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Issue with Net worth and unrealized gains

CTS

I am using Quicken Classic for Windows version R69.26.

I am not very savvy when in comes to investment tracking. When I look at the value over time for my investments, it shows a period where I have over 30 million dollars. The actual is less than 500,00 dollars during this time. The transaction register shows the correct information, but when I look at a report that includes unrealized gains, I see amounts that include $10,000,000 in gains. Never happened and I have no clue how to correct. During this period, I had bought CDS that downloaded as bonds, and I did not know how to correct them. The unrealized gains were for these CDs that have since matured, which I am assuming is the reason my net worth went back to correct.

What is the procedure for fixing something like this?

[Edited - Readability]

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Sceptic

@CTS check the price history of your securities by clicking on the security name and clicking on "More" in the upper right of the Security Detail Window. Select "Edit price history" from the drop down list. Scroll through the price history and verify and correct any prices that are too large or look "wrong".

q_lurker

@CTS I can't tell exactly how your Value over time card is displayed or customized, but generally I find that including Unrealized Gains as an advanced customization is not appropriate. If possible, I suggest you remove that from the customization and see if that yields more reasonable results.

CTS

These are the standard views when clicking on the investing ribbon. I do not see any customization to exclude unrealized gains, or even to modify what graphs are shown.

CTS

Thanks, this let me see that the decimal in the price would continually be off by two decimal points then periodically be correct, then go back to being off. I was actually able to uncheck the download quotes button, and this let me change it from Bond to CD where I was not able to do that if I was downloading quotes. Once I changed it to CDs, all the issues went away.

Sceptic

I'm glad that fixing the prices solved the problem. The securites you have look like mutual funds. So I think the better security type to use would be "Mutual Fund".

Boatnmaniac

Isn't unrealized gains simply the difference between the cost basis and the current market value?

The current market value of assets is, by definition, what is to be included in net worth. Why do you feel the unrealized gains should be excluded?

(Edited to make a correction…in italics…in the 1st sentence.)

Jim_Harman

Isn't unrealized gains simply the current market value?

Unrealized gains plus Cost Basis add up to the current market value.

Sceptic

If you exclude realized gains from a report or graph, you will get a cash (flow) report, or a graph showing change in cost value.

Boatnmaniac

Brokered CDs are a type of Bond which is why investment companies download the securities as such. Bonds are essentially loans made to government entities and other commercial entities. Bonds issued by government and non-financial institution businesses are called "bonds". Bonds issued by financial institutions are called "brokered CDs". In many ways they both work the same way in the open market and it is my understanding that brokered CDs will likely continue to be downloaded as Bonds because that is what they are. I'm not sure why changing the security type in Quicken from Bond to CD fixed the issue for you because because to my understanding the "CD" security type is more of a Quicken change made per request by Quicken users, not from the financial institutions so it has little effect on reality other than on how they will show up in reports. But I'm glad it seems to have worked for you.

Traditionally when we bought CDs on Fidelity's website we would buy whole CDs @ $1000 each. Not all that long ago Fidelity began to offer fractional shares of CDs that can be bought. So, now when we buy 1 CD @ $1000 ea. on Fidelity's website it is downloaded into Quicken as 10 shares of that CD at $100 ea.

This change to what is downloaded for CD purchases was made by Fidelity when they migrated from the DC connection method to the EWC+ connection method last fall-winter. But initially it was not done correctly. The downloads either included 100 shares/CD (should have been 10 shares/CD) or the price remained at $1,000/CD instead of being changed to $100/share. This greatly inflated the value of the purchase from, for example, $30,000 for 30 CDs @ $1,000 ea. to $300,000 for 3,000 shares @ $1,000 ea.

Fidelity has fixed this download issue but for CDs that were previously downloaded incorrectly we need to manually adjust the purchase info so the shares quantity = 10X the CD purchased quantity and make sure the share price = $100 (instead of the CD price of $1).

