July 21, 2017

Errors in the stock account statement

What you see when you look at your stock trading account statement can be deceiving. On Dr. Stern's statement, one stock seems to stand out as underperforming, but is it really? That stock is Meyer Burger, which was purchased in autumn 2015.

On his current statement, Meyer Burger represents an 85% loss, dragging down the performance of his portfolio. However, a closer look shows that the sale of the Meyer Burger subscription rights has played a greater role than the shares are now worth. So, the picture is not as gloomy as it appears.

Is this an extreme case? No, it’s fairly normal. Such transactions as these are not reflected in Dr. Stern's statements. Dividends are also not included. This means that the true return on your investment is not accurately calculated on your trading statements.

After a few years, these amounts can sometimes multiply the stock price by themselves; but they are never shown on your statements!

This is not the fault of your bank or brokerage! In fact, it’s not possible for additional income sources, such as dividends and capital transactions, to be reflected in your statements because they do not know what you did with the money. Most likely, you kept the money on account, as Dr. Stern did with his Meyer Burger stock, but that is not always the case. You may also invest it someplace else. This means that the return on the equity cannot be accurately calculated. Also, these values are in cash and not in the form of stock so they cannot be attributed to the stock.

This is why it’s critical for stock-market investors to look only at the total amount of their portfolios, not only the performance of individual stocks. In most cases, the return on equity is wrong.

Dr. Stern has invested 300,000 francs in stocks, found on the Obermatt Top 10 lists and documented in this blog for the past two years. Now, we will show our total portfolio values, along with the accompanying bank statements reflecting all deposits, on our website. This way, you can always check what is going on. We wish you success.

We buy the stocks we discuss and openly publish the returns of our portfolio. That's how much we believe in our stock research. Subscribe to the top 10 stocks for 100 markets conveniently by e-mail.

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