Modeling Schwab TIPS holdings in Quicken

[PaunchyPirate]

I use Quicken (amongst other things) to track my investments. My investments are primarily held at Schwab. I do NOT do automatic downloads of my investments into Quicken.

I've modeled my regular T-Bills very nicely to my satisfaction so that they show up with a daily valuation that matches Schwab's daily valuation (which I know are just an approximation of what the T-Bills would sell for on the secondary markets). I update these values once a week in Quicken and it nicely matches my online Schwab balance.

However, I recently purchased some 10-year TIPS into the same account. As with T-Bills, in my account positions display, Schwab shows a daily market price for the holding. However, when you multiply this daily market price times the number of "shares", it does not equal the total market value of the position as it does for T-Bills. See the attached screen shot. The first entry is a regular T-Bill. Total Market Value (last number in the list) = (Shares/100) * current price. Easy to see.

The second entry is the TIPS. If you do the same math as you do with the T-Bill, you should get a Total Market Value of $50,015.625 but instead Schwab shows it as $50,015.62 -- a difference of $15 (and maybe a penny, depending on how you round).

The auction was mid-January and settled yesterday, January 31. I saw a mismatch since the auction date, but it has varied. I waited until after settlement, thinking it might be due to the way TIPS handles the accrued interest between purchase and settlement into the transaction. But I don't really know what is going on.

My questions: Is there an obvious reason why there is a ~$15 difference? Is it a value that I can reliably calculate and know?

I'm not concerned one bit that something is wrong. I don't really even need to know why it's happening. I'm sure it's normal and all fine. But I'd really like to have a way to make it so that my Quicken balances match my Schwab account and monthly statements when I've manually updated the daily price of these shares.

Any thoughts or ideas on how I can best do this over time?

 

[audreyh1]

I just occasionally enter the current value from my Fidelity portfolio screen which takes the inflation index into account. This is not the daily price x number of shares. When someone buys your TIPS they have to also pay you for the accrued interest AND the inflation index.

It could be the daily computed inflation index?

 

[PaunchyPirate]

I just occasionally enter the current value from my Fidelity portfolio screen which takes the inflation index into account. This is not the daily price x number of shares. When someone buys your TIPS they have to also pay you for the accrued interest AND the inflation index.

It could be the daily computed inflation index?

I guess that's probably the easiest solution. I can take their current total value and calculate my own "share price" and just ignore theirs. I mostly just do it on Saturday mornings as part of my routine and at the end of each month to match the statements.

 

[audreyh1]

I’m glad that Fidelity computes current total value to include the inflation index so far. That’s what you would expect to receive if sold plus the accrued interest. The daily trading share price takes neither into account so to me it’s useless for daily valuation purposes. The accrued interest gets paid out every 6 months, so that resets. But the inflation index (hopefully) increases over the life of the TIPS and when it matures you get the inflation indexed amount back.

 

[OldShooter]

Yeah. It's a PITA but the only time I care about the "real' price is when I reconcile Quicken to the monthly Schwab statements. For that I manually divide the total value of the position by the number of bonds (numbers from the statement) then manually enter it in Quicken.

For years we have held only the 2s of 26, so only one calculation per month. Last week I bought another issue, though, so now I'll have 2 calculations going forward.

I have to keep watching the Quicken price though, because Quicken takes its (wrong) number from Schwab whenever it feels like it. So I have to go in and wipe out bad numbers in the Quicken price history table.

 

[PaunchyPirate]

I’m glad that Fidelity computes current total value to include the inflation index so far. That’s what you would expect to receive if sold plus the accrued interest. The daily trading share price takes neither into account so to me it’s useless for daily valuation purposes. The accrued interest gets paid out every 6 months, so that resets. But the inflation index (hopefully) increases over the life of the TIPS and when it matures you get the inflation indexed amount back.

Does Fidelity actually tell you that is how they derive the current total value? Or have you learned this by actually doing the math of the inflation index numbers?

 

[audreyh1]

Does Fidelity actually tell you that is how they derive the current total value? Or have you learned this by actually doing the math of the inflation index numbers?

Fidelity says in footnotes that the cost basis is “adjusted” and the numbers they are displaying for total cost basis and current total value have been creeping up over the years and are close to the latest index factor for the bond shown in the table available at TIPS/CPI Data — TreasuryDirect. The rest is assumptions on my part. I have not been doing the inflation index math myself.

 

[PaunchyPirate]

Fidelity says in footnotes that the cost basis is “adjusted” and the numbers they are displaying for total cost basis and current total value have been creeping up over the years and are close to the latest index factor for the bond shown in the table available at TIPS/CPI Data — TreasuryDirect. The rest is assumptions on my part. I have not been doing the inflation index math myself.

Thank you. This helps me be happy with just using the broker’s total market value number. I plan to hold til maturity, so I don’t need absolute accuracy in anything except what I get paid over time.

 

[tulak]

I cheat. I don't really care what the market price is since I plan to hold to maturity. So I never price my TIPS to market, just to par value and leave it at that.

Of course this doesn't take into account the inflation factor. That could be a bigger issue long-term, but I'm ok with leaving it out. It doesn't affect how I manage my overall portfolio.

I do see the current market values when I log in to my brokerage account. Sometimes it's more, sometimes less, but I'm happy with my approach.

 

[OldShooter]

I cheat. I don't really care what the market price is since I plan to hold to maturity. So I never price my TIPS to market, just to par value and leave it at that.

I hold to maturity as well. I mark the TIPS to market in Quicken monthly in order to verify that my Quicken balances match Schwab's statements.

 

[tulak]

I hold to maturity as well. I mark the TIPS to market in Quicken monthly in order to verify that my Quicken balances match Schwab's statements.

I hold all my TIPS in the same account, so occasionally I’ll verify everything looks right. Since I don’t mark to market, that account balance never matches Moneydance.

 

[audreyh1]

Thank you. This helps me be happy with just using the broker’s total market value number. I plan to hold til maturity, so I don’t need absolute accuracy in anything except what I get paid over time.

I agree, you don’t need absolute accuracy to track if you are holding to maturity. I just picked what looked like a reasonable number from what is available. Good enough, I also plan to hold to maturity. But I get that my TIPS are appreciating with inflation so I was very glad to see it was being tracked in the current market value. I update manually about once a month.