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bolido_sentimental  1yr ago (text post)   4134 thread views

Small-Scale Question Sunday for December 25, 2022

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Index funds can also be 'income' rather than 'accumulation'.

How does this work if the investment is losing money? Are you then expected to put up more money to compensate for the loss?

The price of the shares can go up or down, which would bring the value of the fund up or down. But every quarter the dividend payments from the shares would be paid out to the fund holders. This is usually around 2% of the value of the fund, but obviously can be lower in a poor business environment.

An accumulation fund would just take these dividends and buy more shares with them.

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