Here at The Family Firm, we provide clients with personalized quarterly investment updates and a comprehensive annual investment report. Many clients like to get further into the weeds and review the monthly statements produced by our investment custodian, Charles Schwab. Here are some of the key sections of the statement that might be of interest.
Account Value and Asset Composition
The Change in Account Value section shows you how your account balance changed during the past month and year to date. The change comes from several factors:
-Credits: This includes items such as deposits made into the account, dividends, and interest
-Debits: These include withdrawals from the account and fees paid
-Transfer of Securities: The value of securities transferred into the Schwab account from a separate custodian, or securities transferred to another account, such as a Donor-Advised Fund
-Income Reinvested: Dividends, capital gains distributions, and interest that were used to purchase additional securities
-Change in Value of Investments: Change in account value attributed to price changes in the underlying assets.
The asset composition section shows the value of your holdings in different asset classes (such as equity (stock) funds, bond funds, and cash) for the particular account.
Gain or Loss Summary
This section shows the realized gains or losses during the statement period as well as total unrealized gains or losses. Realized gains or losses result when an investment is sold at a price greater than or less than its purchase price and can impact an investor’s taxes. Unrealized gains or losses show the current value of the investments compared to the value at purchase and do not impact income taxes until the investments are sold.
This section provides performance and balance information for the underlying holdings in the account for those who want to go beyond the aggregated account information in the previous sections.
The first part of this section shows purchases and sales in the account during the given period. It also shows reinvestments, where capital gains distributions and dividends are used to purchase additional shares of the same investment.
Other parts of this section show total dividends and interest received during the period as well as fees paid from the account.
This post discussed many of the key parts of Schwab statements, but if you would like to dig even deeper, Schwab has its own illustrated guide.