Mutual Funds

Anatomy of a Bond Market Sell-off

Published: Tue, 02 Mar 2021 18:34:23 +0000

Market Blog Tuesday, March 2, 2021 Coming into 2021, one of our higher-conviction ideas was that we would see rising long-term interest rates in the United States; it’s one of the reasons we recommended suitable investors consider an underweight to … Continue reading →

Big Day For Stocks | Daily Market Update

Published: Tue, 02 Mar 2021 16:00:25 +0000

Tuesday, March 2, 2021 Top Story Yield spike spooks stock investors In this week’s Market Signals podcast and video, LPL Research discusses soaring yields last week and examines the recent record breaking earnings season, plus updates from the Federal Reserve. … Continue reading →

February Market Insights – Energy and Financials Fuel February’s Markets

Published: Mon, 01 Mar 2021 17:03:21 +0000

Market Blog Monday, March 1, 2021 Index Performance View enlarged chart. US and International Equities This month provided positive results for the major market indexes. The top performer was the Russell 2000 small cap index, returning over 6% for the … Continue reading →

Fourth Quarter Earnings Boom | Daily Market Update

Published: Mon, 01 Mar 2021 16:00:10 +0000

Monday, March 1, 2021 Top Story Here Comes The Earnings Boom LPL Research reviews an incredible earnings season and speculates on a potentially strong earnings rebound for 2021 and beyond. Find out more in today’s Weekly Market Commentary, available at … Continue reading →

Weekly Market Performance – Higher Rates Spook Stocks

Published: Fri, 26 Feb 2021 21:01:32 +0000

Market Blog Friday, February 26, 2021 Index Performance View enlarged chart. US and International Equities All major market indexes ended this week lower. The MSCI EM Emerging Markets index was the worst performer, falling over 6% this week. The Dow … Continue reading →

Three Charts You Need to See

Published: Fri, 26 Feb 2021 16:59:06 +0000

Market Blog Friday, February 26, 2021 March is right around the corner and with it is a harsh reminder of one year ago when everything stopped. As we inch closer to a lot of reminders about March 2020, here are … Continue reading →

Strong Start To A New Bull Market | Daily Market Update

Published: Fri, 26 Feb 2021 16:00:44 +0000

Friday, February 26, 2021 Top Story Three charts to see Today we share three charts that have our attention on the LPL Research blog. As this bull nears one year old, it is one of the strongest starts to a … Continue reading →

Sentiment Getting Frothy, but Long-Term Bullish

Published: Thu, 25 Feb 2021 16:59:25 +0000

Market Blog Thursday, February 25, 2021 With investors taking note of improving COVID-19 trends, an expanding US economy, and additional fiscal stimulus expected in the coming weeks, many are wondering if market sentiment is getting ahead of itself, and the … Continue reading →

Balancing Market Optimism | Daily Market Update

Published: Thu, 25 Feb 2021 16:00:46 +0000

Thursday, February 25, 2021 Top Story Sentiment running hot? There’s a lot for equity investors to be optimistic about these days, and some are wondering if optimism is getting a bit ahead of itself raising the risks of a pullback. … Continue reading →

LPL Market Signals: Why Sustainable Investing is Sustainable

Published: Wed, 24 Feb 2021 18:02:03 +0000

Market Blog Wednesday, February 24, 2021 In our recent Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder are joined by guest speaker Jason Hoody, Head of Investment Manager Research, to discuss investments made … Continue reading →

Leading Indicators Signal Potential For Reacceleration

Published: Wed, 24 Feb 2021 16:59:01 +0000

Economic Blog Wednesday, February 24, 2020 Leading economic indicators are providing early signs that we may be exiting a recent soft patch and the economic recovery could be poised for a reacceleration. On Monday, February 22, the Conference Board released … Continue reading →

Potential Reacceleration | Daily Market Update

Published: Wed, 24 Feb 2021 16:00:59 +0000

Wednesday, February 24, 2021 Top Story LEI Signals Potential Reacceleration. The Conference Board released its Leading Economic Index (LEI) report for January on Monday, showing the series rose 0.5% month over month. We believe the report could represent an early … Continue reading →

Treasury Yields Are Rising. Now What?

