richfool wrote:Posters often make the point about dilution and investors owning a progressively smaller piece of the cake. I assume they mean owning a smaller part of the investment company, as opposed to that particular holding representing a decreasing proportion of their portfolio.
Either way, does it really matter, as the value of one's investment 'ebbs and flows' over time anyway, as can and does dividend income. Most people who hold these sorts of trusts/companies are holding them for dividend income and some growth. So surely the value of that investment and the dividends arising are in any event going to fluctuate somewhat. Aren't we just being picky about something which in practice is almost inconsequential to the small investor, or just quibbling over semantics? I don't know the answer, so am posing the question for greater minds to consider!!
Is it a 'Big Issue' or just a scrap of paper, type of thing? I.e. Can't we just let it wash over our heads?
It is not quibbling over semantics. It is a simple fact that anyone holding shares in say TRIG and who does not participate in a fundraising against the issuance of new shares is being diluted. It may not matter much at least in the short term but will over time, depending of course on how big the fundraising is in terms of the issuance of the new shares.
Dod