What Is an Investment Report Statement and Why Is It Important?

In today’s tech-driven world, investment account statements play a crucial role in managing your financial health. With many investment companies now offering online access, you can view your account information and statements at your fingertips. While this shift to digital has its advantages, it also means we may overlook the importance of these statements, which used to arrive in our mailboxes regularly.

So, what exactly is an investment account statement, and why is it essential? Heath Grossman, CFP® breaks it down in the Money Wisdom Question Series.

What Is an Investment Account Statement?

An investment account statement is a summary of your investments, typically issued by financial institutions like banks or investment firms. This statement provides a snapshot of your accounts, including your 401(k), IRA, and other investment vehicles such as stocks, mutual funds, and annuities. It details your current holdings, contributions, and the performance of your investments over a specific period.

Why Is It Important?

Tracking Your Investments: One of the primary functions of an investment account statement is to keep you informed about what you own. As you near retirement or are already retired, understanding your portfolio becomes crucial. Many individuals come to us seeking clarity on their investments and the risks involved, and the statement is an invaluable tool for this purpose.

Contribution Insights: Your statement reveals how much you are contributing to your investments, such as your 401(k). It also shows any employer matching contributions, which can significantly boost your retirement savings. Keeping track of these details can help you make informed decisions about your future contributions.

Understanding Asset Composition: The statement breaks down the different types of money in your accounts—pre-tax, Roth, and after-tax contributions. This information is vital for tax planning and understanding how your investments will impact your financial future.

Identifying Fees: Investment fees can eat into your returns, so knowing what expenses are associated with your investments is key. Your statements often detail these fees, allowing you to assess whether they are reasonable or if you need to consider alternative investments with lower costs.

Performance Monitoring: Regularly reviewing your investment statements can help you stay on top of the performance of your portfolio. This enables you to make timely adjustments based on market conditions and personal financial goals.

Regularly Review Your Investment Statements

Investment account statements are more than just pieces of paper or PDFs buried in your online account. They are essential tools for anyone looking to take control of their financial future. By understanding and regularly reviewing your statements, you can gain valuable insights into your investments, ensure you’re on track for retirement, and make informed decisions about your financial strategy. Don’t overlook this important resource—make it a habit to check your investment account statements regularly and visit with your financial advisor to make sure you are on track!