Brokerage Statement [CapiPedia]

This page is read only. You can view the source, but not change it. Ask your administrator if you think this is wrong.
====== Brokerage Statement ======
A Brokerage Statement is your personal financial report card, issued periodically (usually monthly or quarterly) by your `[[Brokerage Firm]]`. Think of it as a detailed summary of everything that happened inside your investment account over a specific period. This document is your primary record, meticulously listing all your transactions, the performance of your `[[Portfolio]]`, and the current value of your `[[Assets]]`. It breaks down your holdings—like `[[Stocks]]`, `[[Bonds]]`, `[[ETFs]]`, or `[[Mutual Funds]]`—showing how many shares you own and their current worth. It also details any income you've received, such as `[[Dividends]]` and `[[Interest]]`, and any costs you've incurred, like `[[Commissions]]` or account fees. For a value investor, the brokerage statement is more than just a piece of mail (or a PDF); it’s a crucial tool for verifying activity, tracking progress against your goals, and unearthing valuable data for making smarter investment decisions.
===== Why Your Brokerage Statement is a Value Investor's Best Friend =====
For the disciplined value investor, a brokerage statement isn't junk mail—it's a treasure map. While day traders might live on real-time data, a value investor uses the periodic statement to take a step back and analyze the big picture. It’s the ultimate source of truth for your investment journey, allowing you to:
  * **Play Financial Detective:** Verify that all your buy and sell orders were executed correctly and at the right price. Mistakes are rare, but they happen!
  * **Track Your True Performance:** See how your portfolio is //actually// performing, stripped of emotion and market noise. This is where you can honestly assess your decisions.
  * **Expose Hidden Costs:** Identify and quantify all the fees that can eat away at your returns over time. High `[[Brokerage Fees]]` can turn a great investment into a mediocre one.
  * **Make Informed Decisions:** The data in your statement is the foundation for future actions, whether it's rebalancing your portfolio, harvesting tax losses, or simply confirming that your investment thesis is playing out as expected.
==== Deconstructing the Statement: A Section-by-Section Guide ====
Statements can look intimidating with all their numbers and fine print, but they generally follow a standard structure. Let’s break it down.
=== Account Summary: The 30,000-Foot View ===
This is your executive summary. It typically opens the statement and gives you the most critical information at a glance:
  * **Beginning and Ending Value:** The total value of your account at the start and end of the statement period.
  * **Change in Value:** The net increase or decrease, often shown in both absolute currency and as a percentage.
  * **Deposits and Withdrawals:** A summary of all cash you've added or taken out.
This section helps you quickly gauge the overall health and direction of your investment `[[Net Worth]]`.
=== Portfolio Holdings: What You Own ===
This is the heart of your statement. It provides a detailed list of every security you own as of the statement's closing date. For each holding, you'll usually find:
  * **Quantity:** The number of shares or units you own.
  * **[[Cost Basis]]**: What you originally paid for the asset, including commissions. This is vital for calculating taxes.
  * **[[Market Value]]**: The current worth of your position (Quantity x Current Price).
  * **[[Unrealized Gain/Loss]]**: The on-paper profit or loss for each holding. It’s "unrealized" because you haven't sold the asset yet.
Value investors live in this section, reviewing it to see how the market price of their holdings compares to their calculated intrinsic value.
=== Transaction History: The "How" and "When" ===
This is your account's diary. It's a chronological log of every single activity during the period. You’ll see every buy, sell, dividend reinvestment, deposit, and withdrawal, complete with key details like the `[[Trade Date]]` (when the order was placed) and `[[Settlement Date]]` (when cash and securities officially changed hands).
=== Income and Expenses: Tracking Cash Flow ===
This section shows the cash flowing in and out of your account that isn't from your own deposits or withdrawals.
  * **Income:** Details any dividends paid by stocks or interest earned from bonds or cash balances.
  * **Expenses:** Lists all fees charged to your account, such as maintenance fees, wire transfer fees, and trading commissions. Scrutinize this area—low costs are a key advantage in long-term investing.
=== Important Notices and Tax Info: The Fine Print ===
Tucked away at the end, this section contains important disclosures from your broker. More importantly, it often includes a summary of `[[Realized Gains/Losses]]` for the year to date. A realized gain or loss occurs when you //sell// an asset, locking in the profit or loss. This information is crucial for year-end tax planning.
===== Beyond the Basics: Reading Between the Lines =====
Don't just glance at the final number and file your statement away. Use it as an active tool.
  * **Calculate Your "Fee Drag":** Add up all the fees in the expense section and divide them by your average account value for the period. Is this percentage higher than you thought? It might be time to shop for a lower-cost broker.
  * **Spot-Check Your Dividends:** If you own dividend-paying stocks, did you receive the payments you expected? Cross-reference the "Income" section with your "Holdings" section.
  * **Inform Your Tax Strategy:** Use the realized and unrealized loss data to identify opportunities for `[[Tax-Loss Harvesting]]`, a strategy where you sell losing investments to offset gains on winning ones, potentially lowering your tax bill.
===== A Word of Caution =====
Your brokerage statement is an official record. In an age of digital access, it’s easy to ignore the monthly PDF that lands in your inbox. **Don't.** Download and save every single statement. They are your definitive proof of ownership and cost basis, which will be indispensable for tax purposes, especially for investments you hold for many years. Treat each statement not as a chore, but as a scheduled opportunity to check in on your financial journey and ensure you're still on the right path.