No. of Recommendations: 4
>> I read here that the returns from simular ETF's and Mfunds were about the same, and since most of the fund gains come from increase in price (is this right?) it would seem to me since the ETF's have a much higher price than the Mfunds that I would be able to buy much less of the ETF's and if their increases are at the same rate wouldn't I make a lot more money in the Mfunds since I would have more shares to increase ? <<

Not so. When we say both the ETF and the index funds essentially have similar returns, we mean *percentage* returns, not dollars-per-share.

If an index rises 10% and you have $1,000 invested in it, you'll have about $1,100 whether you have 10 shares at $100 (rising to $110) or 100 shares at $10 (rising to $11).

The $100 shares rise in value by $10; the $10 shares rise by $1. In both cases the share price rises 10%. With the $10 shares you'd have 10 times as many shares rising in value, but each share would rise 1/10 as much as the $100 shares...so it's a wash. Both rise 10%.

#29
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement