Mutual Funds

Here Comes LPL Focus!

Published: Wed, 04 Aug 2021 13:33:01 +0000

Market Blog Wednesday, August 4, 2021 LPL Financial is so excited to kick off our annual Focus conference, with more than 10,000 attendees sharing ideas, learning, and having a great time over the next three days. Given the world we … Continue reading →

While Tough For Equities, August Has Been Good For Fixed Income

Published: Tue, 03 Aug 2021 15:58:25 +0000

Market Blog Tuesday, August 3, 2021 Most investors are aware that seasonal patterns exist in equities, but they may not be as familiar with the seasonal patterns in fixed income markets. As pointed out in the LPL Research Market Blog … Continue reading →

July Market Insights – Sixth Straight Monthly Gain for the S&P 500, Led by Growth

Published: Mon, 02 Aug 2021 17:00:29 +0000

Market Blog Monday, August 2, 2021 Index Performance View enlarged chart. U.S. and international equities In July, the U.S. major market indexes finished higher while international equities, as represented by the developed international markets (MSCI EAFE), and the emerging markets … Continue reading →

Did You Know Stocks Historically Peak in Early August?

Published: Mon, 02 Aug 2021 15:30:06 +0000

Market Blog Monday, August 2, 2021 Hard to believe, but we are in August already! The good news is stocks are still firmly in a bull market, but the bad news is the calendar is a potential worry now. As … Continue reading →

Weekly Market Performance – Six Straight Monthly Gains for the S&P 500

Published: Fri, 30 Jul 2021 20:11:06 +0000

Market Blog Friday, July 30, 2021 Index Performance View enlarged chart. U.S. and International Equities Markets Reverse Course This Week; Growth Names Pullback The major markets finished the week lower, reversing course from the previous week. Some disappointing corporate guidance … Continue reading →

China Weighs on Emerging Markets Indexes

Published: Fri, 30 Jul 2021 15:58:08 +0000

Market Blog Friday, July 30, 2021 China’s stock exchanges have been hit hard in response to several sudden regulatory actions that have dismayed investors. First came the crackdown on ride sharing service DiDi, which has about a 90% market share … Continue reading →

LPL Market Signals: An Epic Week of Market-Moving Events

Published: Thu, 29 Jul 2021 16:58:48 +0000

Market Blog Thursday, July 29, 2021 In the latest edition of LPL Market Signals, the LPL Research strategists discuss some of the biggest surprises of 2021, including the strong year-to-date performance for the stock market and surprising recent drop in … Continue reading →

Services Consumption Lifts GDP Growth

Published: Thu, 29 Jul 2021 15:58:41 +0000

Economic Blog Thursday, July 29, 2021 Lofty expectations for second quarter gross domestic product (GDP) growth were left somewhat wanting as a decent headline number fell short of expectations. Peering under the hood, though, we think this is still a … Continue reading →

LPL Street View: Let’s Play Some Focus!

Published: Wed, 28 Jul 2021 15:58:10 +0000

Market Blog Wednesday, July 28, 2021 We had some fun with our latest LPL Street View video, as Director of Research Mark Zabicki and Chief Market Strategist Ryan Detrick went outside to shoot some hoops and talk about our upcoming … Continue reading →

Federal Reserve Meeting Preview

Published: Tue, 27 Jul 2021 15:58:46 +0000

Market Blog Tuesday, July 27, 2021 The Federal Reserve (Fed) meets this week to discuss its ongoing support for the U.S. economy. During its regularly scheduled two-day meeting, the nineteen-member committee is expected to discuss if and when the Fed … Continue reading →

Weekly Market Performance – Strong Week for Growth Stocks as Earnings Season is Underway

Published: Fri, 23 Jul 2021 20:01:13 +0000

Market Blog Friday, July 23, 2021 Index Performance View enlarged chart. U.S. and International Equities Markets Higher as Growth Leads The major markets finished higher this week after starting the week lower, with the Dow Jones off by over 2% … Continue reading →

Leading Indicators Forecasting Continued Growth

Published: Fri, 23 Jul 2021 15:58:33 +0000

Economic Blog Friday, July 23, 2021 On Thursday, July 22, the Conference Board released its June 2021 report detailing the latest reading for the Leading Economic Index (LEI), a composite of ten data series that tend to lead changes in … Continue reading →

Buy the Dip | Daily Market Update

Published: Fri, 23 Jul 2021 14:58:16 +0000

Friday, July 23, 2021 Top Story Buy the dip Even after Monday’s big drop for stocks in the U.S., stocks have roared back and are now looking at a nice gain for the week. Here are some of the reasons … Continue reading →

LPL Market Signals: Mr. Powell Goes to Washington

Published: Fri, 23 Jul 2021 13:58:08 +0000

Market Blog Friday, July 23, 2021 Inflation is soaring and Jerome Powell still isn’t overly worried about it. In fact, he was grilled by Congress last week and held his ground on his inflation views. This week in the LPL … Continue reading →

