Published: Wed, 30 Sep 2020 17:58:27 +0000
Market Blog In the recent LPL Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder discussed recent equity weakness and why it isn’t a major warning, along with COVID-19 worries and more, including: Recent … Continue reading →
Published: Wed, 30 Sep 2020 16:32:12 +0000
The first presidential debate is now in the books, with two more (maybe) ahead and a vice presidential debate on October 7. The debate was raucus, occasionally uncouth, and more than a little surreal for viewers at home. But did … Continue reading →
Published: Wed, 30 Sep 2020 15:05:55 +0000
Daily Insights Stocks opened higher. US equities reversed earlier losses following a contentious US presidential debate Tuesday night that raised more questions of a potentially contested election. On the flipside, House Speaker Nancy Pelosi noted positive discussions with US Treasury … Continue reading →
Published: Tue, 29 Sep 2020 16:00:03 +0000
Market Blog An old Wall Street adage says bond markets are smarter than equity markets, so when stocks encounter volatility, investors often look to the bond market for clues about the potential severity of equity market weakness. The option-adjusted spread … Continue reading →
Published: Tue, 29 Sep 2020 14:58:36 +0000
Daily Insights S&P 500 Index opens near flat after gains in four out of the last five sessions. US stocks saw broad gains Monday with a cyclical tilt as value stocks, led by energy and financials, kept pace with growth; … Continue reading →
Published: Tue, 29 Sep 2020 13:58:16 +0000
Market Blog The first presidential debate is tonight, September 29, with millions of people expected to tune in to see how each candidate handles the pressure. With tensions heightened amid an election that may be much closer than the polls … Continue reading →
Published: Mon, 28 Sep 2020 14:58:36 +0000
Daily Insights Stocks moving higher. US stocks opened in the green this morning following last Friday’s rally. The S&P 500 Index was down four consecutive weeks for the first time in more than a year. It hasn’t been down five … Continue reading →
Published: Fri, 25 Sep 2020 20:02:23 +0000
Market Blog Index Performance S&P 500 Index: -0.6% Dow Jones Industrial Average: -1.8% Nasdaq Composite: 1.1% US and International Equities The S&P 500 Index moved higher three days this week, but a 2.4% loss Wednesday pushed this index to its … Continue reading →
Published: Fri, 25 Sep 2020 16:00:03 +0000
Market Blog The September weakness continued with the S&P 500 Index 9.6% off the all-time high set on September 2 (as of 9/23/20). It is important to remember that after a 60% rally in the S&P 500—and much more in … Continue reading →
Published: Fri, 25 Sep 2020 14:49:54 +0000
Daily Insights Markets pull back. US equities are giving back some ground this morning, and that may mean the first four-week losing streak for the S&P 500 Index since August 2019. Headlines are quiet today. Democrats in the US House … Continue reading →
Published: Thu, 24 Sep 2020 15:57:45 +0000
Economic Blog In recent months, we have warmed up to Europe as a destination for equity investments in global portfolios. Through July, Europe had done a relatively good job containing the first wave of COVID-19, and cases were plummeting to … Continue reading →
Published: Thu, 24 Sep 2020 15:05:00 +0000
Daily Insights Stocks attempt to regain footing after Wednesday’s losses. Stocks are little changed at the open this morning after the S&P 500 Index tumbled 2.4% Wednesday, bringing its decline since September 2 to 9.6%, due in part to the … Continue reading →
Published: Wed, 23 Sep 2020 18:15:23 +0000
Market Blog In the recent LPL Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder celebrate the 100th episode of this client-approved podcast, along with putting the recent stock market weakness in perspective and … Continue reading →
Published: Wed, 23 Sep 2020 15:58:14 +0000
Market Blog On March 23, 2020, the S&P 500 Index closed down 2.9% for the day, bringing its total loss from its all-time high to 33.9%. The index was in the midst of its fastest bear market ever. A day … Continue reading →
