Reviewing Quarterly Statements: How am I Doing?

November 13, 2020

ARCHIVED BLOG, PLEASE NOTE:  The information below was posted prior to any affiliation with LPL Financial and is posted here for historical purposes only

Have you ever asked yourself “How can I tell if I am doing well or poorly when it comes to investments within my retirement plan?” If you are like most employees at the University of Michigan (or any other employer for that matter), you are gauging the success of your retirement plan on whether this statement balance is higher than the last statement balance. But is that really the best measure? I would suggest this methodology leads to a common oversight of poor investment management.

You may have seen us pose this same question in our ads in the Michigan Record 15 years ago. We would hope this common oversight did not still exist today, but sadly it has not changed.

If you are just looking at the bottom line from statement to statement, you are not factoring in the amount of your contributions and your employer match. Let’s look at an example:

Susan works as a nurse at the University of Michigan and currently earns $90,000/year (or $7,500/month). Between Susan’s 5% contribution to her 403B Base plan ($375) and UofM’s match of 10% to the 401A plan ($750), there is an additional $1,125 being added to her retirement plan each month. Since TIAA CREF and Fidelity both generate statements quarterly, there is $3,375 being added to her retirement plan over that period. Therefore, Susan’s portfolio could have lost $3,000 in the past quarter, and it will still look like she is “making money” on paper.

Susan’s example was a clear example of how her monthly contributions can mask poor investment performance. Now, what about when the market is on an uptrend? Let’s look at another example:

Jillian is also a nurse at the University of Michigan. She has been working hard for years at UofM, and she has always felt comfortable about her future retirement because she knows UofM is saving $2 for every $1 she saves. How could she not be on track? Jillian has heard about the misperception of only looking at the bottom line, so she takes a close look at the percentage rate of return on her Fidelity statement every quarter. Looking back on a recent statement, she saw that her investments earned 8%, so she is feeling even better! How would Jillian feel if she found out most investors taking on the same level of risk as her earned 12%?

If looking at the ending balance does not show you how well you really did, and looking at your rate of return does not show you how well you really did, then at what should you be looking? The truth is that it is a combination of several things.

First, at least once per year you should be looking at your total account balance to see if it is in line with where you need to be to achieve your stated retirement goal.

Second, you should be comparing your rate of return with an appropriate benchmark. Unless you are investing 100% in large growth-oriented companies in the US, I encourage you to avoid comparing yourself to the S&P 500 or the Dow Jones Industrial Average (DJIA). If you are a Moderate investor, look for an independent benchmark that mirrors a Moderate portfolio. If you are an Aggressive investor, look for an independent benchmark that mirrors an Aggressive portfolio.

If you are looking for somewhere to start you can look at the relative risk indices developed by Dow Jones, such as the Dow Jones Moderate Portfolio Index. If you feel as though you don’t understand half the words in this post, it may be time to start talking with a qualified professional!

Here at Evangelista & Associates, we do not work for Fidelity or TIAA CREF. The only people we work for are our clients. As I always remind my clients, “Fiduciary and proprietary cannot go in the same sentence.” There is no better time to get a second opinion from an Independent Advisor than now. If you are ready to get a second opinion of your portfolio to confirm you are doing everything you can to reach your goals, please feel free to email me at

We are not affiliated, associated, authorized, endorsed by, or in any way officially connected with the University of Michigan, or any of its subsidiaries or its affiliates.