Monthly portfolio reports that brokerage firms send you are about as easy to decipher as a cellular bill. The answer to your one most pressing question "How'm I doing?" is difficult to discern. Why aren't brokerage firms harnessing the power of email and databases to present clients with clear, daily portfolio updates?
One of the features I especially enjoy on the various online brokerage sites is being able to look up any stock and view its recent and long-term performance via a neat color graph. At the click of a mouse, I can see whether a stock has trended up or down, and thus instantly determine the market’s feeling for the company. Another click or two, and I can see all the news items about the company, and begin to correlate announcements with the trends perhaps a down earnings report corresponding with a dip in the stock.
Wouldn’t it be great if I could do the same thing with my own account see how my holdings have trended over the most recent month, quarter, year, three years? And wouldn’t it be neat to be able to get a daily or weekly email with the performance of my portfolio summarized in terms of its ups and downs, ideally with an HTML page graphic, or a link to a secure site showing the performance graphically? But alas, these are features the brokerage firms seem unable, or are unwilling, to provide.
Yeah, I know, I can use Quicken or some other such program to chart my accounts. And InfoBeat sends me a daily and weekly email summarizing how stocks and mutual funds I’ve designated have performed daily and weekly. But I’m lazy. I want to go to Charles Schwab and Fidelity and have them show me how I’m doing when I’m preparing to make a trade or just looking over my holdings. And I want them to send me a daily email telling me how my stocks and mutual funds did that day. Plus I’d like a weekly email summarizing how I did that week, how I’m doing for the year, how I’ve done the last three years actually, how I’ve done since the beginning of my relationship with them.
Instead, I sometimes get the feeling the brokerage firms would just as soon I not be able to follow the ongoing performance of my accounts too closely. Sure, Fidelity will show me a circular graph with my holdings in different colors, but no representation of ongoing performance: how my holdings are doing separately and together, their performance without new deposits added to the account, their performance after those are factored in.
Monthly portfolio reports that brokerage firms send you are about as easy to decipher as a cellular bill. The answer to your one most pressing question “How’m I doing?” is never answered. It’s as if the brokerage firms go out of their way to make the reports difficult to understand. But now, with the power of online databases and graphics, the obfuscation seems even more incomprehensible.
Why this absence of such basic information? My guess is that it’s either that the brokerage firms don’t have their databases constructed to provide this information, or else they don’t really want us to have it. Maybe brokerage firms would rather we not know too much about how we’re doing; maybe they’re scared that if we can actually see some or all of our investments trending down, we’ll be less inclined to trade. But the reality is that most people’s investments have trended up, buoyed by the longest bull market in human history, extending from 1982.
From all I can tell, both factors are at work. I went to my Schwab account and clicked on something called “Performance,” and was advised to print out three pages of material explaining that it would take “up to 30 minutes of [my] time” to “determine the unrealized gain or loss of [my] investments at a glance.” Well, that’s a start. But then came the fine print: “Investments older than last six months must be entered manually… Gather your account statements and trade confirmations for transactions more than six months old.”
Great. I have nothing to do but “gather” my account statements and enter information that Schwab already has on its computers? That must be part of what I’m paying for when I have Schwab make trades for me, the privilege of re-entering such information manually. Moreover, Schwab points out that its performance tracking “does not support stock splits, options transactions, or share dividends.” It does say that it is working on “adding these enhancements in the future,” though it isn’t clear the enhancements would include going back more than six months.
One thing is clear: The brokerages are going to have to do something about all this. Jupiter Communications predicted last fall that the online brokerage market will raise its asset pool sevenfold from $415 billion at the end of 1998 to more than $3 trillion by 2003. That kind of money talks, and it will be demanding more personal information and convenience, not less.
