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Investor Alert

Bearing Up in a Bear Market: You Still Need to Open Your Account Statements

Especially in a down market, investors may be tempted to try and avoid the trauma of seeing the reduced value of their holdings by not opening their statements for their brokerage, mutual fund, or 401(k) or other retirement plan accounts. It has even been suggested that avoiding looking at your statements may be a good way to respond to turbulent financial times, because it prevents you from selling out at the market bottom and foregoing the expected—but unpredictable—turn around in the markets.

Don't Check Out on Checking Up

This advice may be comforting—and may even help keep you focused on the long-term performance of your investments—but ignoring your statements can blind you to problems in your accounts other than their performance. No one can protect your accounts like you can, and so you need to open your statements and see what is going on in your account.

Looking for Trouble

Here's a checklist to help you identify potential problems you may need to respond to promptly:

  • Verify the activity in your account:
    • Are there any trades or cash transfers that you didn't authorize?
    • Are the trades reported consistent with your confirmations?
    • Are any cash withdrawals or additions not accurate?
    • Are the size and price of all purchases and sales correct?
    • Are all anticipated dividend and interest payments reflected?
  • Review your account holdings:
    • Are all securities and cash positions and any debits or credits accurately reflected?
    • Does your portfolio agree with your diversification and asset allocation objectives?
  • Confirm basic account information:
    • Are any address changes accurate?
    • Are there any charges or fees that you don't understand?
    • Are any important changes in your relationship with the firm or your broker reported?
    • Are there any notices that require a response?

Don't Snooze and Lose

Some of these problems, such as incorrect electronic fund transfers, must be identified to your stockbroker or banker within 60 days after they occur or you waive your right to a correction. Still others may result in actions by your firm you don't want and—if you don't act promptly—take time, effort, and cost to undo. Immediately question any transaction or entry that you do not understand or did not authorize. Don't be timid or ashamed to complain. Here are the steps you should take:

  • If you think it's a minor mistake, talk to your broker. This may be the fastest way to resolve the problem.
  • If you can't resolve the problem with your broker, or you think your broker engaged in unauthorized transactions or other serious misconduct, report it to the firm's management or compliance department in writing.
  • If you and your firm still can't resolve the problem, contact us. You can file a complaint using our online complaint form. If you are seeking to recover money, you may want to consider arbitration or mediation.

Bottom Line

Always check to see if there are problems in your statement that you can—and need—to correct. While it may feel better to avoid seeing the losses in your portfolio from the bear market, you can be opening yourself to problems if you don't open your statements.

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