Mutual Funds

Rising COVID-19 Cases Could Pressure the Recovery

Published: Mon, 23 Nov 2020 17:25:23 +0000

Economic Blog COVID-19 cases have been rising in several regions around the world, prompting many countries to implement new restrictions to curb the spread of the virus. Governments in a few European countries have rolled out what has been dubbed … Continue reading →

Market Update: Mon, Nov 23, 2020 | LPL Financial Research

Published: Mon, 23 Nov 2020 15:58:20 +0000

Daily Insights Stocks opened higher. S&P 500 Index opened about 0.4% higher as market participants continued to weigh the COVID-19 threat against vaccine prospects. Stocks responded to positive COVID-19 trial results from AstraZeneca in partnership with Oxford University. Asian markets … Continue reading →

Weekly Market Performance – Economic and Market Data Does Not Always Mix

Published: Fri, 20 Nov 2020 21:16:05 +0000

Market Blog Index Performance US and International Equities This week, as some of the economic news was pointing to worries of a potential economic slowdown, some areas of the stock market are looking ahead to a potential economic recovery. … Continue reading →

Leading Indicators Signal Economic Recovery Slowing

Published: Fri, 20 Nov 2020 16:58:11 +0000

Economic Blog Leading economic indicators are confirming what high-frequency data has been telling us for weeks: The rate of the domestic economic recovery, while still positive, is slowing. On November 19, the Conference Board released its October report detailing … Continue reading →

Market Update: Fri, Nov 20, 2020 | LPL Financial Research

Published: Fri, 20 Nov 2020 16:12:25 +0000

Daily Insights US markets open modestly mixed. US equities opened mixed this morning following Thursday’s afternoon rally. Investors bought equities Thursday on COVID-19 vaccine progress and an eventual economic turnaround, in spite of higher COVID-19 numbers and continued Washington gridlock … Continue reading →

Europe’s Lockdown 2.0 May Be Smarter

Published: Thu, 19 Nov 2020 16:58:58 +0000

Economic Blog Real-time European COVID-19 and economic data provides an insight into how the pandemic is affecting economies around the world. We’re monitoring real-time data because traditional economic data is too slow to pick up the changes that are occurring. … Continue reading →

Market Update: Thu, Nov 19, 2020 | LPL Financial Research

Published: Thu, 19 Nov 2020 15:58:35 +0000

Daily Insights Virus concerns mount. Stocks opened slightly lower this morning as COVID-19 spread has increased concerns that the economic recovery may be knocked off track by additional restrictions and changing consumer behavior. The S&P 500 Index is poised for … Continue reading →

5 Noteworthy Charts To Watch As Stocks Soar

Published: Wed, 18 Nov 2020 18:43:47 +0000

Market Blog First, the big economic data point this week was retail sales. Although the headline number was a little light at 0.3% versus an expected 0.5% gain month-over-month, it still hit another new all-time high along the way (source: … Continue reading →

Market Update: Wed, Nov 18, 2020 | LPL Financial Research

Published: Wed, 18 Nov 2020 15:32:28 +0000

Daily Insights US Markets open higher. Investors are taking advantage of marked-down equity names, reversing course from Tuesday. On Tuesday market participants were focused on COVID-19 case spikes and potential effects on the economic recovery. Gridlock on fiscal stimulus added … Continue reading →

Market Update: Tue, Nov 17, 2020 | LPL Financial Research

Published: Tue, 17 Nov 2020 15:58:39 +0000

Daily Insights S&P 500 Index opens lower following Monday rally Vaccine-driven gains may be increasingly priced in as the US rally fizzled in international markets overnight and US markets are giving back some of Monday’s gains in early Tuesday trading. … Continue reading →

2 Reasons Long-Term Rates Could Continue to Rise

Published: Tue, 17 Nov 2020 15:58:29 +0000

Market Blog Fixed income investors aren’t used to having to deal with the volatility of stocks, but in the year that is 2020, that is exactly what has happened thus far. Unfortunately, while we don’t see the volatility of … Continue reading →

Market Update: Mon, Nov 16, 2020 | LPL Financial Research

Published: Mon, 16 Nov 2020 16:07:47 +0000

Daily Insights Stocks open higher S&P 500 Index opened about 0.7% higher at a fresh all-time high while the Nasdaq saw a more modest gain. European markets broadly are up more than 1.5% in midday trading. Asian markets rose broadly … Continue reading →

Small Caps Join The New-Highs Party

Published: Mon, 16 Nov 2020 15:58:28 +0000

Market Blog It took more than two years, but small caps finally broke out to new highs, as the Russell 2000 Index on Friday closed at its first new high since August 31, 2018. This capped off one of the … Continue reading →

Weekly Market Performance – November 13, 2020 – Value vs. Growth; Could the Tides Be Changing?

