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Shares

title: Shares, Not Dollars description: [AFW S.2.12] Investment Principle #12: Part ¼ of "Shares". published: true date: 2026-06-30T08:09:09.339Z tags: editor: markdown dateCreated: 2021-06-04T01:35:57.418Z

Watch Shares vs Dollars (all 4 parts) VIDEO

Watch Shares, not Dollars (2023) VIDEO

Pro-Tip: For variable annuities with guaranteed income riders, focus on the withdrawal base more so than the account value, or the shares.

  • Your goal is to accumulate shares, not dollars.

  • Shares constitute "ownership" whereas "dollars" or "account values" are more elusive.

  • The number of shares you own never decreases (unless you sell them). The market cannot "take away" shares. The value per share rises and falls with the market, but you can never "lose" your shares (unless the fund goes kaput).

  • Shares are like owning an apartment complex. The rent you charge per apartment changes based upon the market, but you never "lose" an apartment. Your goal is to get as many "apartments" as you can.


Parable

Imagine you buy a house for $100,000 and years later a real-estate friend tells you happenstance that in the current market you house is only "worth" $80,000. Would you sell it because you "lost" $20k and you're afraid it will go down further? Then put the $80k into a savings account and move in to an apartment, and few years later when the market goes back up and your old house is now worth $120k you re-buy it with the $80k plus $40k extra?!? No, that's silly. Then why would you do that with your mutual funds shares?