Sorting Through Your Portfolio Mail
Whoever said we would become a paperless society was mistaken when it comes to the financial industry.
Though online access has evolved and many firms are moving toward e-statements, for regulatory reasons the financial industry is far from paperless. Investors can frequently be inundated and overwhelmed with what arrives in their mailboxes—much of it thrown out, unread. Investors receive statements for each account in addition to annual reports, prospectuses, proxies, and so on. I find many of my investor review meetings begin with a mail-sorting session and discussion about what to keep.
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Whether you invest through a brokerage firm or directly with a mutual fund or variable annuity company, you should be receiving statements on a quarterly basis at minimum. Mutual fund companies and variable annuity companies generally provide reporting of assets and transactions to investors on a quarterly basis. Brokerage firms tend to send out statements monthly, though many have gone to quarterly reporting if an account has had no activity. If your assets are being actively managed—in other words, you are paying a fee for someone to manage the account—you are likely to receive an additional statement on a quarterly basis. This is typically a statement that shows not only positions and activity, but also provides performance reporting for the assets and portfolio as a whole.
When reviewing your statement, whether it is of the monthly or quarterly variety, compare the latest positions with those of the previous statement. Has anything changed? Have the number of shares in any one position gone up or gone down? If so, do you understand why? Was something sold, or was there some form of distribution that was reinvested? If so, such a transaction should show up in the activity section of the report. In the event that something was bought or sold, did you receive a separate confirmation statement from the custodian of the account?
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