Published: Fri, 13 Nov 2020 21:00:08 +0000

Market Blog Index performance US and International Equities Markets received positive vaccine news from Pfizer this week, a very positive sign for the industrials and other value-laden sectors that the end of the pandemic could be on the horizon. Value … Continue reading →

Market Update: Fri, Nov 13, 2020 | LPL Financial Research

Published: Fri, 13 Nov 2020 15:57:57 +0000

Daily Insights US markets point to a higher open. Markets opened higher, reversing lower closes across the board Thursday after talks of potential new COVID-19 restrictions. Value sectors underperformed growth for the second day in a row Thursday. European equities … Continue reading →

Is Masters Golf A Bogey Or Hole-In-One Market Predictor?

Published: Fri, 13 Nov 2020 13:14:30 +0000

Economic Blog This year’s Masters Golf Tournament teed off Thursday at the Augusta National Course in Georgia. While there will be some familiar sights as the players compete for the coveted green jacket, it will also be a year unlike any … Continue reading →

Earnings Rebound Picking up Speed

Published: Thu, 12 Nov 2020 16:58:30 +0000

Market Blog Third quarter earnings season has been outstanding relative to expectations by many measures. Some of the highlights: S&P 500 Index earnings are tracking to a 7.5% year-over-year decline, as shown in the LPL Chart of the Day, more … Continue reading →

Market Update: Thu, Nov 12, 2020 | LPL Financial Research

Published: Thu, 12 Nov 2020 15:59:14 +0000

Daily Insights S&P 500 Index opened lower. The market rotation toward cyclical value is taking a pause as the NASDAQ opened slightly higher. Jobless claims and consumer inflation highlight the economic calendar. European stocks are down nearly 1% overall in … Continue reading →

What’s Next for Bond Markets After the Election

Published: Wed, 11 Nov 2020 21:26:17 +0000

Economic Blog Bond markets have had quite a ride since Election Day. The 10-year Treasury yield had been climbing very slowly in the months leading up to the election as the economy improved, but possibly also in anticipation of a … Continue reading →

Market Update: Wed, Nov 11, 2020 | LPL Financial Research

Published: Wed, 11 Nov 2020 16:18:19 +0000

Daily Insights On this Veterans Day we say thank you to our men and women in uniform, past, present, and future. US markets open higher for Veteran’s Day. US markets open in the green after mixed market results Tuesday in which the … Continue reading →

LPL Market Signals: Post-Election Stability

Published: Wed, 11 Nov 2020 15:57:02 +0000

Market Blog In our recent Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick, Equity Strategist Jeff Buchbinder, and Chief Investment Officer Burt White discussed the election, the economy, and more, including: Market calm amid gridlock in Washington The … Continue reading →

Market Update: Tue, Nov 10, 2020 | LPL Financial Research

Published: Tue, 10 Nov 2020 15:57:27 +0000

Daily Insights S&P 500 Index opens near flat. Positive vaccine news sent the S&P 500 higher Monday, but the market seems to be pausing this morning. The S&P 500 Index finished a solid 1.2% higher on Monday, hitting its highest … Continue reading →

3 Election Charts That Caught Our Attention

Published: Mon, 09 Nov 2020 16:58:09 +0000

Market Blog Stocks just had their best week since April, with the S&P 500 Index incredibly a chip shot away from new all-time highs. Joe Biden will be the next President of the United States, but markets are confident Republicans … Continue reading →

Market Update: Mon, Nov 9, 2020 | LPL Financial Research

Published: Mon, 09 Nov 2020 15:59:13 +0000

Daily Insights Stocks are sharply higher. Futures were solidly higher on election clarity before today’s vaccine news, which has added to gains. The S&P 500 Index opened about 4% higher at a fresh all-time high. The small cap Russell 2000 … Continue reading →

Weekly Market Performance – November 6, 2020 – Post-Election Market Results

Published: Fri, 06 Nov 2020 21:01:09 +0000

Market Blog View enlarged chart. US and International Equities US stocks staged one of their biggest election week rallies ever, with all major markets finishing up over 5% this week. Small caps had a particularly big week, with the Russell … Continue reading →

Job Growth Continues as COVID-19 Cases Rise

Published: Fri, 06 Nov 2020 17:16:22 +0000

Economic Blog The US labor market shrugged off election uncertainty and continued to add jobs in October. Despite the waning effects of fiscal stimulus and rising COVID-19 cases, per the US Bureau of Labor Statistics, the US economy added 638,000 … Continue reading →

