    In my book, ROI (a % over a general period of time) is not a substitute for Daily Gail/loss (a dollar amount across consecutive days). 
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    @q_lurker, it appears that the Return column provides the calculation you are looking for if you set the Portfolio's  Options > Portfolio Preferences > "Show Return calculations from" date to the day before the As of date.

    The Return column will be the same as the Day Gain/Loss if there have been no transactions or if there have been straight purchases and sales.

    If there has been a cash distribution, the market value will go down but the distribution is included in the Return.

    If there has been a reinvestment, the distribution and the purchase will cancel out

    As @ps56k points out above, this daily calculation is only useful if the distribution or reinvestment is recorded in Quicken on the same day as the distribution affects the share price. I think this is the Ex-Dividend date for stocks, which may be some time before you actually receive the dividend. 

    So if Quicken were to change something, maybe the best solution would be to add Return columns for various time periods like those for ROI, for those who want to see the dollar rather than percentage impact of portfolio fluctuations.
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  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    edited December 2019
    @ps56k rightly points out that if the OP would go back and click those same 2 days, he would not be as freaked out. When all transactions for a given day have been entered, you get a good number; with the caveat regarding ex-dividend that tends to get lost in the noise of market fluctuations.

    Unless I'm missing something, it's analogous to blaming Quicken for reporting the wrong number of shares in an account that you haven't yet downloaded the Sell transaction.

    Adding- I was missing something and stand corrected.  It is screwed up as described. Sorry about that.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    @marcus1957,
    There are two potential issues here - the timing issue you mention and the fact that despite what the column hover text implies, the Day Gain/Loss calculation does not include distributions, whether they are reinvested or not. The Day Gain/Loss boils down to
    (Day 1 shares) x ((Day 2 share price) - (Day 1 share price))

    When there is a distribution, the Day 2 share price will go down thus showing a loss even if the distribution was reinvested on the same day.

    However as discussed above, Quicken's Return calculation does take distributions into account. 
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  • rschranz
    rschranz Member ✭✭
    @Jim_Harman,
    Thanks for the pointer to the Return calculation, which does tell me what I want to know. It's too bad that the "Show return calculations from" option can't be set to "previous close" or the like, instead of only to a fixed date. I'm never satisfied, I guess.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    @marcus1957,
    There are two potential issues here - the timing issue you mention and the fact that despite what the column hover text implies, the Day Gain/Loss calculation does not include distributions, whether they are reinvested or not. The Day Gain/Loss boils down to
    (Day 1 shares) x ((Day 2 share price) - (Day 1 share price))

    When there is a distribution, the Day 2 share price will go down thus showing a loss even if the distribution was reinvested on the same day.

    However as discussed above, Quicken's Return calculation does take distributions into account. 
    I am really not trying to be argumentative, but he is not looking for Return; he was looking at Day Gain/Loss described as Chg in Mkt Value from one day to the next.  IMO, the problem needs to be addressed by 1) clarifying the procedure for the calculation in the Help file glossary, and 2) improving the breadth and accuracy of the calculation.   Number 1 is required whether number 2 is implemented or not.  If number 1 presented the simple equation and warned of the misleading results when the share count changes, there would be little to argue with.  Day Gain/Loss would be a simple value useful in most but not all situations.  

    If number 2 expands the breadth of cases accurately covered, that too should be explained in the glossary.  Through that path, the extent of cases where the number might have value would be would be increased; the program value might be increased.  

    As I would further put forth that watching daily changes in the market is often not a good investment policy, I'll toss out a third option -- eliminate the two Day Gain/Loss columns ($ and %).  That would surely raise some hackles since removing something always seems to upset somebody.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    Also not trying to be argumentative, but the OP's original complaint was that the security's Day Gain/Loss column shows a loss on a day when there has been a reinvested distribution even though the market value stayed about the same.

    My point is that Quicken already has the calculation needed to include the distribution in the results and thus I think accomplish your goal 2. If he sets the starting date for returns to the previous day and looks at the Return column instead, the distribution will be included in the results.
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