Share cost vs. share return


Q. I’m a federal law enforcement agent that has been contributing about $1,500 per month, which includes the matching contribution. For the last few years I have been investing 100 percent into the S fund, and this year I have been investing 20 percent in the F fund, 30 percent in the C fund and 50 percent in the S fund. I have been a federal employee since 2009 and I have asked a number of agents at my work throughout the years if purchasing shares that are less inexpensive such as in the L 2050 will provide me with a lot more income vs. S fund since I could buy more shares in the L fund.

The way I understood it was that the share price or having thousands of shares in the G fund or L fund don’t matter; what is important is making the most interest from the share, i.e. the S fund or C fund. Clarification in this matter would be greatly appreciated.

A. There is no advantage to buying fund shares with lower prices. The share price nothing more than the fund’s total value divided by the number of shares. A little basic arithmetic will quickly prove that this is unrelated to the rate of return on your investment.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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