Fort Myers Florida Weekly

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Quarterly work for investors

If you choose to invest in individual companies (as opposed to, say, investing in a simple, low-fee, broad-market index fund), you can’t just “set it and forget it.” If you’re aiming for the best performance results, you’ll need to keep up with your holdings — ideally, at least quarterly.

Most publicly traded American businesses issue a detailed “10-K” report every year. At the end of three other quarters, they issue shorter (but still informative) “10-Q” reports. Both 10-K and 10-Q reports will typically feature a set of financial statements: a balance sheet, income statement and statement of cash flow. A close look at these will reveal profit margins, cash position, debt loads, inventory levels and more. Together, these tell you how well each company is (or isn’t) growing.

Along with the release of each quarterly report, many companies’ managers hold conference calls with Wall Street analysts. You’ll usually be able to access these via company websites, and an online search might even turn up transcripts of these calls. You can also find fellow investors discussing companies of interest on online discussion boards.

The release of a company’s quarterly report is a good time to check up on it. At a minimum, read the report and do a search for any news related to the company to see what it’s up to. (You’ll find articles on many companies at and elsewhere.) Ask yourself: Is the company doing well or poorly? What are its challenges and opportunities? Is it going in any new directions? Are there any red flags or troubling trends in the financial statements? Do I still believe in the company’s future, and should I hold on? Is it still one of my best investment ideas?

If the financial statements have you flummoxed, learn how to make sense of them. Try “Reading Financial Reports for Dummies” by Lita Epstein (For Dummies, $25) or “Financial Statements: A Step-by- Step Guide to Understanding and Creating Financial Reports” by Thomas R. Ittelson (Career Press, $18).

Keeping up with your holdings can help you avoid unpleasant surprises. ¦

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