Author Topic: On a bad markey day, do you buy a fund the day of or after?  (Read 1861 times)

abbythebear

  • 5 O'Clock Shadow
  • *
  • Posts: 8
On a bad markey day, do you buy a fund the day of or after?
« on: April 07, 2016, 01:01:11 PM »
I think you buy after the close right?  Because the fund does not reflect the drop until after closing bell?

solon

  • Handlebar Stache
  • *****
  • Posts: 1455
  • Age: 1818
  • Location: CO
Re: On a bad markey day, do you buy a fund the day of or after?
« Reply #1 on: April 07, 2016, 01:06:48 PM »
Yes, Net Asset Value is computed at the end of the day, after closing.

http://www.investopedia.com/terms/n/nav.asp

PhysicianOnFIRE

  • Bristles
  • ***
  • Posts: 452
  • Location: Up North
    • Physician On FIRE
Re: On a bad markey day, do you buy a fund the day of or after?
« Reply #2 on: April 07, 2016, 01:15:58 PM »
If you are buying a mutual fund, buy before the closing bell to lock in the price at the end of the day.  If you wait until after closing to buy, you'll get the price at the end of the next business day.  If the market rebounds, you missed an opportunity to get more shares.

Yes, this is a sort of market timing, but you do have the knowledge that you are getting a better price today than you would have yesterday.  Nobody knows what tomorrow will bring, of course.

If you are buying individual stocks or ETF's, you get the price (minus bid/ask spread) at the time that you buy, so it matters less.

abbythebear

  • 5 O'Clock Shadow
  • *
  • Posts: 8
Re: On a bad markey day, do you buy a fund the day of or after?
« Reply #3 on: April 07, 2016, 01:26:19 PM »
Ah, so in combination with what Solon said..... price is calculated at the end of the day.  But in order to get that price, I need to buy before the end of the day.

Thanks guys!

forummm

  • Walrus Stache
  • *******
  • Posts: 7357
  • Senior Mustachian
Re: On a bad markey day, do you buy a fund the day of or after?
« Reply #4 on: April 07, 2016, 01:43:10 PM »
Ah, so in combination with what Solon said..... price is calculated at the end of the day.  But in order to get that price, I need to buy before the end of the day.

Thanks guys!

Yes, generally. Check with the specifics of your provider (i.e. Vanguard, Fidelity, etc) to see what their cutoff time is to get today's market closing price. It's usually around 4PM, but it could vary from place to place.