If I were rich, could I buy stock anytime I want?

[W_HAMILTON]

I have an IRA account, and contributed $200 sometime over the weekend. I think sometime early Saturday. Unfortunately, the "buy" date won't be until Tuesday, meaning I missed out on the great day the stock market had today.

Why does that happen? I use Vanguard; is that the way it is with all companies that sell stock or what? Why does the "buy" date have to be other than the date that I made the purchase? I can understand if there is a cutoff point, but it seems a little silly for me to make a purchase one day, then not have it take effect until three days later.

[LakeSamish706]

1. Sorry, but you don't get the buy or sell until the market is actually open...

The market makers are the ones that do the buying and selling and they don't work when the markets are not open.

[W_HAMILTON]

2. Then wouldn't it make sense...

...that if I put in a purchase on Saturday, the "buy date" should be Monday?

My buy date for the purchase I put in on Saturday won't be until tomorrow.

[LakeSamish706]

3. Thats a good point... I would be talking to the broker/Trading desk on that point....n/t

[W_HAMILTON]

5. It's just their policy.

That's why I was wondering if that is something common to other companies that sell stock as well. I somehow think Warren Buffet doesn't have to wait three days to have his stocks purchased/sold. I figured the market might go up this week, simply because it hadn't been doing well lately, so I figured it would have somewhat of a rebound. It's probably just fool's luck, but it did do well, and for a reward I get to buy the stock I placed an order to purchase on Saturday at tomorrow's higher price.

[anigbrowl]

8. Warren Buffet pays fat fees, which you don't

The thing about Vanguard is that you pay very low management fees. The tradeoff is that you don't get instant fulfilment. Services like etrade etc. which offer low fees make the money back by loaning stock (for a fee) to professionals who need to hedge a short or the like.

[Nite Owl]

4. Did you put the money for stock purchase in

the IRA on Saturday or the order for the stock? Sometime the money takes time to settle, if it were for a stock and the cash was in the account then order should have been place at the open this am.

[rgbecker]

6. My Funds work the same way.

They use the closing price of the day you request the trade because with the funds, unlike individual stocks, they only price the fund once a day, just after the close of the markets ie: 4:00PM est. So the funds' price for every trade requested on Monday is actually the closing Monday evening price which is actually the Tuesday price, and thus the trade date is Tuesday. If you were trading stocks during the day, the price would vary at each minute, and so it is for each stock the fund includes. So there is bound to be some risk at the fund that they can make the trade first thing in the morning at the previous day's closing price. I'm sure they have some way to hedge this risk. Anyway, your Saturday request had to wait the Monday market and then the close and the
Tuesday trade. If this is a typical long term IRA investment or any usual Mutual fund investment (Long term) a days up or down will wash away among a hundred reversals over the years.

[W_HAMILTON]

7. True (about it all washing out)

But I'm not a millionaire, so seeing the market have a great day and me being left out still stinks.

Also, while I understand your point, I still don't understand why a purchase order placed on SATURDAY doesn't take effect until TUESDAY. The stock market is not open on the weekend, so the price is set on Saturday. I can understand your point if the order is placed during a trading day, but it was placed days before the market even opened back up.

The only thing that someone said that makes sense to me is that the bank time means that transactions must be delayed. But again, it still had two days to verify the funds were available, unless you can't do that when the banks are closed on the weekends.

It just seems like somewhat of a sham. I doubt all the people buying into today's rally actually put in stock purchases last Friday. They were buying in as it happened, something that I am unable to do myself.

That's why I'm wondering if it's just Vanguard, or it's just the system.

[rgbecker]

10. Not a sham....think about it a minute.

First of all, forget about Saturday and Sunday. So if you had called in the order on Monday and so had everyone else that wanted to trade the fund. The only price available was established Friday and posted after closing Friday. Of course they can't give you that price, what if the market crashed on Monday. As for a Saturday order, first of all they wouldn't even get your order until office hours Monday. It is added to all the other Monday orders. Does the fund trade those on Monday or early Tuesday? I don't know, but the only fair price, given that it can't be priced every second during the day like an individual stock would be Monday's close, the next fund pricing time. If you track your funds price say on Yahoo's finance page, you will see that the price will not change during the day but only after the market closes and sometimes on especially busy days the price change is not reflected until 6:00 PM.
It may be a draw back for trading in mutual funds but they aren't made for day trading but rather long term investing. If you were interested in daily ups and downs of the market you could trade directly in stocks, setting you own buy or sell price triggers. This would be done through a site like Schwab or Etrade or something...but it really makes no sense for an IRA. All advisors suggest avoiding the daily ups and downs by buying on a schedule, say $50.00 every month. When the price is down you gets more shares, and when its up you get less. On average you do better than trying to guess the daily moves.

Good luck with Vanguard. Which fund did you pick? I have a little in the 500 index fund. Its gotta go back up, I just hope it does before I need the money.

[W_HAMILTON]

11. Why not?

If the order is placed after the market closes but before it opens again, and the price is already established, why can't I buy it at that price? That seems like it would make the most sense to do it that way. Maybe I don't want to buy it at the Tuesday price. I want to buy it at the Friday price.

And I think I got VFIFX, which is like their 2050 index retirement fund. I used to put in $200 every two weeks, back when we were riding high at 14k. Then the market collapsed, and finances got tighter, so I have been only able to contribute like $600 of the $5,000 (I think) this year. It stinks, because I could be taking advantage of the long-term aspect right now, but can't since I'm not able to contribute as much. I think that's why short-term things like this get to me, because it would have been nice to be a part of the 200 point rally today, instead of me having to buy at the higher price, even though I notified my company I wanted to buy well before the market opened today.

[rgbecker]

13. Everybody in todays market would loved to have bought a Friday's prices.

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.

[RB TexLa]

14. It's impossible to price the fund through the trading day. If they hold positions in 100 to 300

stocks, bonds, short positions, etc it can't be priced.

Take a look at closed end funds, they work the same as open ended mutual funds but they trade like stocks. You buy them from other sellers instead of the mutual fund company. They also have the advantage of not having to sell assets due to heavy redemptions like an open ended fund.

[NJGeek]

9. Stock or mutual fund? What time did you make the trade?

[RB TexLa]

12. You can buy stocks or mutual fund shares anytime you want. You just have to find someone willing to

sell them to you. I have certificates for 200 shares of ExxonMobil that if you and I agreed on a price we sign the back of them and they are sold, the day or time doesn't matter. Just very few people hold their own stock certificates.

Everyone has their rules, even in the situation I described, I probably wouldn't be willing to discuss selling my shares to you if you called at three in the morning.