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Managemend Fund Investment dropped on first day

Discussion in 'Managed Funds & Index Funds' started by archangelsupreme, 10th Sep, 2007.

  1. archangelsupreme

    archangelsupreme Well-Known Member

    Joined:
    7th Sep, 2007
    Posts:
    206
    Location:
    Australia
    LOL.

    I just applied for Macquarie Small Companies Growth Trust, and in the first day...my investment dropped about $50 from my initial investment.

    This is the part i don't get......the Opening Balance unit price is at $3.2403, however, the investment application was bought at $3.2560 (i.e. the rate at which my initial investment, is divided)....however, the closing price was $3.2366...reducing my initial balance by about $50.

    Sorry I'm a first time investor and still finding my way.

    Is the drop in the closing price normal, i.e. the close price is always lower than the opening price?....or is this referring to the rate at which If I sold my investments today, I would sell it for $3.2366 as oppose to $3.2560.

    Thanks.
     
  2. crc_error

    crc_error The Rule of 72

    Joined:
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    1,367
    Location:
    Melbourne, VIC
    There is a buy and sell spread on most managed funds.. ie you buy at higher price, and sell at lower price. This spread covers transation costs associated with the transaction.
     
  3. Compleks

    Compleks Well-Known Member

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    Melbourne
    My first investment dropped $500 in less than a week.

    It made a nice recovery though.
     
  4. Simon

    Simon Well-Known Member

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    Location:
    Newcastle
    Give it time mate and try to resist the temptation to check your prices every day. Is a long term investment with upfront costs - if you invested in shares or property you would need to allow money for buying costs, same thing here.

    Check it again in a month, if you can :rolleyes:
     
  5. Glebe

    Glebe Well-Known Member

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    Congratulations on getting into the game. Don't sweat the price movements...
     
  6. Rod_WA

    Rod_WA Well-Known Member

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    Location:
    Inglewood, WA
    Sometimes I just put my fingers in my ears and sing out loud, "La La La".
    (A frightening image I know, but it works for me).

    You shouldn't really be concerning yourself with daily, weekly or even monthly gyrations. Markets do strange things, and there is a better than even chance that the current market troubles will last until the end of the year.

    But I reckon it's always smarter to be invested, rather than worried.

    But if you are worried, re-visit again why you invested in the fund: your goals, your timeframe, quality of fund manager, and so on. Have your circumstances changed? If (1) they haven't; (2) nothing has materially changed in the investment you're in, and (3) it's a good quality investment - then it's best to just enjoy the ride.
     
  7. Meggsy

    Meggsy Well-Known Member

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    15th Feb, 2007
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    Location:
    Brisbane, QLD
    Imagine if you had of invested a few weeks back with the subprime issues in the US. Your investment would have dropped quite a bit more than $50 :)
     
  8. archangelsupreme

    archangelsupreme Well-Known Member

    Joined:
    7th Sep, 2007
    Posts:
    206
    Location:
    Australia
    Thanks for the tips everyone.

    I knew that this was a risky fund and was prepared for fluctuations. I'm in this fund for the long haul and will resist checking it often.

    I've setup a regular savings plan wiht them so am contributing an extra $500 into it each month....hope it all works well in the long haul.