**Investment Value**

### How do you know if the investment has any value?

The **value of your investment** is determined by the **value of the underlying assets** **in your investment** and the **asset price change** or if you **buy or sell off units during the period of the investment.**

### Your investment value can change depending on the underlying assets in the investment

When the **price of the units you own changes, this can affect your investment in a positive or a negative way**. However the scenario that you are optimistic for is for your unit trust to **earn returns through capital growth**, which will then effect the value of your **investment in a positive way.** If the underlying **assets are volatile**, then the **price of the units can fluctuate** during the investment period. The most important thing to keep in mind is as long as you **don’t sell your units off when the markets have dropped, you have not made a loss on your investment.**

### How do you calculate your investment value?

### Calculating your investment value when buying units

The value of your investment is calculated on the **amount of capital you want to invest and the price of the specific units** at that given time.

For example, if you had **R100 and the units cost R10 per unit**, you will be able to **purchase 10 units**, however if the price of the unit **dropped to R5 per unit, you will be able to buy 20 units.**

### Calculating the investment value with an ongoing investment

To determine the value of your investment on an ongoing basis, once you have purchased units, all depends on the **value of the underlying assets of the investment at any given time.**

So if we use the above example of **R100 that has bought you 10 units at R10 per unit**, if the price of the **units dropped from R10 per unit to R9 per unit,** the **value of your investment will change, as your 10 units are now only worth R90 and no longer worth R100.**

This is where **most people panic and try and sell off their units as fast as possible** to try and elevate any additional losses that could arise. However keep in mind that **even though your 10 units are only worth R900 now, you still have 10 units and just as fast as the unit priced dropped it can also rise**. So the unit price can go

**from R9 per unit to R12 per unit**,

**pushing the value of your investment from R90 to R120.**

So the way you calculate your investment value is by **taking the number of units you have and multiply that by each unit price.**

The other thing that can also affect the unit price is **buying more units or selling off units at any given time during the investment.**

All Video Clips and pictures supplied by Allan Gray

Date

September 1, 2014

Author

Grant van Zyl

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