Question: How do I read my Statement?

Posted Thursday, October 22nd, 2009. Filed Under Financial Empowerment

Maritza shares a question asked of her by her neighbour:

First, we want to thank our readers for their wonderful feedback and questions.
A few weeks ago I met one of my neighbors. She is a single mom who has managed to pay for her son’s college years as well as make great Realestate investments. She confessed to me that although she had invested well over $100,000.00 into her 401k plan (like the RRSP), she did not quite understand her statement.
She asked me very good questions and we want to share them with you for we realize that many of us share the same questions.

She wanted to know what a few terms of her statement mean.
Q. What does it mean when it states “This Period” and “This Year”?
A. “This Period” is the time frame of the statement. For instance, if you receive a quarterly statement, this is every 3 months. If the time period falls between January 1st – March 31st of that year, this is called the first quarter. There are 4 quarters in a year.
“This Year” is usually the year that you are working in so for this year it is 2009. If it is a rolling year, that will include the last 12 months, for instance Oct. 2008- Oct. 2009. Look and see on your statement which 12 month period your statement is referring to. If you are unclear than ask your advisor.

Q. What is “Opening Value”?
A.the Opening Value is the market price for that mutual fund or stock or whatever beginning on the last day of your previous statement. If your year is from Jan – Dec of that year than the Opening Value is Dec. 31st of the previous year. Let’s say you receive a statement for your first quarter, January 1st – March 31st, 2009 than the market price Opening Value is for Dec. 31st, 2008.

Q. What is “End of Period”?
A. The End of Period is the market price for the last day of that period, as per the example above, March 31st, 2009.

Q. What did I earn?
A. The portion earned for that period, is the difference between the market price, Opening Value and the End of Period.

OV = $500
EoP = $550
Difference = $50 earned during this time.

From Sandra:
** Please note that the market values can fluctuate as we have seen and the $ earned is only on paper and unless cashed out or “realized” is just that “on paper”.

That is good for money is not meant to sit idle – it is meant to flow. There is an energy around money. I tell my advisor with my stocks and other investments to see where I am at (can be up 10% or maybe he wants a loss) and at a certain point I want him to sell and then reinvest.

You need to trust your advisor and it is your responsibility to know at what price you buy things at so when things are sold or cashed out you can see where you have gains or losses.

Continue asking good questions and FOLLOW YOUR GUT. If you are not satisfied with your answers consider switching advisors. This is your money and you are in control!

All our love,

Sandra & Maritza


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