Back to Exchange
INVESTING STRATEGY

My portfolio

Is it better to own less shares with a higher dollar amount or lots more shares with a smaller dollar amount ?

Profile Picture
Heather Foster

11 August 2022

Like
1

1 Comments

Small Profile Photo
Dave Gow - Strong Money Australia

INVESTOR

about 2 years ago

Hi Heather. The short answer is, it doesn’t matter.

Price per share seems like it matters when comparing options but it’s largely irrelevant. Here’s why…

Fund A’s shares are worth $100 each. It pays a yearly dividend of $4 – a 4% yield. Fund B’s shares are worth $1 each. It pays a yearly dividend of 4 cents – a yield of 4%.

One is not more ‘expensive’ or ‘cheaper’ than the other. In this hypothetical example, the dividends received are the same on both options: 4%. The same calculation for growth.

Don’t worry about comparing the price per share, one is just cut up into smaller slices that’s all. Just because you can buy 100 times more shares, you won’t get 100 times the return! Think about that for a minute – your returns are based on the number of dollars you’re investing and how that investment performs (which has no relation to how much each share costs).

I hope that helps.

Dave

Like
2
Reply

4000 characters left

Related posts

exchange image
Investing Strategy

What happens if, in 30 years when I have hundreds of thousands or even millions of dollars in shares, nobody wants to buy them?

Hi there! What happens if, in 30 years when I have hundreds of thousands or even millions of dollars in shares, nobody w...

exchange image
Investing Strategy

Best way to invest $10k for long-term growth?

Hey everyone! I’ve recently set aside $10k that I’d like to invest instead of letting it sit in my bank doing nothing. ...

exchange image
Investing Strategy

I've heard that most people would only invest in VDHG if they had to choose one ETF. May I ask why?

Hi everyone, I’m quite new to the platform, and so far I have only invested in VDHG. I've heard that most people would...

Home