Spend Some Quality Time With Your Statements

OK – everyone who is not particularly excited about looking at your most recent investment statement, stand up! Those of you planning on throwing it into the abyss known as the “Financial Statements File” – remain standing. The rest of you can sit down.

Visualize holding your statement envelope. Open the envelope and toss it into the recycle bin. (No, you are not allowed to throw the statement in the recycle bin!) Sitting in your favourite chair is probably a good place to be. As you take a deep breath and read the bottom line – EXHALE. That’s it. Hold on – you in the back – EXHALE...

Now, what did you learn? (Those of you still standing may not want to hear this so cover your ears if you like.) Your statement likely shows that the value of your account is less than on the last one. If you are like most people, you may have several feelings flowing through you.

You see, losing money on our investments is no fun – no matter how much you have invested or what stage of life you are at. You may feel that knot in your stomach whether you are 69 or 29. I suggest you write down those feelings as you read your statement and share them with your advisor the next time you speak with them. I also suggest that you write down any questions that come to mind, and share these with your advisor as well. Even things like, ‘How do I read this statement?’

Sharing your initial emotions and questions with your advisor is important. Many investors aren’t truthful about their ability to handle volatility – with themselves or their advisor – until they feel the consequences of a stock market drop. Often by then it is too late to react. When the market springs back everyone forgets the knot in their stomach and hopes that the positive returns will erase those feelings of helplessness and frustration.

For those of you still standing, have a seat. My advice is to sit down when your statement arrives and plan to take five to ten minutes to read it carefully. Set aside the time. Get a beverage- I’m thinking something non-alcoholic. Grab something to make notes on. OK, since your eye is drawn to the bottom line of the first page, go ahead look at the latest value and compare it to the last reporting period.

This is the point where the love of my life says, “We’re down. When is it going to go back up?” I proceed to describe the economic conditions that will need to occur in order for the market to recover. Her eyes glaze over. I stop myself, feeling like a talking head being interviewed by Peter Mansbridge.

“Should we change anything?” she asks, as she plops the statement on top of the file pile and sighs that tell-tale exhale that indicates she would really rather not discuss it. Ever willing to help, I reply, “Well let’s see, how about we go over the investments together? Turn the page and let’s look at each of the investments in the account. That helps us figure out which have been impacted most by the market drop.”

“That doesn’t help.” she says, “They are pretty much all down. I figured we had lost some money, given what the media kept saying, and I want to know what I should do. I feel helpless and frustrated. You’re my advisor – tell me what’s going on. We had just reached the point where the value of our investments is a little higher than before the last crash and now we’re down again.”

At that point I pull out a piece of paper. I write down words like ‘frustrated’ and ‘helpless’. And the question, ‘When will the markets get better?’ I look at her and say with a smile, “I really think you need to make an appointment with your advisor!”

By Stephen Whipp, CFP


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