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I've only been out of College for a few years, but I am trying to understand how my 401K works and would appreciate some insight.

I called the number for my 401K management company and to find the answer to the question:

"When is my employers matching contributed to my account and how does that work with purchasing actual shares of stock?"

Well, what I think I found out is that I don't actually own any real shares of stock. I own units (specifically 139.846877 units). Between deposits by my employer, I own a constant number of units which can be valued based on a daily computed Net Asset Value (NAV) which takes into effect management costs plus who knows what else.

So if I multiply the number of units by the NAV I get the dollar value of the stock I thought I owned.

139.846877 * 44.564847 = 6232.254676933

If I typed it all in correctly.

So I could then say I own the equivalent of

6232.25... / share price

number of shares. Which would be accurate today, but tomorrow, I might own the equivalent of more, or less shares depending on the NAV and the market price of the stock.

Does this sound insane to anyone else?

How can I track the value of my 401K. Their answer is to call them as often as I want and ask. There is no way for me to compute the NAV. They wouldn't ever tell me if the value of the stock (that I thought I owned) goes up, if that pushes the NAV up.

What exactly is my money invested in? How does it gain in value? And finaly, is this the way everyone does it?

Please excuse my ignorance.


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