Boatnmaniac

https://community.quicken.com/discussion/comment/20575249#Comment_20575249

Agreed. I worded that in my post incorrectly (I hadn't yet had my 1st cup of coffee 🙄) and will correct that.

But my question remains for @q_lurker about why they feel that unrealized gains should not be included in the net worth calculation.

CTS

Thank you. The issue you describes is similar to what happened to me and maybe i fixed it the wrong way. The share price in realized gains was showing as fluctuating from 1 dollar a share to 100 dollars a share. Since this was downloaded daily across multiple CDS for a long period of time, I had several hundreds of transactions.

I definitely get confused on the whole CD issue and how unrealized gains fluctuate daily on something I bought that just matures on a certain date.

Sceptic

@Boatnmaniac you are right brokered CDs function as a type of bond, but the confusing thing is that they are not priced like bonds on Quicken. That's where people get tripped up.

@CTS if your security is truly a brokered CD, then it should be priced at 100.00 when purchased new. The price will fluctuate during the life of the CD but always return to a price of 100.00 if it is held to maturity.

On Quicken if you purchase a 100,000 brokered CD, the units should be 1000 and the price should be 100.00.

But again, the securities in the screen shot you provided don't look like brokered CDs. That's what makes your situtation confusing.

q_lurker

@Boatnmaniac

But my question remains for @q_lurker about why they feel that unrealized gains should not be included in the net worth calculation.

I was not originally on the same page as the OP. I did not know exactly where he was coming from. Thus my comment was intended as somewhat generic and not pointed at net worth.

To be more specific about my concern, it is not relevant to the OP's circumstance, as it turn out. Some 'Advanced' tabs for customizing investment reports include a box to include unrealized gains. (sample from an Investment Transactions Report:)

I have seen those reports then get very convoluted reporting every day's unrealized gain/loss get reported as a transaction. Whether to include or exclude such unrealized gains is a case-by-case, report-specific decision that Quicken almost always defaults to correctly.

CTS

My bad on describing the screen shot. The screenshot was on my overall portfolio which now includes securities. I was just trying to capture the net worth graph that showed the overall going up to 30 million during the past periods where I held the CDs which have since matured. Once they matured, my net worth went to reality.

When I bought the CDS they downloaded at 1$, then later started showing in unrealized gains at $100, with some periods dropping back to $1, then going back to $100, then selling at 1$ when maturity hit.

Any issue with just deleting the price history between the buying and selling so none of the unrealized gains show for the CDs?

Boatnmaniac

https://community.quicken.com/discussion/comment/20575326#Comment_20575326

Thanks for the clarification. I was hoping that your response would be similar to what you posted.

I do agree that selecting optionally selecting unrealized gains from the Advance Tab is often not the best thing to do. And that Quicken defaulting to include it in other reports is almost always correct.

Sceptic

@CTS don't delete the price history, take those $1 prices and multiply them by by 100.00. If you delete the prices, you will never be able to get them back. They aren't on the regular daily price feed. They come from the update file from Fidelity.

Also, for brokered CDs you will always have a daily MV update. So the prices will not always be 100.00 Here is an example of a typical price history for a brokered CD -

If you aren't getting a daily price from Fidelity so your price remains at 100.00, then you can just delete the incorrect $1.00 prices.

Boatnmaniac

I agree with @Sceptic, do not delete the downloaded prices. Those downloaded prices represent the daily market price which you would get if you sell your CDs on the market prior to the maturity date. So they represent the true market price which should be factored into your net worth.

It's just like when you buy a stock or a mutual fund. The daily market prices go up and down based upon market demand.

It's important to note that brokered CDs are actual securities and they are different from bank CDs. Bank CDs are not securities and are instead a type of savings account. They can't be sold on the open market before maturity so the daily value always remains what you paid for them…unless you request the bank to redeem the CD which will almost always result in some sort of penalty.