U.S. Housing Starts Continue to Ramp Up

Published: Thu, 22 Jul 2021 15:58:37 +0000

Economic Blog Thursday, July 22, 2021 In data we received on Tuesday, July 20, U.S. Housing Starts increased 6.3% in June to 1.64 million units, a 3-month high. By region, housing starts rose in the South and West, and in … Continue reading →

Housing Starts Were Higher Than Expected This Week | Daily Market Update

Published: Thu, 22 Jul 2021 14:58:23 +0000

Thursday, July 22, 2021 Top Story Housing Starts were higher than expected this week (Tuesday), but the lack of housing supply still remains a problem. Housing starts were up 6.3% in June; continuing a sharp post-COVID rebound. The building activity … Continue reading →

Is It Time For A 5% Pullback?

Published: Wed, 21 Jul 2021 15:58:51 +0000

Market Blog Wednesday, July 21, 2021 Monday’s big down day was a harsh reminder of how markets actually can produce volatility. It was the worst day of the year for the Dow and only the second drop of 1% or … Continue reading →

Time For a More Significant Pullback Or Correction? | Daily Market Update

Published: Wed, 21 Jul 2021 14:58:53 +0000

Wednesday, July 21, 2021 Top Story Time for a more significant pullback or correction? Stocks have had an amazing run, but here are some things to consider. The S&P 500 Index hasn’t had a 5% pullback since last October, right … Continue reading →

The Recession Is Over, So What Happens Next?

Published: Tue, 20 Jul 2021 15:58:56 +0000

Market Blog Tuesday, July 20, 2021 The National Bureau of Economic Research (NBER) announced yesterday that the COVID-19 recession is over. If things don’t feel all that different, it’s because they announced the recession ended in April 2020. Yes, that’s … Continue reading →

The Shortest Recession Ever Is Over…15 Months Ago | Daily Market Update

Published: Tue, 20 Jul 2021 14:58:17 +0000

Tuesday, July 20, 2021 Top Story The shortest recession ever is over…15 months ago The National Bureau of Economic Research (NBER) announced yesterday that the economy bottomed in April 2020, making the COVID-19 recession the shortest on record and the … Continue reading →

Earnings Season Off to a Great Start | Daily Market Update

Published: Mon, 19 Jul 2021 14:58:33 +0000

Top Story Earnings season off to a great start Beat rates have been outstanding so far with 85% and 90% of S&P 500 companies beating earnings and revenue targets. Second quarter earnings growth is tracking to a nearly 70% year-over-year … Continue reading →

Weekly Market Performance – Markets Digest First Week of Q2 Earnings

Published: Fri, 16 Jul 2021 20:00:56 +0000

Market Blog Friday, July 16, 2021 Index Performance View enlarged chart. U.S. and International Equities Markets Mostly Lower As Utilities and Real Estate Gain Ground Most major markets sold off this week as Q2 earning season kicks off. Market participants … Continue reading →

A Check-In on Inflation

Published: Fri, 16 Jul 2021 15:58:58 +0000

Economic Blog Friday, July 16, 2021 This week has provided investors with a fresh batch of data carrying the potential to heavily affect the inflation debate. Tuesday brought us the Consumer Price Index (CPI) for June, while Wednesday saw the … Continue reading →

Retail Sales Came In Solidly Above Expectations | Daily Market Update

Published: Fri, 16 Jul 2021 14:58:30 +0000

Friday, July 16, 2021 Top Story Retail sales came in solidly above expectations Retail sales for June increased 0.6% month over month, ahead of Bloomberg’s consensus forecast for a 0.3% decline and following a 1.7% decline in May. Excluding autos … Continue reading →

Main Street Sentiment Remains Strong Despite Risks from Speedy Recovery

Published: Fri, 16 Jul 2021 11:58:27 +0000

Economic Blog Friday, July 16, 2021 Sentiment on Main Street remains strong as the U.S. economy continues to move towards normalcy, but concerns about the impact of a strong but uneven recovery are rising as higher prices, supply chain bottlenecks, … Continue reading →

LPL Market Signals: Midyear Outlook 2021 Is Here: What Does LPL Research Think Is On the Horizon?

