Mutual Funds

Weekly Market Performance – Market Move Higher Amid Positive Earnings and Economic Reports

Published: Fri, 15 Oct 2021 20:02:04 +0000

Market Blog Friday, October 15, 2021 Index Performance View enlarged chart. U.S. and International Equities Major U.S. and International Markets Finished Higher The major equity markets finished solidly in the green this week as we head into the genesis of … Continue reading →

Solid Retail Sales in September

Published: Fri, 15 Oct 2021 15:58:12 +0000

Economic Blog Friday, October 15, 2021 The U.S. Census Bureau reported overall retail sales grew 0.7% month over month in September vs. forecasts for a 0.2% decline, while retail sales excluding autos and gas also saw solid gains, rising 0.7% … Continue reading →

Inflation Measures are on the Move Again: 5 Charts With LPL Research

Published: Fri, 15 Oct 2021 12:00:08 +0000

Market Blog Friday, October 15, 2021 LPL Research is excited to bring the second episode of our new video series: 5 Charts with LPL Research. This week, LPL Financial Chief Market Strategist Ryan Detrick, CMT and Technical Strategist Scott Brown, … Continue reading →

That’s It, I Quit!

Published: Thu, 14 Oct 2021 18:44:59 +0000

Economic Blog Thursday, October 14, 2021 The U.S. Bureau of Labor Statistics (BLS) released its monthly Job Openings and Labor Turnover Survey (JOLTS) report this week revealing that the number of American workers who are voluntarily quitting their jobs is … Continue reading →

Inflation Concerns Persist

Published: Wed, 13 Oct 2021 15:58:09 +0000

Economic Blog Wednesday, October 13, 2021 The characterization of inflation as ”transitory” by Federal Reserve (Fed) Chair Jerome Powell—which has been the subject of debate for months—is likely to come under renewed pressure after the most recent inflation data release. … Continue reading →

Renewed Inflationary Concerns Pushing Global Yields Higher

Published: Tue, 12 Oct 2021 15:58:37 +0000

Market Blog Tuesday, October 12, 2021 The week of September 20 was notable for monetary policy as there were eleven central bank meetings, including the U.S., E.U., U.K., Turkey, and Norway, to name a few. While many of these countries … Continue reading →

New Video Series: 5 Charts With LPL Research

Published: Tue, 12 Oct 2021 12:25:34 +0000

Market Blog Tuesday, October 12, 2021 LPL Research is excited to introduce a new weekly video series, 5 Charts With LPL Research. Each week, LPL Financial Chief Market Strategist Ryan Detrick, CMT and Technical Strategist Scott Brown, CMT will review … Continue reading →

Quarterly Market Insights – S&P 500 Ekes Out Positive Return as Emerging Markets Retreat

Published: Mon, 11 Oct 2021 18:00:28 +0000

Market Blog Monday, October 11, 2021 Index Performance View enlarged chart. U.S. and International Equities This quarter provided mostly negative results for the major market indices. The top performer and standout was the bellwether Dow Jones Industrial Average. The international … Continue reading →

Third Quarter Earnings Season Preview

Published: Mon, 11 Oct 2021 15:58:52 +0000

Market Blog Monday, October 11, 2021 We have used most of the superlatives we know to describe corporate America’s stunning performances over the past two earnings seasons. Despite lofty expectations, results exceeded estimates by huge margins. We expect solid earnings … Continue reading →

Weekly Market Performance – Markets Rebound From Last Week’s Decline

Published: Fri, 08 Oct 2021 20:10:34 +0000

Market Blog Friday, October 8, 2021 Index Performance View enlarged chart. U.S. and International Equities Major U.S. and International Markets Finished Higher The major equity markets reversed course from last week to finish higher. The international markets results were mixed … Continue reading →

The Job Market Continues To Frustrate In September

Published: Fri, 08 Oct 2021 15:58:17 +0000

Economic Blog Friday, October 8, 2021 The September payroll report likely created more questions than it answered. The U.S. Bureau of Labor Statistics released its September employment report this morning, revealing that the domestic economy added a disappointing 194,000 jobs … Continue reading →

Street View: Market Volatility Is Perfectly Normal

Published: Fri, 08 Oct 2021 12:00:16 +0000

Market Blog Friday, October 8, 2021 There is no reason to panic with all the big news about the bull market—October is known for volatility. As LPL Financial Chief Market Strategist Ryan Detrick discusses in the latest LPL Street View, … Continue reading →

Demand Remains Strong Despite Persistent Supply Chain Problems

Published: Thu, 07 Oct 2021 16:15:27 +0000

Economic Blog Thursday, October 7, 2021 Based on recent readings of manufacturing and service sector activity, business demand remains strong, further damaging the “stagflation” narrative. At the same time, barriers to meeting demand continue to limit businesses’ ability to respond, … Continue reading →