Published: Wed, 23 Sep 2020 14:58:11 +0000
Daily Insights Markets rebounded Tuesday. A tumultuous September for equities caused bargain hunters to take advantage of oversold conditions Tuesday, snapping a four-day losing streak for the S&P 500 Index. House Democrats and the White House reached a tentative deal … Continue reading →
Published: Tue, 22 Sep 2020 15:59:06 +0000
Market Blog A few weeks ago we looked at how different bond sectors performed during rising rate periods during the last economic cycle (2009–2020). Today we look at falling rate periods—not the outcome we expect, but it can still be … Continue reading →
Published: Tue, 22 Sep 2020 14:58:14 +0000
Daily Insights S&P 500 extends sell-off. Despite a strong rally in the final hour of trading, the S&P 500 Index extended its recent sell-off to open the week. As of Monday’s close, the index is now a little over 8% … Continue reading →
Published: Mon, 21 Sep 2020 18:15:00 +0000
Economic Blog We check in again today on some of the real-time economic data that LPL Research is monitoring to provide timely and valuable insights into the state of the US economy. Traditional economic data is often reported too slowly … Continue reading →
Published: Mon, 21 Sep 2020 14:58:12 +0000
Daily Insights Pullback continues. Stocks opened lower this morning as the S&P 500 Index attempts to break its three-week losing streak that has left it more than 7% below its September 2 high. Political uncertainty following Justice Ruth Bader Ginsberg’s … Continue reading →
Published: Fri, 18 Sep 2020 20:14:25 +0000
Weekly Market Performance – September 18, 2020: Markets Show Resilience Market Blog Index Performance S&P 500 Index: -0.6% Dow Jones Industrial Average: 0.0% Nasdaq Composite: -0.6% US and International Equities The equity markets attempted to gain marginal ground this … Continue reading →
Published: Fri, 18 Sep 2020 15:58:50 +0000
Market Blog One of the top requests we’ve received the past few weeks is for more charts on the US elections. We shared some of our favorite in Election Charts You Need to See: Part 1 and Part 2, and … Continue reading →
Published: Fri, 18 Sep 2020 15:06:11 +0000
Daily Insights TGIF. Stocks opened flat on an extremely light news day. Investors continued to digest the Federal Reserve’s decision from Wednesday and an influx of economic data. The S&P 500 Index is trying to avoid its first three-week losing … Continue reading →
Published: Thu, 17 Sep 2020 15:59:04 +0000
Market Blog At LPL Focus 2020, LPL Financial Chief Investment Officer Burt White and Chief Market Strategist Ryan Detrick sat around the campfire to discuss 2020 so far, what could be in store for the rest of 2020, and more, … Continue reading →
Published: Thu, 17 Sep 2020 14:59:49 +0000
Daily Insights Stocks opened lower. The late-session selling after the Federal Reserve (Fed) announcement Wednesday is spilling over this morning. Markets got a dovish Fed but seemed to want more, which is dampening enthusiasm for traders. Global markets are broadly … Continue reading →
Published: Wed, 16 Sep 2020 15:58:42 +0000
Economic Blog Retail sales rose 0.6% month over month in August following July’s downwardly revised 0.9% advance, but sales fell short of Bloomberg’s consensus expectation for a 1% increase. The retail sales control group, which excludes building materials, autos, and … Continue reading →
Published: Wed, 16 Sep 2020 14:59:36 +0000
Daily Insights Markets opened higher. US equities have continued their recent strength this week on the heels of the first two-week losing streak in nearly five months. Today the big news is the Federal Reserve (Fed) meeting, as all eyes … Continue reading →
Published: Wed, 16 Sep 2020 14:21:22 +0000
Market Blog In the recent LPL Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder discuss the recent two-week losing streak for stocks and more, including: The fastest correction ever for the Nasdaq—and why … Continue reading →
Published: Tue, 15 Sep 2020 18:29:05 +0000
Economic Blog The US Federal Reserve (Fed) and Bank of Japan (BoJ) both meet this week, while the European Central Bank (ECB) met last week. When central bankers talk— markets listen. “The global economy has been steadying faster than many … Continue reading →
