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well number of shares matter both up and down . more shares when combined with a rising share price is greater value, . when combined with a falling price your losses are increased and more shares can be a greater loss..
No, the AMOUNT OF $ INVESTED matters going up or down. $100,000 is going to increase or decrease the same amount whether that $100,000 is comprised of 100 shares or 10,000 shares. I know you know that.
Quote:
Originally Posted by golfingduo
If that were a split but you just said that last night I went to bed with x shares and this morning I woke up with x+1 shares. My value didnt go down
The value of your shares DID go down. A dividend payout is a wash just as a split is. Go read about share price adjustments on ex-dividend dates. That's why the "compounding of shares" as a benefit is a myth. It's the "compounding of money invested" that is the benefit (potentially).
Where the markets take things after a distribution over the next quarter or year is anyones guess.
But that still has nothing to do with mechanics of the distribution.
In either case whether a fund has a total return at years end of 10% and no distribution like an index fund or a 10% total return with a distribution like a managed fund might have the results are the same. as you said it is the compounding of money.
Shares are real ownership of companies and will prove valuable with time.
only if the company continues to do well (ie. meet the quarterly expectations set by the board of directors)
Quote:
Originally Posted by petch751
I wouldn't tell people you have the money. They will hit you up for some of it.
The wisest pieces of advice on this thread
Quote:
Originally Posted by mathjak107
the good news is given enough time markets have always gone up.
Definitely true for 20th century American stock market. Probably a safe bet to say will continue for the foreseeable future? Obviously,
at some point in the distant future the world economic dynamics will change sufficiently to create a different playing field. who knows when that will happen.
Quote:
Originally Posted by golfingduo
Look I dont care if you believe me or not. My 401k value went from 220k in 2009 to over 417k now.
I do not doubt you. I just caution you to realize that a 100% gain in a time frame when the market is nowhere close,
means that the fund managers are taking substantial extra risk in their investments. Don't rely on this as continuing for
very long. Those type of returns are often followed by substantial losses.
My personal opinion is that anytime I see a > 50% profit in my investment, I should withdraw half the profit and stick it in a safe investment.
Markets always take back what they give. The higher the risk, the more true this is.
Quote:
Originally Posted by golfingduo
My point here stands. If you are continually investing in the shares of a mutual fund and your portfolio is diverse and it is reinvested into shares your balance has to go up.
If a fund has a 100% return in two years, it is not a diverse portfolio.
Quote:
Originally Posted by golfingduo
We are not buying and selling stock here. We are not trying to time the market here.
But the people who are managing your fund are. That's the only way to get those type of returns.
Quote:
Boy did we get off on a tangent because people don't fully understand mutual funds.
I completely get where you're coming from. Unfortunately you are making an understandable mistake: you are confusing *your* investment into a mututal fund with the *fund managers* investment into the markets. Your "buy and hold strategy" is most definitely not
the strategy that they are using.
only if the company continues to do well (ie. meet the quarterly expectations set by the board of directors)
The wisest pieces of advice on this thread
Definitely true for 20th century American stock market. Probably a safe bet to say will continue for the foreseeable future? Obviously,
at some point in the distant future the world economic dynamics will change sufficiently to create a different playing field. who knows when that will happen.
I do not doubt you. I just caution you to realize that a 100% gain in a time frame when the market is nowhere close,
means that the fund managers are taking substantial extra risk in their investments. Don't rely on this as continuing for
very long. Those type of returns are often followed by substantial losses.
My personal opinion is that anytime I see a > 50% profit in my investment, I should withdraw half the profit and stick it in a safe investment.
Markets always take back what they give. The higher the risk, the more true this is.
If a fund has a 100% return in two years, it is not a diverse portfolio.
But the people who are managing your fund are. That's the only way to get those type of returns.
I completely get where you're coming from. Unfortunately you are making an understandable mistake: you are confusing *your* investment into a mututal fund with the *fund managers* investment into the markets. Your "buy and hold strategy" is most definitely not
the strategy that they are using.
if the fund is a market timing fund and yes there are quite a few then yep ,you are correct there is no difference then you trying to time things on your own.
it is not a buy and hold situation.
more typically though the fund managers by fund structure have to stay at least 80% in equities.
the weightings may change and sectors may change but basically you are in the market and will follow it.
you may do a few points better or worse then the index but typically you are not that far off.
I have been saying that all along . The manager has money to buy in companies he feels can add value. It is a huge pot of dough and it will rise given enough time and heat. Unless it burns to a crisp!
You don't understand the TSP at all. It is not a managed plan. All funds offered are indexes, with the exception of the G fund. There are no managers to take 'risk'.
The guy you are responding to obviously does not understand the TSP either, which is truly scary, because he is the one investing in it. There is no, I repeat, no fund in the TSP that has returned 100% in the past two years. It is pretty clear to me that he is including agency match, plus reinvestment of distributions, as part of that 'return'. He really needs to educate himself on the TSP, but at least he is participating.
I am also in the TSP, and it is a great plan, primarily because the expense ratio is absurdly low: .0275%.
Quote:
Originally Posted by 80skeys
only if the company continues to do well (ie. meet the quarterly expectations set by the board of directors)
The wisest pieces of advice on this thread
Definitely true for 20th century American stock market. Probably a safe bet to say will continue for the foreseeable future? Obviously,
at some point in the distant future the world economic dynamics will change sufficiently to create a different playing field. who knows when that will happen.
I do not doubt you. I just caution you to realize that a 100% gain in a time frame when the market is nowhere close,
means that the fund managers are taking substantial extra risk in their investments. Don't rely on this as continuing for
very long. Those type of returns are often followed by substantial losses.
My personal opinion is that anytime I see a > 50% profit in my investment, I should withdraw half the profit and stick it in a safe investment.
Markets always take back what they give. The higher the risk, the more true this is.
If a fund has a 100% return in two years, it is not a diverse portfolio.
But the people who are managing your fund are. That's the only way to get those type of returns.
I completely get where you're coming from. Unfortunately you are making an understandable mistake: you are confusing *your* investment into a mututal fund with the *fund managers* investment into the markets. Your "buy and hold strategy" is most definitely not
the strategy that they are using.
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Now I am okay?
I am glad because I dont want to be a pauper 
. I want to have fun while I am retired. 