The Most Important Chart In The World

Published: Wed, 06 Oct 2021 15:58:03 +0000

Market Blog Wednesday, October 6, 2021 And just like that, the calendar turned to October and volatility picked up in a big way, with three consecutive 1% moves for the S&P 500 Index to start the month. As we noted … Continue reading →

Bond Market Showing Signs of Worry Over Debt Ceiling

Published: Tue, 05 Oct 2021 15:58:44 +0000

Market Blog Tuesday, October 5, 2021 The debt limit—commonly called the debt ceiling—is the maximum amount of debt that the Treasury Department can issue to pay its, already committed, financial obligations. The amount is set through Congress and has been … Continue reading →

September Market Insights – The September Selloff

Published: Mon, 04 Oct 2021 16:00:51 +0000

Market Blog Monday, October 4, 2021 Index Performance View enlarged chart. U.S. and International Equities September has been the worst performing month over the past 10 and 20 years. Looking at the prior year, the S&P 500 pulled back over … Continue reading →

Weekly Market Performance – Goodbye September

Published: Fri, 01 Oct 2021 20:01:49 +0000

Market Blog Friday, October 1, 2021 Index Performance View enlarged chart. U.S. and International Equities Major U.S. and International Markets Finished lower The major equity markets finished the week, along with the month of September, lower. The international markets were … Continue reading →

Is Bearish Investor Sentiment Bullish for Stocks?

Published: Fri, 01 Oct 2021 15:58:17 +0000

Market Blog Friday, October 1, 2021 The latest weekly data from the American Association of Individual Investors (AAII) show a continued increase in the percentage of individual investors who are bearish (40.7%) about short-term market expectations and a decrease in … Continue reading →

Could There Be An October Crash?

Published: Thu, 30 Sep 2021 15:58:14 +0000

Market Blog Thursday, September 30, 2021 “October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” Mark Twain Well, it was bound … Continue reading →

Four Charts That Signal the Reopening Trade May Be Back

Published: Wed, 29 Sep 2021 15:58:41 +0000

Economic Blog Wednesday, September 29, 2021 Stocks have come a long way since the S&P 500 bear market low way back on March 23, 2020, but despite the general strength of the bull market we’ve seen two very different types … Continue reading →

Is the Infrastructure Plan a Catalyst for Lower Muni Yields?

Published: Tue, 28 Sep 2021 15:58:10 +0000

Market Blog Tuesday, September 28, 2021 The municipal market continues to be a relative bright spot for core fixed income investors. While most of the other “safe” parts of the core fixed income universe have generated negative returns this year, … Continue reading →

Weekly Market Performance – Small Caps And Energy Power This Week’s Results

Published: Fri, 24 Sep 2021 20:06:23 +0000

Market Blog Friday, September 24, 2021 Index Performance View enlarged chart. U.S. and International Equities Major U.S. Markets Finished higher while International Markets Selloff The major markets finished the week higher, with the Dow Jones Industrials leading the averages. Moreover, … Continue reading →

Leading Indicators Show Optimism For Domestic Economy

Published: Fri, 24 Sep 2021 15:58:04 +0000

Economic Blog Friday, September 24, 2021 On Thursday, September 23, the Conference Board released its August 2021 report detailing the latest reading for the Leading Economic Index (LEI), a composite of ten data series that tend to lead changes … Continue reading →

Federal Reserve Meeting Recap

Published: Thu, 23 Sep 2021 15:58:34 +0000

Economic Blog Thursday, September 23, 2021 The Federal Reserve (Fed) ended its two-day Federal Open Market Committee (FOMC) meeting yesterday and, as expected, there were no changes to current interest rate or bond purchasing policies. However, the Fed continues to … Continue reading →

LPL Market Signals: Another Lehman Brothers Moment?

Published: Wed, 22 Sep 2021 16:25:30 +0000

Market Blog Wednesday, September 22, 2021 Few had even heard of distressed Chinese property development giant Evergrande a week ago and now it’s the biggest headline for markets. This week in the latest LPL Market Signals podcast, Ryan Detrick and … Continue reading →

There Goes the 50-Day Moving Average

Published: Tue, 21 Sep 2021 15:58:52 +0000

Market Blog Tuesday, September 21, 2021 Well that was fun while it lasted. Yesterday, the S&P 500 closed below its 50-day moving average for the second consecutive day, breaking a streak that had held for the duration of 2021 and … Continue reading →

Weekly Market Performance – Markets Pull Back For Second Straight Week

Published: Fri, 17 Sep 2021 20:02:16 +0000

Market Blog Friday, September 17, 2021 Index Performance View enlarged chart. U.S. and International Equities Major Markets Finish Lower Amid Delta and Earnings Growth Concerns The major markets finished lower for a second straight week. Friday’s quadruple witching where individual … Continue reading →

