Stocks are arbitrary units of corporate account and companies always want new investors, if there’s so much demand for their stock that there’s no supply they just issue more stock. But open-ended mutual funds - The type I’d recommend investing in - Aren’t priced by share because they aren’t traded on exchanges. They’re priced by a similar metric called Net Asset Value or NAV. Investopedia explains it better than I can.
It depends on the fund. Mutual funds have a prospectus that defines exactly how they’ll behave. Some funds leave room for management discretion while others are almost mechanical. They make their holdings public, so you know exactly what they’re composed of. I don’t think there’s much limit on what they could buy, it’s defined more by the strategy of the fund.
Does that answer your question? I wasn’t really even sure what you were asking just doing my best to be informative.
Stocks are arbitrary units of corporate account and companies always want new investors, if there’s so much demand for their stock that there’s no supply they just issue more stock. But open-ended mutual funds - The type I’d recommend investing in - Aren’t priced by share because they aren’t traded on exchanges. They’re priced by a similar metric called Net Asset Value or NAV. Investopedia explains it better than I can.
They also buy back shares and reduce their shareholders.
The ROI will drop if companies have too much money.
That just shifts my question. What can those funds buy?
It depends on the fund. Mutual funds have a prospectus that defines exactly how they’ll behave. Some funds leave room for management discretion while others are almost mechanical. They make their holdings public, so you know exactly what they’re composed of. I don’t think there’s much limit on what they could buy, it’s defined more by the strategy of the fund.
Does that answer your question? I wasn’t really even sure what you were asking just doing my best to be informative.