Market Update: Fri, Nov 6, 2020 | LPL Financial Research

Published: Fri, 06 Nov 2020 16:15:26 +0000

Daily Insights US markets pullback amid uncertainty. As ballots are still being tallied, equities opened little changed this morning. Investors appear to be in approval of a likely divided Congress outcome, offsetting concerns about a possible drawn-out battle for the … Continue reading →

10 Post-Election Reactions We Are Watching

Published: Thu, 05 Nov 2020 16:58:58 +0000

Market Blog As of Thursday morning, a winner to the 2020 presidential election has yet to be “officially” declared as several battleground states have yet to be called. Even as more clarity emerges from remaining votes being counted in … Continue reading →

Market Update: Thu, Nov 5, 2020 | LPL Financial Research

Published: Thu, 05 Nov 2020 16:02:32 +0000

Daily Insights Stocks opened sharply higher. With the election still too close to call, US stocks opened sharply higher as market participants continue to express approval for a likely split Congress outcome. The potential benefits for corporate America are—at least … Continue reading →

2 Post-Election Charts You Need to See

Published: Wed, 04 Nov 2020 17:00:05 +0000

Market Blog The election is over, but the questions are mounting. We don’t know who will be the next president as of Wednesday morning, but we do know that stocks tend to do well the final two months of an … Continue reading →

Market Update: Wed, Nov 4, 2020 | LPL Financial Research

Published: Wed, 04 Nov 2020 15:58:19 +0000

Daily Insights US markets opened sharply higher despite lack of winner. Following a solid close for US equities, the markets opened strongly in the green this morning. Investors appear to be pricing in increasing odds of a divided government, which … Continue reading →

Vote (If You Haven’t Already)

Published: Tue, 03 Nov 2020 17:05:08 +0000

Economic Blog 2020 has certainly been a bizarre year, and perhaps we have finally arrived at the culminating event—the US presidential election. While every election may be characterized as a major turning point in our country’s history, the context of … Continue reading →

Market Update: Tues, Nov 3, 2020 | LPL Financial Research

Published: Tue, 03 Nov 2020 16:28:10 +0000

Top Story: What to Watch Election Night Florida, Georgia, and North Carolina are key swing states that can count or process ballots before Election Day and whose polls close relatively early. They’ll be the bellwethers and should have most of … Continue reading →

October Market Insights

Published: Mon, 02 Nov 2020 17:51:18 +0000

Market Blog Index Performance View expanded table. View expanded table. View expanded table. US and International Equities The major market indices, as denoted by the S&P 500 and Nasdaq, gave back ground again in October with almost all sectors … Continue reading →

Market Update: Mon, Nov 2, 2020 | LPL Financial Research

Published: Mon, 02 Nov 2020 15:56:37 +0000

Daily Insights Stocks sharply higher on Election Day eve. Market participants appear to be looking past rising COVID-19 cases and election uncertainty this morning and finding buying opportunities after last week’s losses. The S&P 500 Index opened more than 1% … Continue reading →

Weekly Market Performance – October 30, 2020 – The Bears Came Out For Halloween

Published: Fri, 30 Oct 2020 20:06:12 +0000

Market Blog Index Performance US and International Equities An increase in COVID-19 cases in the United States and Europe and what they could mean for the economic outlook has caused turbulence in this week’s markets. Moreover, Washington gridlock over much-needed … Continue reading →

An Election Pattern You Might Not Know About

Published: Fri, 30 Oct 2020 15:59:36 +0000

Economic Blog With Election Day a mere five days away, we at LPL Research thought we would add one last election forecaster to the mix of what we’ve presented over the last several months—as much because of what it might … Continue reading →

Market Update: Fri, Oct 30, 2020 | LPL Financial Research

Published: Fri, 30 Oct 2020 14:58:15 +0000

Daily Insights Stocks sell off amid Thursday’s rally The market shrugged off COVID-19 new case numbers and ended Thursday higher. This followed Wednesday’s decline in which the S&P 500 Index pulled back the most since June of this year. US … Continue reading →

GDP Bounces Back

Published: Thu, 29 Oct 2020 16:06:34 +0000

Economic Blog The outbreak of COVID-19 and the subsequent lockdowns triggered the largest quarter over-quarter decline in gross domestic product (GDP) since WWII, so perhaps it comes as no surprise that the following quarter tallied the sharpest rebound in that … Continue reading →

Market Update: Thu, Oct 29, 2020 | LPL Financial Research

Published: Thu, 29 Oct 2020 15:25:51 +0000

Daily Insights Stocks were lower Wednesday, October 28—historically the best day of the year for the stock market—as the latest COVID-19 outbreak and election uncertainty weighed. Today market participants will take cues from the GDP report, jobless claims, and earnings … 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.