How are shares (when bought) calculated?

[Mike vB]

Please tell me if I'm correct in my thinking (figures are hypothetical)...

Say I have $100 (or 5%) of my paycheck allocated to TSP -
Current G share value is $20
Current C share value is $10

(1) When I get paid each 2 weeks and the electronic "buy" is made, and I have my allocation 100% G fund, am I buying 5 shares?

(2) If so, and with the C fund being less, wouldn't it make sense for me to buy 100% C fund (or whatever is lowest at the time) since I'd get 10 shares (vs. only 5 with G)?

(3) Am I correct that this "buy" is made with each bi-weekly paycheck, or is it monthly?

Thanks in advance

 

[KevinD]

1) Yes

2) You have the shares with a "value." I think you should have said "cost." In my thinking the G shares have more value right now because the C fund keeps losing money and the G keeps going up although modestly.

3) Every 2 weeks.

Looking forward to others views.

 

[Callme_CO]

Please tell me if I'm correct in my thinking (figures are hypothetical)...

Say I have $100 (or 5%) of my paycheck allocated to TSP -
Current G share value is $20
Current C share value is $10

(1) When I get paid each 2 weeks and the electronic "buy" is made, and I have my allocation 100% G fund, am I buying 5 shares?

yeah you would be buying 5 shares based on your information.

(2) If so, and with the C fund being less, wouldn't it make sense for me to buy 100% C fund (or whatever is lowest at the time) since I'd get 10 shares (vs. only 5 with G)?

Buying G fund you would get 5 share, and buying C fund you would get 10 shares. Both will equal up to $100. Now you do get more C fund shares and so with more shares if the C fund price increases faster than the G fund your balance would increase faster.

(3) Am I correct that this "buy" is made with each bi-weekly paycheck, or is it monthly?

It is bi-weekly if that is how you are paid

 

[tsptalk]

(2) If so, and with the C fund being less, wouldn't it make sense for me to buy 100% C fund (or whatever is lowest at the time) since I'd get 10 shares (vs. only 5 with G)?

It's an illusion. Share price is basically meaningless except for being a way to keep score. Only the rate at which it grows or drops matters.

An example is: If IBM is $100 a share, and Acme Dog Groomer is $2 a share, is the Dog Groomer a better investment because you'd get 50 shares with your $100 instead of 1 share of IBM? Maybe, maybe not. It depends which you believe is going to grow more.

 

[ChemEng]

Just showing the math example to its conclusion:

1. 1 share IBM at $100 gets 50% increase goes up to $150/share. You now have ($150/share)*(1 share)=$150.
2. 50 shares of Dog Groomer at $2 gets 50% increase goes up to $3/share. You now have ($3/share)*(50 shares)=$150.

Both end up in exactly the same position in terms of cash for the same asset response.

It's an illusion. Share price is basically meaningless except for being a way to keep score. Only the rate at which it grows or drops matters.

An example is: If IBM is $100 a share, and Acme Dog Groomer is $2 a share, is the Dog Groomer a better investment because you'd get 50 shares with your $100 instead of 1 share of IBM? Maybe, maybe not. It depends which you believe is going to grow more.

 

[Birchtree]

When you dollar cost average looking for the bottom you must be able to emotionally absorb some pain because your position will constantly be devalued - but then again when our situation turns for the upside you'll have a greater price value change because you bought more shares at lower pricing. DCAing is the redeemer of all portfolios you just have to have the courage to accumulate those precious shares and enjoy some pain in the process. If you are military you will only accumulate on a monthly basis.

 

[Mike vB]

After a 30-min talk with a co-worker, I got it straight...

It's the value of the combined number of shares, not the number.

That only matters when a share price moves up (or down) or an IFT occurs.

 

[ChemEng]

It's the value of the combined number of shares, not the number.

That only matters when a share price moves up (or down) or an IFT occurs.

Exactly.