At Hardbacon, we take your finances very seriously. The calculations you see in our mobile application are checked by a battery of tests to make sure they are valid.
However, the numbers may not be what you expect. There are three reasons for this so we felt it useful to explain them.
1. Real-Time Data
Until very recently, the data displayed in the app was from the previous day’s closing prices. We made that choice because we did not have access to real-time data when we launched Hardbacon. Moreover, as we believe that the secret to success on the stock market is to be patient, we did not feel that it was important to display data in real time.
Some users might have thought that our prices were wrong when compared to a real-time data source. This was not the case, but admittedly, posting closing data was an irritant.
Based on popular demand from our users, we now display stock prices in real time (with a 15 minute delay), and display the each security’s daily price change on the home screen.
The world of finance has been around for a very long time. One might think that this is a mature environment in which access to correct data is a convenience.
This is not the case.
One such example is the symbol (ticker) used to identify a stock. Some data providers use a suffix representing the exchange in which the security is traded (BBDB.TO). Others work with the main symbol (BBDb) combined with the stock exchange identifier (TSX).
In many cases, the information provided by your financial institutions contains missing data or with non-standardized labeling, which makes it difficult to identify.
In terms of how this impacts you, we are generally forced to ignore these positions in our return calculations.
We have just added a button to the Report section of the application, enabling you to view which securities were excluded from our return calculations. The second step allows you to manually correct these anomalies, so that you have all the information you need to calculate your returns with greater precision.
3. Return Calculations
In some cases, our calculations are different than those of your brokers or your own.
For example, when calculating returns, the current price of a bond was not considered. We made this choice because our users do not trade bonds.
The price of a bond tends to vary significantly depending on the interest rate, its coupons and its maturity date. Despite this, an independent investor doesn’t need to worry about it, because their bonds are mainly used to generate a stable income and will probably be brought to maturity. It is therefore the nominal value that will be cashed. From this perspective, using the bond’s present value only adds noise to the return calculation.
Another example is that we use an algorithm called “daily time-weighted” to calculate return. This is the most accurate calculation on the market. However, it is very likely that it will give a different result than your broker (which is not required to be as accurate) or even your own calculation.
If you don’t agree with certain calculations, let us know. Our goal is to be transparent and as accurate as possible. Your feedback is always useful and appreciated.