Published: Tue, 23 Feb 2021 16:59:50 +0000

Market Blog Tuesday, February 23, 2021 Treasury yields started moving sharply higher this past month (remember that as yields go up, prices go down). And while the upward march began in earnest last August when the 10-Year Treasury yield bottomed … Continue reading →

Why Sustainable Investing I Daily Market Update

Published: Tue, 23 Feb 2021 16:00:58 +0000

Tuesday, February 23, 2021 Top Story New Market Signals Podcast Chief Strategist Ryan Detrick, Equity Strategist Jeffrey Buchbinder, and guest speaker Jason Hoody, Head of Investment Manager Research discuss why sustainable investing is a major trend that isn’t going away … Continue reading →

Sustainable Investing Review I Daily Market Update

Published: Mon, 22 Feb 2021 16:00:21 +0000

Monday, February 22, 2021 Top Story Sustainable Investing Year In Review LPL Research reviews sustainable investing & its positive environmental, social & ESG impact with financial return. Find out more in today’s Weekly Market Commentary, available at 1 p.m. ET. … Continue reading →

Weekly Market Performance – Mixed Markets Fueled By Energy

Published: Fri, 19 Feb 2021 20:58:16 +0000

Market Blog Friday, February 19, 2021 View enlarged chart. US and International Equities The major market indexes ended this week mixed with the Dow Jones Industrials as the only major average higher. Results were mixed outside the United States as … Continue reading →

One Year Later: 3 Lessons Learned Since the Market Peak

Published: Fri, 19 Feb 2021 18:53:38 +0000

Market Blog Friday, February 19, 2021 Today marks one year since the market began to price in the effects that COVID-19 would have on the world. The old market adage “stairs up, elevator down” certainly rang true over the coming … Continue reading →

Market Peak Lessons I Daily Market Update

Published: Fri, 19 Feb 2021 16:00:43 +0000

Friday, February 19, 2021 Top Story What have we learned since last year’s market peak? Today marks exactly one year from the peak for the S&P 500 Index before markets began to reflect the future impact of COVID-19, triggering the … Continue reading →

Stimulus Matters: Retail Sales Rebound Big in January

Published: Thu, 18 Feb 2021 17:00:16 +0000

Economic Blog Thursday, February 18, 2021 The US economy had a tumultuous year in 2020, to say the least, and after rebounding strongly in the third quarter, the holiday surge in COVID-19 cases increased the risk that the economy may … Continue reading →

Economic Data Surprising Upside I Daily Market Update

Published: Thu, 18 Feb 2021 16:06:20 +0000

Thursday, February 18, 2021 Top Story Economic data surprising to the upside globally Based on the Citi Economic Surprise Indexes, economic data over the last three months in the major developed economies has mostly exceeded expectations. The positive US reading … Continue reading →

LPL Street View: 3 Types of Lies

Published: Wed, 17 Feb 2021 17:00:52 +0000

Market Blog Wednesday, February 17, 2021 “There are three kinds of lies: lies, darn lies, and statistics.” Mark Twain As Mark Twain famously said many years ago, statistics can be twisted and turned however you’d like, telling whatever story you … Continue reading →

Retail Sales Rebound | Daily Market Update

Published: Wed, 17 Feb 2021 15:59:23 +0000

Wednesday, February 17, 2021 Top Story Retail sales rebound in January. US retail sales rose 5.3% month over month in January according to the US Census Bureau, ahead of Bloomberg consensus forecasts of 1.1%. The surge in retail sales was … Continue reading →

LPL Market Signals: Finding Yield In a Low Yield World

Published: Wed, 17 Feb 2021 06:00:23 +0000

Market Blog Wednesday, February 17, 2021 In our recent Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder discuss some under-the-radar ideas to add income to portfolios, look at some of the factors driving … Continue reading →

Got Yield? Hold the Rate Risk, Please

Published: Tue, 16 Feb 2021 16:54:25 +0000

Market Blog Tuesday, February 16, 2020 In LPL Research’s Weekly Market Commentary this week, we looked at some stock and bond options that may be attractive income-producing ideas for suitable income-oriented investors. On the bond side, many income-oriented investors are … Continue reading →

The Search For Income | Daily Market Update

Published: Tue, 16 Feb 2021 16:00:21 +0000

Monday, February 16, 2021 Daily Insights Global markets avoid chill of cold and ice across the United States Weather-related power outages temporarily limited US oil output, helping to push the US oil benchmark to over $60/barrel for the first time … Continue reading →

Weekly Market Performance – The Week Belonged to Energy and Emerging Markets

Published: Fri, 12 Feb 2021 20:59:01 +0000

Index Performance Friday, February 12, 2021 View enlarged chart. US and International Equities The major market indexes ended a second consecutive week in the green with all averages solidly higher. The Russell 2000 Small Cap Index, which has been a … Continue reading →

The Stock Market’s Cost of Admission

Published: Fri, 12 Feb 2021 17:00:29 +0000

Market Blog Friday, February 12, 2021 “One of the most helpful things that anybody can learn is to give up trying to catch the last eighth—or the first. These two are the most expensive eighths in the world.” –Jesse Livermore … Continue reading →

Tune Out The Noise | Daily Market Update

Published: Fri, 12 Feb 2021 16:00:01 +0000

Friday, February 12, 2021 Top Story Looking for reasons to sell? There have been countless stock market headlines over the past 10 years that may cause investors to lose track of their long-term investment goals. With the growing concern these … Continue reading →