Published: Thu, 15 Jul 2021 15:58:50 +0000

Market Blog Thursday, July 15, 2021 What a first half of 2021! As quick as it was, the economy continues to pick up speed as well. In fact, this could be one of the better years of economic growth we’ve … Continue reading →

Street View Midyear Outlook 2021 | Daily Market Update

Published: Thu, 15 Jul 2021 14:58:43 +0000

Thursday, July 15, 2021 Top Story Street View Midyear Outlook 2021 In the latest LPL Street View video, LPL Financial Chief Market Strategist Ryan Detrick takes a closer look at what the LPL Research team thinks is coming in the … Continue reading →

Quarterly Market Insights – Markets Solid through the Mid-Year Mark

Published: Wed, 14 Jul 2021 18:13:27 +0000

Market Blog Wednesday, July 14, 2021 Index Performance View enlarged chart. U.S. and International Equities This quarter provided positive results for all major market indexes. The top performer and standout was the growth-laden Nasdaq composite, which returned over 9% for … Continue reading →

Canary In The Coalmine?

Published: Wed, 14 Jul 2021 15:58:04 +0000

Market Blog Wednesday, July 14, 2021 To state the obvious, coal mining is a dangerous occupation. Not only do coal miners have to deal with collapsing tunnels and explosions, they also have to deal with the potential for dangerous carbon … Continue reading →

Canary In The Coalmine? | Daily Market Update

Published: Wed, 14 Jul 2021 14:58:06 +0000

Wednesday, July 14, 2021 Top Story Canary In The Coalmine? The 10-year Treasury yield’s fall of over 40 basis points (0.40%) has many investors asking if the bond market is signaling bad news about the economic recovery. The absence of … Continue reading →

LPL Research Releases Midyear Outlook 2021: Picking Up Speed

Published: Tue, 13 Jul 2021 16:00:29 +0000

Market Blog Tuesday, July 13, 2021 LPL Research is proud to announce the release of Midyear Outlook 2021: Picking Up Speed. While the speed can be exhilarating as economic growth accelerates, it can also be dangerous. Our updated outlook is … Continue reading →

Midyear Outlook 2021 | Daily Market Update

Published: Tue, 13 Jul 2021 14:58:24 +0000

Tuesday, July 13, 2021 Top Story Midyear Outlook 2021 launches today. While the speed can be exhilarating as economic growth accelerates, it can also be dangerous. Midyear Outlook 2021: Picking Up Speed is designed to help you navigate the risks … Continue reading →

What Will Companies Do for an Encore? | Daily Market Update

Published: Mon, 12 Jul 2021 14:58:28 +0000

Monday, July 12, 2021 Top Story What will companies do for an encore? After a stunning first quarter earnings season, we expect more good news this quarter. At the same time, we acknowledge the second quarter will almost certainly be … Continue reading →

Weekly Market Performance – Markets Resilient As We Enter the Second Half of 2021

Published: Fri, 09 Jul 2021 20:07:36 +0000

Market Blog Friday, July 9, 2021 Index Performance View enlarged chart. U.S. and International Equities Most of the U.S. and international markets were fractionally higher this week as traders were concerned about a potential peak in the global recovery, declining … Continue reading →

Is This the Start of a Correction?

Published: Fri, 09 Jul 2021 16:00:05 +0000

Market Blog Friday, July 9, 2021 The S&P 500 Index closed at a record high on Wednesday, yet investors seem increasingly on edge with the VIX Index, a measure of implied volatility on the S&P 500, spiking nearly 40% week-to-date. … Continue reading →

Is This the Start of a Correction? | Daily Market Update

Published: Fri, 09 Jul 2021 14:58:17 +0000

Friday, July 9, 2021 Top Story Is This the Start of a Correction? Despite the S&P 500 Index making a record high earlier this week, investors are clearly on edge with the CBOE Volatility Index (VIX) briefly spiking more than … Continue reading →

LPL Market Signals: Tips for Young Investors

Published: Thu, 08 Jul 2021 17:00:51 +0000

Market Blog Thursday, July 8, 2021 We mix it up this week on the LPL Market Signals podcast and bring on LPL Research’s Director of Research Marc Zabicki to discuss what he has learned about investing and working with Advisors … Continue reading →

ISM Service Strong, but Strong Enough?

Published: Thu, 08 Jul 2021 16:18:22 +0000

Economic Blog Thursday, July 8, 2021 The June Institute for Supply Management (ISM) Services Index was a bit softer than expected (60.1 vs. the Bloomberg consensus estimate of 63.5), although the overall reading remained near multi-year highs. The June figure … Continue reading →

Federal Open Market Committee Split on Tapering | Daily Market Update

Published: Thu, 08 Jul 2021 14:58:28 +0000

Thursday, July 8, 2021 Top Story Yesterday’s Federal Open Market Committee (FOMC) meeting minutes showed Committee is split on tapering Some members pulled forward their expectations for the appropriate timing of tapering while others noted that the “further substantial progress” … Continue reading →

Stocks Are Going Streaking

Published: Wed, 07 Jul 2021 15:58:14 +0000

Market Blog Wednesday, July 7, 2021 To quote the great Frank the Tank from Old School, “We’re going streaking!” Although Frank had another idea, stocks have been streaking in some historic ways, both near-term and longer-term. Let’s start with the … 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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