Asking questions in a group setting can feel perilous. We are all afraid of asking a dumb question, so we end up not asking at all.

In my experience, the embarrassing situation we create in our minds is always worse than how it plays out in real life.

One of the topics I get a lot of questions about is reading statements.

I can tell by the way people ask for help that they feel embarrassed that they don’t understand. Most people think their statements should be easy to comprehend and then feel dumb if they don’t.

If you find your statement confusing, don’t feel embarrassed. You are not alone.

Statements are created by people in finance who assume those reading the statements are just as familiar with finance as they are.

This column isn’t long enough to address all the complexities of financial statements, but I would like to address the topic that I think is especially confusing and causes people to make poor financial decisions.

Most statements show people the gain/loss report, and people assume this is the same thing as performance.

Gain/loss report and performance report are very distinct topics and show two very different things.

A gain/loss report shows an investor what they will report as income if they choose to sell an investment.

Custodians opt to show clients the gain/loss report because that is the information they will need to report to the IRS if they decide to sell. Most people who see a gain/loss report mistakenly think they are looking at a performance report. They are not.

A gain/loss report shows the difference between the current value of the investment and the cost basis. People often think their cost basis is what they paid for the investment, but the cost basis for many investments change over time.

If I buy a mutual fund and reinvest the dividends that mutual fund pays me, my cost basis will increase. A simple example would be if I invest $100,000 in a mutual fund and reinvest the $5,000 that fund pays me I will have made 5 percent.

In this same scenario, my cost basis would now be $105,000, and my gain would be zero even though I made a profit.

This example is not universal to all mutual funds and all investments, buy it does illustrate the point that the gain/loss investors see on their statements should not be confused with the investment performance.

I recently discussed this with a person who invested $10,000 in a mutual fund, which then grew to $20,000.

This person had doubled their money, but the cost basis was now $21,000, so they believed they had lost $1,000. This confusion triggered a desire to sell an investment that had performed very well.

There are many other ways statements can be confusing. Most large custodians have resources to help people make sense of things.

If you feel like your statements are written in a foreign language speak up. Financial advisers are aware that statements can be confusing and will not judge you poorly for asking questions.

Tom and John Mills are registered investment advisers and certified financial planners. Reach them at 254-0155, Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.