LPL Street View: Message In A Bottle

Published: Thu, 11 Feb 2021 18:00:05 +0000

Market Blog Thursday, February 11, 2021 A plethora of economic statistics exist that judge and measure economic progress and output. Some measures are considered leading indicators in that they help predict or forecast future economic changes. In addition, some are … Continue reading →

Inflation or Reflation? That is the Question

Published: Thu, 11 Feb 2021 17:00:27 +0000

Economic Blog Thursday, February 11, 2021 The recession appears to be behind us in the United States, and the early stages of an economic expansion have been taking shape. There is a growing debate over whether an expanding economy, in … Continue reading →

New Street View Video: Three Types of Lies | Daily Market Update

Published: Thu, 11 Feb 2021 16:00:13 +0000

Thursday, February 11, 2021 Top Story New Street View video: Three Types of Lies LPL Financial Research Chief Market Strategist Ryan Detrick illustrates how you can take any data and tell any story you want, but when you want to … Continue reading →

Why Bulls Will Like The Year Of The Ox

Published: Wed, 10 Feb 2021 17:00:50 +0000

Market Blog Wednesday, February 10, 2021 “Bulls make money, bears make money, and pigs get slaughtered.” Old Wall Street saying. The Chinese New Year (often called the Lunar New Year) will kick off Friday, February 12, and with it will … Continue reading →

The Lunar New Year | Daily Market Update

Published: Wed, 10 Feb 2021 16:00:33 +0000

Wednesday, February 10, 2021 Daily Insights US streak ends at 6 days US stocks opened higher after Consumer Price Index (CPI) data reveals inflationary pressures remain benign. European markets are mixed in midday trading. Asian stocks were strong overnight with … Continue reading →

Inflation Expectations Highest Since 2014

Published: Tue, 09 Feb 2021 17:52:59 +0000

Economic Blog Tuesday, February 9, 2021 The 10-year breakeven inflation rate, a market-based measure of inflation expectations, hit its highest level last Friday, February 5, since 2014. Still, at 2.21% expected annual inflation over the next 10 years, it remains … Continue reading →

Time For An Upgrade | Daily Market Update

Published: Tue, 09 Feb 2021 16:00:01 +0000

Tuesday, February 9, 2021 Top Story LPL Research Says It’s Time for an Upgrade In this week’s Market Signals podcast and video, Ryan Detrick and Jeff Buchbinder analyze the continued resiliency of the US economy and provide strong reasons for … Continue reading →

Forecast For Growth | Daily Market Update

Published: Mon, 08 Feb 2021 16:00:05 +0000

Monday, February 8, 2021 Daily Insights US stocks open modestly higher after last week’s strong rally European markets firmly higher in midday trading with the United Kingdom outperforming after lagging last week. Asian stocks mostly higher as Japan’s Nikkei 225 … Continue reading →

Weekly Market Performance – Stocks Reverse Course From Last Week’s Selloff

Published: Fri, 05 Feb 2021 21:03:11 +0000

Index Performance Friday, February 5, 2021 View enlarged chart. US and International Equities The major market indexes ended this week in the green with all averages solidly higher. The Russell 2000 Small Cap Index, which has been a bright spot … Continue reading →

US Jobs Market Seeking Shot In The Arm

Published: Fri, 05 Feb 2021 17:15:03 +0000

Economic Blog Friday, February 5, 2021 US payrolls grew month over month in January following a brief dip into negative territory in December. Peering under the hood, though, this report did little to dispel the notion that the labor market’s … Continue reading →

Slight Positive Jobs Growth | Daily Market Update

Published: Fri, 05 Feb 2021 16:00:32 +0000

Friday, February 5, 2021 Top Story Jobs growth slightly positive The US economy gained 49,000 jobs in January according to the US Bureau of Labor Statistics, missing Bloomberg survey estimates of a 105,000 gain, with strong negative revisions to December … Continue reading →

Have We Seen the Top in Negative Yielding Debt?

Published: Thu, 04 Feb 2021 17:00:49 +0000

Market Blog Thursday, February 4, 2021 Negative yielding debt has been one of the most extraordinary and peculiar consequences of global monetary policy initiatives, turning the basic premise of fixed income investing upside down. Instead of one party lending another … Continue reading →

Mutual Fund Basics

A mutual fund pools the money of many investors to purchase securities. The fund's manager buys securities to pursue a stated investment strategy. By investing in the fund, you'll own a piece of the total portfolio of securities, which could be anywhere from a few dozen to hundreds of stocks. This provides you with a convenient way to obtain instant diversification that would be harder to achieve on your own.