Published: Tue, 15 Sep 2020 14:58:20 +0000
Daily Insights Global stocks look to rally. Most major Asian indexes were higher overnight following strong data on Chinese industrial activity and retail sales, although Japan’s Nikkei lagged. The Euro Stoxx 600 is higher at midday. The S&P 500 Index … Continue reading →
Published: Mon, 14 Sep 2020 15:58:23 +0000
Market Blog As we noted last week, the demand for election charts is off the charts (pun intended), so we are sharing some of our favorite election charts. Without further ado, here are some more election charts you need to … Continue reading →
Published: Mon, 14 Sep 2020 14:58:49 +0000
Daily Insights Stocks opened solidly higher. Stocks are getting back a chunk of last week’s losses this morning, led by technology and boosted by vaccine optimism. It’s “Merger Monday” with large deals announced in the semiconductor and biotech industries, along … Continue reading →
Published: Fri, 11 Sep 2020 19:59:38 +0000
Market Blog Index Performance S&P 500 Index:-2.4% Dow Jones Industrial Average: -1.7% Nasdaq Composite: -4.0% US and International Equities During this shortened trading week, the equity markets sold off following a strong summer advance. While continued losses in the … Continue reading →
Published: Fri, 11 Sep 2020 15:58:58 +0000
Market Blog First off, our thoughts go out to everyone who was impacted by the tragic events of September 11, 2001—19 years ago today. It is a day to reflect and remember those who were lost. One of the top … Continue reading →
Published: Fri, 11 Sep 2020 14:58:15 +0000
Daily Insights On this day we remember those whose lives were lost in the tragic events of September 11, 2001. We will never forget. Markets moving higher. US markets opened higher following Thursday’s steep sell-off. Stocks are looking to end … Continue reading →
Published: Thu, 10 Sep 2020 17:38:19 +0000
Economic Blog With everything else going on this year due to COVID-19, it’s been easy to lose track of the latest fallout of the United Kingdom’s (UK) withdrawal from the European Union (EU), also known as Brexit. The UK is … Continue reading →
Published: Thu, 10 Sep 2020 14:59:03 +0000
Daily Insights Stocks opened higher after reversing earlier losses. European markets are slightly lower in midday trading after the European Central Bank left policy unchanged. Asian markets finished mixed—China’s Shanghai Composite and Hong Kong’s Hang Seng closed lower, while Japan’s … Continue reading →
Published: Wed, 09 Sep 2020 15:58:50 +0000
Economic Blog While the direction of the 10-year Treasury yield over the last cycle was decidedly lower, as shown in LPL’s Chart of the Day, there were still six extended periods where it rose at least 0.75%, and in two … Continue reading →
Published: Wed, 09 Sep 2020 14:58:06 +0000
DAILY INSIGHTS Equity markets rebound. US stocks opened solidly higher this morning to rebound from Tuesday’s sell-off. The outsized summer advance after the best August in over 30 years, still-elevated COVID-19 infections, US-China tensions, and skepticism concerning the economic rebound … Continue reading →
Published: Tue, 08 Sep 2020 15:58:28 +0000
Economic Blog In the recent LPL Market Street View video, LPL Financial’s Chief Market Strategist Ryan Detrick discusses why the recession is likely over, making it one of the shortest recessions ever. Some reasons discussed include: Historically, new stock market … Continue reading →
Published: Tue, 08 Sep 2020 14:58:27 +0000
DAILY INSIGHTS Tech weakness weighing on US markets early. The S&P 500 Index opened lower after the long holiday weekend as concerns about valuations and a shift in sentiment continued to weigh on some tech-oriented names. Similar concerns sent most … Continue reading →
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.
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.
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.
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.
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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