How do I analyze brokerage statements?

To analyze a brokerage statement, carefully check your trade summary, holdings, gains/losses, and charges. This helps you track your investments, spot errors, and make smarter decisions. Regularly reviewing your brokerage statements ensures transparency and improves your financial planning.

What is a brokerage statement?

A brokerage statement is a detailed report provided by your broker that summarizes all your account activities for a specific time period. It includes information such as trades made, securities held, account value, dividends received, and any fees or charges incurred. It's important to review this regularly to ensure accuracy and understand your investment progress.

What key sections should I check in a brokerage statement?

The most important sections to check include your portfolio summary, transaction details, realized/unrealized gains, cash balance, and charges like brokerage fees or taxes. These areas give you a clear picture of your current investments, profitability, and costs involved in trading.

How to verify transactions and fees?

Match your executed trades with the transaction summary in the statement. Check if all buy/sell orders, dividends, and interest amounts are listed correctly. Also, review brokerage fees, taxes, and other charges to ensure they are calculated properly. If something seems off, contact your broker immediately.

Why is it important to check unrealized and realized gains?

Realized gains show profits/losses from trades you've already exited, while unrealized gains reflect the current value of your open positions. Understanding both helps you plan your taxes and evaluate your portfolio’s current performance. It’s also useful for making future trading or investment decisions.

How often should I review my brokerage statement?

You should review your brokerage statement every month or after major trades. Regular reviews help you catch errors early, track your performance, and stay informed about account charges and changes in holdings. Consistent analysis builds financial discipline and helps with tax preparation as well.

Can brokerage statements help in tax planning?

Yes, brokerage statements are valuable for tax filing and planning. They show your capital gains, dividends received, and transaction dates—essential details for calculating tax liability. Keeping these records organized helps during tax season and ensures you don’t miss reporting any taxable income.