If you’re investing for your future, give yourself a pat on the back. Whether you’re investing in a 401(k), ETFs , mutual funds or other investment vehicles, you’re already ahead of the curve. It’s great to start investing as it beats the cost of inflation and can help you build wealth for your future. The problem most newbie investors face is how to make sense of all the information they get from the brokerage firm. Brokerage firms are required to provide monthly or quarterly brokerage statements. It can look like another language if you’re not sure how to read it. If you have a brokerage account, here’s how to understand your brokerage statements.
First, it’s important to note that all brokerage account statements will not be the same. You might work with a specific brokerage firm for your 401(k) or you might work with a brokerage firm like Fidelity or Vanguard.
So, you want to make sure you know what brokerage firm you’re working with and also know if you’re getting your statements via mail or electronically through your account. You can typically find that info in your account settings. Though each brokerage account statement may be different, they typically contain some of the same information.
Some of the wording might be different, but here are some common things you’ll find in your brokerage account statements and what it means.
On your brokerage account statement, you will find a statement period. Your statements might be sent monthly or quarterly. So the statement you’re getting is based on your financial picture within that specific period of time. For example, you might have a statement period for the month of April and your statement reflects all of the activity and current balances from that time period.
Here’s an example of what it might look like:
You’ll want to check out the statement period to see how you’re doing month-to-month or quarter-to-quarter.
In your brokerage account statement, you will see a statement overview or a statement summary. This section gives you a snapshot glance of where your current investments are at.
It can show you the value of your account within your statement period. So for example, by April 30th, you have $25,000 invested. In this overview, you’ll get a breakdown of your asset mix. In other words, how your money is divided up between stocks, bonds, etc. Don’t like the mix? Change it up to fit your needs.
On your statement, you will find a phone number that you can call should you have any questions about your account. If you’re confused or there is an error, give them a call!
You’re investing your money with them, so they’re making money from you as well. Don’t be shy. If you want clarification on something, go old school and pick up the phone. They won’t bite! Knowledge is power and remember you are the boss of your money and deserve information and clarification.
You should also see your account number on your brokerage statement. If you ever need to call about an error or anything regarding your account, this number can come in handy.
Your statement will also include an account overview or an account summary. This will be a comprehensive overview of everything that is in your account, such as ETFs. It will also include the quantity and the cost as well as the balance from your last statement and your balance now.
This is where you can see the performance of your investments. When you invest, what happens in your portfolio can change based on the market.
Your account overview is where you’ll want to get into the nitty-gritty of what you’re actually investing in, the cost and your performance. Confused or don’t like what you see? Give your brokerage a ring!
As part of your account summary, you’ll likely see an income summary as well. This is where you can see any dividends, interest, or capital gains. This will give you a more specific idea of what’s going on with your investments.
Under your completed transactions or account activity section you’ll find what’s been going on in your account during the statement period.
You’ll see what has been coming in and what has been going out, as well as any trades. Here you can make sure all of the transactions look correct. It’s a good idea to do a financial check in every month and your investments should be included in that!
As part of your account activity, you should see a part where any commission and fees are disclosed. This is where you can see how much you’re paying in fees and what your investments are really costing you.
You’ll want to see just how much you’re paying and if the fees are too high, you might consider another brokerage. Remember, if there’s something you don’t understand, call up your brokerage. They’re there to serve you!
As part of your brokerage account statement, you’ll also see disclosures listed at the end. You can consider this “the fine print” in your statement and it wouldn’t hurt to look it over. This is where your brokerage will list any legal disclosures, procedures, etc.
Now that you have an idea of how to read the statement, you want to make sure you’re getting the most out of them. First, you want to verify all the information is correct. Your name, personal info, etc.
You can check your transactions and compare to any confirmations you’ve gotten about trades. Essentially, you want to feel like you know what’s going on and everything looks familiar and correct. If it’s not, call your brokerage immediately.
Keeping tabs on your investments can help you stay invested in the wealth building process. Don’t get too attached to the numbers as they can fluctuate and you want to play the long game. But having knowledge with your numbers can help you stay focused on the bigger picture.
Want to learn even more about your brokerage statement? Watch our webinar Understanding Your Brokerage Statement here.
Our Certified Financial Trainers can help you read your statements. Schedule a free 20-minute consult call with a member of our Team to be paired with a Trainer and begin your financially fit journey.
