Year to Date Returns--Portfolio View-- Certificates of Deposit from Brokerage firms

Gary R

Oh Boy! Last week I posted a question about Year to Date Returns not agreeing with my Brokerage statements and issue was resolved thanks to this great group.
I just noticed today that Year to Date Returns on Portfolio View in Quicken are messed up. I'm not talking about comparing to my brokerage. Example. Interest received from Citibank $400 in 2020----Return Year to Date $650. Nothing agrees with the two interest payments received on my Cd's during the year and the Return Year to Date from the Cd. This makes no sense.
Security view shows the two interest payments of $200 each ($400 total) but Return Year to Date shows $650---(Removed) is going on here??????

Boatnmaniac

Hi, @Gary R .  Are your CDs market traded CDs?  Market traded CDs are not like bank (fixed rate) CDs. 

Bank CDs maintain a consistent value for the entire term of the CD so the only return you get is the interest paid. 

Market traded CDs provide interest payments but the value of the CDs changes based upon the market demand.  So if you have market traded CDs your total return in Portfolio View will be the interest paid + the change in market value.

You can verify which type of CDs you have by going to Tools > Security List > click on the name of the CD > above the graph, select Price History from the drop-down.  You can also click on Update (top right) > Edit price history to see the daily price changes that have occurred.

• If you have a traditional bank CD, the CD price over time will remain constant. 
• If you have a market traded CD, the CD price will vary over time. 
  

My guess is your CDs are market traded, especially since you said that they were purchased from brokerage firms. If this is the case, you could indeed have $400 in interest received plus another $250 in market return for a $650 total return.

Let me know if I'm mistaken about this and they are bank CDs, instead.

Boatnmaniac

You are welcome.  Yes, this Community has a lot of people with a wide range of Quicken knowledge and skill sets.  It can be very helpful in understanding not only how it works and in issue resolution but more broadly in financial planning and management in general. 

I generally don't like to invest in bank CDs myself because the interest paid is so low (better than keeping money in a savings account but not by much) and you can't liquidate them before the maturity date without paying a penalty that can wipe out much (sometimes all) of your return and with some CDs even a bit of the principal. 

Market traded CDs pay a little better interest and if you need the cash before the maturity date you can sell them without having to pay that penalty but you will give up some interest opportunity and you still could lose some principal if the market price is too low.  And if the market traded CDs are FDIC insured (not all are) then it provides for a very safe haven for people who want/need to preserve principal and to offset much or all of the impact of inflation.

Boatnmaniac

Hi, @Gary R .  Are your CDs market traded CDs?  Market traded CDs are not like bank (fixed rate) CDs. 

Bank CDs maintain a consistent value for the entire term of the CD so the only return you get is the interest paid. 

Market traded CDs provide interest payments but the value of the CDs changes based upon the market demand.  So if you have market traded CDs your total return in Portfolio View will be the interest paid + the change in market value.

You can verify which type of CDs you have by going to Tools > Security List > click on the name of the CD > above the graph, select Price History from the drop-down.  You can also click on Update (top right) > Edit price history to see the daily price changes that have occurred.

• If you have a traditional bank CD, the CD price over time will remain constant. 
• If you have a market traded CD, the CD price will vary over time. 
  

My guess is your CDs are market traded, especially since you said that they were purchased from brokerage firms. If this is the case, you could indeed have $400 in interest received plus another $250 in market return for a $650 total return.

Let me know if I'm mistaken about this and they are bank CDs, instead.

Gary R

Your guess was absolutely correct. All my CD's are market traded. I tested a few and was able to reconcile the Year to date return. I had no idea that the price of these CD's changed daily. All I know is they are Federally insured and my principle is paid back at maturity like bank CD's.
I really appreciate your time and help in resolving this issue. I would have never been able to figure this out on my own. This community forum is just great.

Boatnmaniac

You are welcome.  Yes, this Community has a lot of people with a wide range of Quicken knowledge and skill sets.  It can be very helpful in understanding not only how it works and in issue resolution but more broadly in financial planning and management in general. 

I generally don't like to invest in bank CDs myself because the interest paid is so low (better than keeping money in a savings account but not by much) and you can't liquidate them before the maturity date without paying a penalty that can wipe out much (sometimes all) of your return and with some CDs even a bit of the principal. 

Market traded CDs pay a little better interest and if you need the cash before the maturity date you can sell them without having to pay that penalty but you will give up some interest opportunity and you still could lose some principal if the market price is too low.  And if the market traded CDs are FDIC insured (not all are) then it provides for a very safe haven for people who want/need to preserve principal and to offset much or all of the impact of inflation.

