You should receive an account summary at the end of each quarter and fiscal year. You should also be able to view the information in these reports via your brokerage's website. Review your quarterly and annual account summaries to ensure that trades were executed correctly, to watch for potential fraudulent activity, and to stay knowledgeable about the composition of your investment portfolio.
Typical Disclosures
Most account summaries include specific account information, a portfolio summary, details regarding trades and interest or dividend income, and other legal and administrative disclosures. Account summaries also contain information regarding fees incurred and margin balances. You can reconcile the specific transaction and fee information with the portfolio summary that appears on the first page of the account summary.
Portfolio Summaries
Reconcile your new portfolio balance with prior balances using these activity figures. Next, detailed security listings by asset class disclose the number of units held in the account, the cost basis per unit, market value per unit, and market value per security. Use these figures to ensure adequate diversification among your investments. A column is also included for the unrealized gain or loss, the amount by which a particular holding has appreciated or depreciated. This is followed by the estimated annual income -- the estimated dividend yield or interest rate generated by the holding -- calculated by dividing dividends or income by the security's market value.
Account Detail
Immediately following the initial portfolio summaries is account activity by asset class. Compare trades listed in the account summary with trade confirmations you received throughout the quarter. Pay close attention to high numbers of trades, which increase your transaction and capital gains expenses. Brokers sometimes trade more than is necessary to generate transaction costs. Note the account's returns and compare them to returns on benchmark portfolios.
