AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner practitioner and have performed fee only investment management and financial planning services for the past 11 years.
Question One of my better performing mutual funds in my 401k retirement plan dropped 6% to 7%, December 11th.Nothing in the market would suggest this drop in value. A friend told me, the reason for the devaluation is that the fund is probably paying a dividend and shares will be added to my account shortly(?)What is to be believed?
Answer That is probably correct. Many mutual funds are paying significant year end distributions, so this type of occurence would cause the NAV of the fund to drop and the difference in value is then made up to you in the form of additional shares. I hope this helps.