More Information on Mutual Funds

Types of mutual funds

There are many mutual funds to choose from. The two most common types are stock mutual funds and bond mutual funds. A stock fund invests in common stocks issued by U.S. and/or international companies. Funds are often named and classified according to investment style or objective, which can be stated in various ways. For example, some stock mutual funds buy stocks in companies believed to have potential for long-term growth in share price. Other stock mutual funds look for current income by focusing on companies that pay dividends. Sector funds buy stocks in a particular sector, such as technology or health care. Still other mutual funds may purchase stocks based on the size of the company (e.g., stocks of large, mid-size, or small companies).

Although the name of a stock mutual fund generally offers insight into its investment style and objective, it is important not to rely on the name alone in determining whether a particular fund is what you want. The fund prospectus is like an owner's manual and contains information about the kind of investment style that the manager(s) employ, and the kinds of stocks that the fund will buy.

Note: Before investing in any mutual fund, carefully consider its investment objectives, risks, fees, and expenses, which are discussed in the prospectus available from the fund. Read the prospectus carefully before investing.

A bond fund is made up of debt instruments that governments or corporations issue to raise capital. They are designed to provide investors with interest income in the form of regularly scheduled dividends. If you bought individual bonds, you would need to concern yourself with their maturity dates and the reinvestment of your funds. Buying shares of a bond fund relieves you of these concerns; the fund manager handles them for you.

Bond funds are primarily classified according to the issuers of the bonds in the fund's portfolio and/or to the term of the bonds. For example, municipal bond funds buy bonds issued by municipalities. The income from these is free from federal tax (however, a portion of the income may be subject to the federal alternative minimum tax) and may be free from state and local taxes. Similarly, some funds invest only in U.S. Treasury debt instruments (e.g., bonds, bills, and notes) or high-grade (or low-grade) corporate bonds. Some bond funds, from all types of issuers, limit themselves to bonds maturing in the short, intermediate, or long term.

There are other types of mutual funds that you will encounter. Funds that invest in both stocks and bonds (or stocks, bonds, and cash alternatives) are often known as balanced funds. A money market fund buys extremely short-term debt instruments and is often used as a place to put cash, short term, until it is needed elsewhere. (Though a money market fund attempts to maintain a $1 per share value, there is no guarantee it will always do so, and it is possible to lose money investing in a money market fund.) Index funds attempt to duplicate a standardized, broad-based index such as the Standard & Poor's 500 (S&P 500) stock index or Moody's bond index by holding a portfolio of the same securities used by the index in an attempt to match the index's performance as closely as possible.

What are the benefits of investing in a mutual fund?

Diversification: Most mutual funds own dozens or even hundreds of securities. The managers often spread the fund's assets over more than one type of investment (e.g., both stocks and bonds, or stocks from a variety of industries). This exposes you to less potential risk than buying just a few individual securities. If some of the fund's holdings perform poorly, they may be offset by others doing well (though diversification cannot guarantee a profit or ensure against a loss).

Professional money management: When you buy shares in an actively managed mutual fund, part of what you pay for is the fund manager's expertise. The manager analyzes hundreds of securities (both current and contemplated holdings) and makes decisions on what and when to buy and sell.

Small investment amounts: Depending on fund rules, you can open an account and make subsequent contributions with a very small initial investment. You can even set up automatic investments through a transfer of funds from your bank account.

Liquidity: You can convert your mutual fund investment into cash (i.e., redeem your shares) by making a request to the fund company in writing, over the phone, or on the Internet on any business day.

Of course, mutual funds are not guaranteed investments. The price of all mutual fund shares can change daily, and you'll receive the current value of your shares when you sell--which may be more or less than you paid. All investing involves risk, including the possible loss of principal, and there can be no assurance that any investing strategy will be successful.

Sales charge and other costs

All mutual funds have expenses that investors must pay for, but the sales charge, or load, is probably the most significant and varied among funds. These sales charges are generally paid as commissions to stockbrokers, financial advisors, and insurance agents. The sales charge may be deducted at the time you purchase shares of the mutual fund (front-end load), leaving less to work for you, or it may be charged at the point of redemption (back-end load). Some mutual funds, known as no-load funds, have no sales charges.

Pay attention to a mutual fund's other fees and expenses, as well. Look at a fund's expense ratio, which is calculated by dividing the fund's annual expenses by the fund's average net assets. Expenses affect a fund's net return. The higher the expense ratio, the less money is being put to work for you.

Past performance

Fund managers

One of the advantages of purchasing shares in an actively managed mutual fund is professional money management. The past performance of the fund is a reflection of the fund manager's ability to effectively manage its assets. You should research the current manager's history with the fund; was the fund's performance his or her achievement? If the fund has a new manager, make sure that individual's investment style matches your expectations.

Contact a VyStar Investment Services Financial Advisor today by phone (904) 908-2495 or email VISMarketing@vystarcu.org.

Check the background of investment professionals associated with this site on FINRA’s BrokerCheck.