Why Evergrande Isn’t The Next Lehman

Published: Fri, 17 Sep 2021 15:58:13 +0000

Market Blog Friday, September 17, 2021 Chinese property developer Evergrande’s liquidity crisis has sparked fear and massive selling in Chinese property stocks over the past several weeks. The big question is could this be the first domino to fall, sparking … Continue reading →

Retail Sales Surprise To The Upside

Published: Thu, 16 Sep 2021 15:58:05 +0000

Economic Blog Thursday, September 16, 2021 U.S. consumers shocked economists in August with their willingness to spend in the face of recent jitters over the economic outlook. This morning, the U.S. Census Bureau released August retail sales data showing overall … Continue reading →

Corporate Debt Issuance Continues Unabated

Published: Wed, 15 Sep 2021 15:58:22 +0000

Market Blog Wednesday, September 15, 2021 With summer (un)officially over, investment-grade corporate bond sales are ramping up again. Despite a four-day week last week, thirty-eight investment-grade companies sold $60.5 billion in the first two sessions, breaking a record for the … Continue reading →

Inflation Shows Signs Of Moderating

Published: Tue, 14 Sep 2021 17:41:57 +0000

Economic Blog Tuesday, September 14, 2021 After a crazy summer of nosebleed inflation readings, we may finally be starting to see signs of transitory inflation. The Bureau of Labor Statistics released the August Consumer Price Index (CPI) data this morning, … Continue reading →

Weekly Market Performance – Markets Down Modestly As Worries Grow

Published: Fri, 10 Sep 2021 19:59:12 +0000

Market Blog Friday, September 10, 2021 Index Performance U.S. and International Equities Major Indices Show Modest Weekly Declines as Delta Worries Mount All major markets finished lower as the investor concerns over the Delta variant, Federal Reserve (Fed) tapering, … Continue reading →

The Most Important (Technical) Chart in the World

Published: Fri, 10 Sep 2021 15:58:02 +0000

Market Blog Friday, September 10, 2021 Fun Fact Friday: The Dow Jones Transportation Average is actually the oldest US stock market index in existence, even older than the more-popular Dow Jones Industrial Average. Charles Dow developed the index, originally called … Continue reading →

Main Street Sentiment Remains Strong Despite Risks from Speedy Recovery

Published: Thu, 09 Sep 2021 16:16:03 +0000

Economic Blog Thursday, September 9, 2021 According to LPL Research’s analysis of the Federal Reserve’s (Fed) recently released Beige Book, business sentiment on Main Street has declined in recent months as the economy navigates the latest wave of COVID-19, but … Continue reading →

What Could Happen The Rest of the Year to Stocks and Bonds?

Published: Wed, 08 Sep 2021 15:58:03 +0000

Market Blog Wednesday, September 8, 2021 This week in the latest LPL Market Signals podcast, Ryan Detrick and Lawrence Gillum discussed global central bank policy, recently weakening economic data, and where stocks and bonds could go the remainder of this … Continue reading →

Global Monetary Policy and What Likely Comes Next

Published: Tue, 07 Sep 2021 15:58:58 +0000

Market Blog Tuesday, September 7, 2021 The Covid-19 pandemic was an unprecedented shock to a large majority of global economies. But the economic damage was met with an extraordinary global monetary response with the Federal Reserve (Fed), European Central Bank … Continue reading →

Weekly Market Performance – Markets Stout Amid Weak Jobs Report

Published: Fri, 03 Sep 2021 18:19:55 +0000

Market Blog Friday, September 3, 2021 Index Performance (as of 12:50 PM ET) View enlarged chart. U.S. and International Equities Emerging Markets Rebound The major markets finished mostly higher building on last week’s gains. Emerging markets, as represented by the … Continue reading →

August Payrolls Disappoint

Published: Fri, 03 Sep 2021 15:58:53 +0000

Economic Blog Friday, September 3, 2021 It seems to be two steps forward, one step back for the U.S. labor market. The U.S. Bureau of Labor Statistics released its August employment report this morning, revealing that the domestic economy added … Continue reading →

Accelerating Manufacturing Shows Economy’s Resiliency

Published: Thu, 02 Sep 2021 15:58:30 +0000

Market Blog Thursday, September 2, 2021 The Institute for Supply Management’s reading on U.S. manufacturing surprisingly accelerated in August, coming in at 59.9 versus July’s 59.5 and economists’ consensus expectation of 58.5. The solid reading does show the resiliency of … Continue reading →

August Market Insights – Another Strong Month for Stocks

Published: Wed, 01 Sep 2021 19:00:08 +0000

Market Blog Wednesday, September 1, 2021 Index Performance View enlarged chart. U.S. and International Equities All of the U.S. major market indexes finished August higher despite concerns about the COVID-19 Delta variant, with the S&P 500 Index making it seven … 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.

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