From The New York Times:

EVERYBODY'S BUSINESS
Read Your Statements. Dump Your Losers. Take a Swim.
By BEN STEIN

Published: March 27, 2005

LAZINESS is a curse. It is as bad as a disability. In fact, it is a disability. I tell this to my son constantly, but I have to also say it to myself.

Like too many other people, I am often lazy when it comes to my investing - even though I think about investing a great deal and have great hopes for someday living off my capital and swimming lazily back and forth in my pool in Rancho Mirage. But laziness works against me, as it does against all lazy investors.

This thought is not as trivial as it may seem, and it comes at me for a variety of reasons.

First, all of us who have stock brokerage statements get sick of reading them. They arrive in thick envelopes and have page after page of little numbers that are often hard to figure out. I especially find the "monthly activity" portions difficult to reconcile. But I just got an example of why it is so important to check those statements with a fine-tooth comb. Actually, it's just the latest of many examples.

Recently, I sold a bit of stock to raise some of the down payment on a house. (Yes, I know I am buying at a high point in the real-estate cycle. I just fell in love with the house.) The checks that the broker was to send to me did not arrive at my house on time, so I called and asked for new ones. My broker said he would stop payment on the first batch and send me new checks immediately, by messenger.

They arrived the next day, as advertised.

So far, so good. But when I saw my statements I just about went into shock. I was about $100,000 lower than I thought I would be. That is because my brokerage firm had debited my account for both sets of checks - including the set I had not received.

I called my broker in a state of high dudgeon. He assured me that all had long since been repaired, but please note: It had been more than two weeks, and I had not a scrap of paper showing a correction. Now, I hope, it's been corrected. He is a great guy, and I believe him.

What if I had not studied my statements? Maybe the mistakes would have been corrected, maybe not. There have been problems in the past, at this broker and many others. I have had clear sell orders that did not go in. I have had clear buy orders that never happened. I have had debits from the wrong account and forged checks drawn on accounts. And I deal only with great brokerage firms that I love a lot.

A simple but time-consuming moral: Don't be lazy. Read your statements.

A second lesson about laziness is even more important. I have been on a very small tour promoting a new book about income investing that I wrote with my financial adviser pal, Phil DeMuth. (He did 99 percent of the work.) I tell people, "Hey, dudes, in today's low-interest-rate world, you have got to squeeze more income out of your savings or your inheritance or your divorce settlement, and we have some ways to do it with real estate investment trusts, utilities, emerging-market bonds and high-dividend stocks, common and preferred." I always add that things are a bit scary out there: falling dollar, huge deficits, Social Security problems, the looming Medicare catastrophe, intense foreign competition. Maybe we cannot count on immense capital gains the way we used to.

Maybe we should "lock in" some gains by having stocks and REIT's and other securities that pay 5 or 6 or 7 percent a year in dividends and coupons, even if there is some fluctuation in the value of the securities.

No one ever says it's a terrible idea. What people say is, "Hey, it's too much trouble to find new investments and rejigger my portfolio."

Well, that's just laziness. Robert D. Arnott, editor of the Financial Analysts Journal, puts it well. If people would spend as much time looking for higher-income securities as they do shopping for a car, they could raise their return, in terms of income, by two percentage points a year. In today's world, that could mean more than doubling your annual return - and Phil and I think you can do even better.

A third example of laziness is not dumping the losers. I recall that when I was a young sprig, I read about the Dow Theory of investing or maybe a commentary about it. The simple rules included the admonition to cut losses and let your gains run. I used to do that scrupulously, but as old age and superstition have overtaken me I often leave losers and carcasses on my statements.

Maybe part of the reason is the few minutes of work it would take to learn the cost basis and then the shattering realization of how huge my capital losses were. (Yes, I was suckered into buying Internet stocks, too. Luckily, in fairly small numbers, or I would be writing this from a padded cell.) When a stock has been a loser for a long time, say sayonara, in the words of Marlon Brando, even if it takes a bit of work to do it.

THE fourth example, and this really is a killer: not keeping up with new investment products. I am blessed to have a fine financial adviser or two or three who keep me posted on new investment products, and I have done fairly well with them.

A man I barely knew from an account I hardly ever change from decade to decade called me a few years ago to tell me about the Cohen & Steers Quality Income Realty fund, a REIT that uses leverage. Who knows what the future holds, but it yields about 8 percent, and it has gone up by about 50 percent since I bought it - and I rarely hit it so right. It's down lately by a significant amount, but its yield is still fantastic and it adds diversification, so I'll keep it longer.

Just two weeks ago, Phil brought me a nice little jewel: the Pimco Commodity Real Return Strategy fund, which fights inflation by giving you a nice combination of Treasury inflation-protected securities, or TIPS, and options on commodities. I am hoping for great things from it. The point is that I ask my financial folks to give me heads-ups, and if they make sense, great. If they don't, I ask for the next one. I love diversification and hope it helps me with those midnight swims with my dogs looking at me from the side of the pool. New products can add to my diversification, and you should ask your broker to keep you posted.

It's your money. It's your life. Don't be lazy around it, or you have no one to blame but yourself.