Gary R

I only wish that I had taken them out for longer than 3 years. They are paying 3% and renewals are coming up paying 1%. Gonna be taking a big cut in interest income over the next two years.

Boatnmaniac

I know.  I don't invest in CDs for myself but 1-1/2 yrs ago I set my mother-in-law (I have POA for her) up with a 5-yr ladder and starting in Feb they started maturing.  I started looking at reinvesting in 5-yr CDs to replace the ones that had matured and found the best rates pay only 1%-1.5% which is what good MMFs now pay so that's what I reinvested her money into.  Low Fed rates are great for businesses and people who need loans but they suck for investors.

Gary R

Low rates really suck for individuals, but on March 23, of this year my portfolio was down 40% and that really sucked. 1% was looking real good at that time--lol
Follow up question
For brokerage CD's, is there any way that I can stop the dowload with the current price? I just changed January 1, 2020 and 7/20/2020 to $100, but don't want to see price changes for these CD's.

Boatnmaniac

Pull up your Securities List (under Tools).  Uncheck the boxes in the Download Quotes column for the CDs for which you no longer want prices downloaded.  Then click "Done" at the lower right corner of the Securities List screen.

q_lurker

Gary R said:

Low rates really suck for individuals, but on March 23, of this year my portfolio was down 40% and that really sucked. 1% was looking real good at that time--lol
Follow up question
For brokerage CD's, is there any way that I can stop the dowload with the current price? I just changed January 1, 2020 and 7/20/2020 to $100, but don't want to see price changes for these CD's.

Boatnmaniac said:

Pull up your Securities List (under Tools).  Uncheck the boxes in the Download Quotes column for the CDs you no longer want downloaded.  Then click "Done" at the lower right corner of the Securities List screen.

I believe you would also need to edit the security details and uncheck the box about "Matched with online security" as the brokerage is likely to be supplying prices for those securities.  Unchecking that box might create other issues as the brokerage downloads interest payouts or your eventual sales.   

Gary R

Boatnmaniac---All the boxes for CD quotes were already unchecked previously but prices still downloaded daily.

q_lurker--I was actually going to try that before I posted today, but thought it may present problems just like you mentioned.
I may try it for a few CD's and see if it works.

Boatnmaniac

Interesting.  I have 4 different MMFs in my accounts and I had unchecked the Download Quotes box for each of them years ago because sometimes downloading quotes for them would cause some problems (to be honest, I can't even remember what those problems were).  Doing this resolved those problems and since MMFs always are $1/share there haven't been any holdings value issues since then.  

I never unchecked "Matched with online security box" for them. Keeping that box checked has never caused any dividend, reinvest dividend or payout issues with them.

So, I'd assumed that the same would be applicable to CDs.

I hadn't looked at the MMFs securities price histories in a long time but I did just now and was surprised to see that quotes have indeed been downloaded sporadically.  It's understandable that this would occur when I would buy or sell or reinvest dividends but for most of the price updates aren't tied to any such event.  So, maybe keeping that box checked does have something to do with quotes sometimes downloading.

Gary R

I'm going to uncheck the box for all my Cd's. (Match with on line security)
Thanks

Gary R

CRAP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!THIS REALLY SUCKS
Yesterday I unchecked all CD's in Security View (Match with online security) Are you sure you want to unmatch security----YES
I also unchecked Download quotes in Security View for all CD's.
Guess What?
This morning Quicken updated all my CD's with the current market price. Match with online secuity was checked again for all CD's.

q_lurker

Gary R said:

....
Guess What?
This morning Quicken updated all my CD's with the current market price. Match with online security was checked again for all CD's.

So I think what is happening there is that 
a) your download from the brokerage found securities in the brokerage's list that were not matched to any Quicken security.
b) the program found securities in your Quicken records that identically matched the securities reported by the brokerage.
c) the program decided those must be matches, and did so without confirmation from you.  

Had the names (and tickers?) be distinct enough, I think the program would have asked for your input or confirmation on the match.  But even at that, my recollection is still that the program requires some sort of match -- that the brokerage's security must somehow be associated to a Quicken security.  

So the only way to keep the price at face value would seem to be to delete the other prices after each download.  

Now might be the time to ask:  Why the problem with the market value prices?  If you can sell the CD on the open market today (yesterday) for 102 or 98 cents on the dollar, what is wrong with seeing that information?

Gary R

I have 24 CD's. Yesterday I set the prices back to face value for 1/1/20, and 7/20/20. Honestly, too much work and time to do it every day.
I have no intention of selling the CD's before maturity. They are earning 3-3.5%.
The market price means nothing to me. But you're right. Probably should keep them at market value since that is what the brokerage firm is using for total performance.
Thanks again.