Reply #13: Everybody in todays market would loved to have bought a Friday's prices. [View All]

[rgbecker]

Even those traders who woke up Saturday morning and said I can't wait until the market opens Monday so I can buy those stocks. But those guys are going to have to pay Monday's prices not Friday's. Once again, the mutual fund price is set only once a day ie: the end of the trading day. It trades at that price all the next day and then is reset again at the end of the day for the next day. An individual stock on the other hand is constantly changing and is "set" only by the trade, maybe reflecting the most recent trade or maybe a little higher or maybe a little lower. With a mutual fund you are not really buying the stocks directly, you are giving the money to the managers to invest according to their plan. Most likely, on Friday, before they knew you were going to send in the $200, they had decided what they were going to buy and sell on Monday. Today they made decisions about tomorrow. Each end of the day, they add up all the assets (Stocks they own and your $200 and all the other money they got from investors on Monday and over the weekend.) They divide the total by the number of shares and post the price. That's the first time the price is determined since they got your money and so it is the number which shows up as share price for your $200.00. If Others had sold that day or over the weekend, that would be included in the days changes and they would receive that price also. They couldn't give the Friday price, as you and all those people who also sent in their money and those that took money out had to be added up at the end of the day and all the stocks had to be priced to determine that price which happened at Monday at closing.
Does this help at all. I've got T. Rowe Price funds and Scudder also. Had them for years and that's how it works. They go up and down and it doesn't mean a thing until you sell the shares. Until last September, It was generally always up wards, although several times there were losses. 1987, 1998, 2001, Like I said it doesn't matter until you need the money. My self, I need a turnaround within 10 years. Personally, I think this crash, besides being about the housing bubble is a result of the Iraq crap and $140/barrel oil. It will pass and all those guys running all those companies will dream up ways to make some money and add to my investments. Fortunately, most of them are more money hungry than me and will probably do alright.