I have observed some weird behaviors for a deposit account performance with interest. I created a new file to represent a minimal reproducible example.
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Case 1: Interest on initial deposit without security
This time, I left $1 balance, and the performance chart shows 1000% gain. It seems it’s thinking the $10 interest gain was from the $1.
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Is this the expected behavior? I have a several deposit accounts (bank/brokerage) that earns small interest before I buy any securities. I labeled those deposit accounts as “Cash” in the taxonomies (with other cash-equivalent investments) and want to track their performance. But these behavior I showed above makes it inaccurate.
This is what happens:
I deposit money to the deposit account.
The money sits in the deposit account a few days before I buy a security, and it earns the interest.
I buy a security, and a few cents are left over.
My brokerage pays the accrued interest at the end of the month, which is after I bought the security.
PP thinks that interest was an extremely high performance gain.
Yes, while not ideal, it is to be expected. To change the behaviour, you would need to book the interest as it accrues daily on a “shadow account” instead of once when it is actually paid.
You know those jokes where the doctor says “Then don’t do it!”? Just refrain from evaluating those mostly-empty accounts individually; alternatively, leave more money on them so that the unavoidable error isn’t amplified like in your examples.
“Shadow account” as in create another fake account and log my interests in that account instead? That would double count the balance in those accounts if I were to have the accurate performance (case 1 in my OP). Also, booking the interest for all those accounts daily isn’t very trivial/intuitive as banks pay your interests at the end of a month.
I was expecting PP to collect the daily balance between each interest payment, and calculate the gain/performance/rate of the interest based on that information.
I do not evaluate those accounts individually; I was showing those individual accounts to make a better representation of the behavior. I want to evaluate the performance of my cash and cash-equivalent investments altogether. Those accounts are not always “mostly-empty”, but holds meaningful amount of cash in meaningful duration of time often enough.
This also affects the performance of the “Entire portfolio” data series, which is the default data series of many pages in PP, even if I don’t track those cash accounts separately since those deposit accounts are part of my entire portfolio.
I don’t think the users are supposed to change their cash/investment management just to make it better in a portfolio management program, especially having a few remaining cents after a security purchase, and later receiving an interest payment in the same account would be a common occurrence.
Also, you mentioned this is the expected behavior, but here you are saying this is an unavoidable “error”. I see you are a “Regular”, so I assume you have a better understanding of this product, but I don’t know if you are also a code contributor. Do you know if this behavior is the intended behavior (as a developer), or are you saying this is the “expected” behavior since this is what you have been observing in the past? Or are you saying this is a bug in PP?
