“At the end of October 2018, there were 7,866 U.S. mutual funds spread across the following broad categories:         Domestic equity (3,144)                     World equity (1,499)                           Hybrid (709)                                           Taxable bond (1,573) Municipal bond (560) Taxable money market (297) Tax-exempt money market (84)           Source: Investment Company Institute, 2018   Almost 100 … [Read more...]

“Although the goal of hybrid funds is simplicity, they are not as simple as they may appear, and different types of hybrid funds have very different objectives.” Holding a mix of stocks and bonds is fundamental to building a portfolio that can pursue growth while potentially remaining more stable than a stock-only portfolio during market downturns. Many investors approach this goal by owning a mix of individual securities, a mix of funds, or both. However, some hybrid funds try to follow the … [Read more...]

The federal funds rate is the interest rate at which banks lend funds to each other from their deposits at the Federal Reserve (the Fed), usually overnight, in order to meet federally mandated reserve requirements. Basically, if a bank is unable to meet its reserve requirements at the end of the day, it borrows money from a bank with extra reserves. The federal funds rate is what banks charge each other for overnight loans. This rate is referred to as the federal funds effective rate and is … [Read more...]

The IPO process is important to the financial markets because it helps fuel the growth of young companies and adds new stocks to the pool of potential investment opportunities. An initial public offering (IPO) is the first public sale of stock by a private company. Companies tend to schedule IPOs when investors are feeling good about their financial prospects and are more inclined to take on the risk associated with a new venture. Thus, IPOs tend to reflect broader economic and market … [Read more...]

"Time famine" is the feeling of being overwhelmed by the demands of work and life. Also known as time scarcity and time stress, this pressure is a "critical factor" in the rising rates of obesity. Source: "Buying Time Promotes Happiness," PNAS, July 24, 2017   The more money you make, the more valuable you perceive your time to be — and the more time-strapped you may feel, according to University of British Columbia psychology professor Elizabeth Dunn.1 So wouldn't it stand to … [Read more...]

GDP, or gross domestic product, measures the value of goods and services produced by a nation's economy less the value of goods and services used in production. In essence, GDP is a broad measure of the nation's overall economic activity and serves as a gauge of the country's economic health. Countries with the largest GDP are the United States, China, Japan, Germany, and the United Kingdom. GDP generally provides economic information on a quarterly basis and is calculated for most of the … [Read more...]

Each month, the Bureau of Labor Statistics publishes the Employment Situation Summary report based on information from the prior month. The data for the report is derived primarily from two sources: a survey of approximately 60,000 households, or about 110,000 individuals (household survey), and an establishment survey of over 651,000 worksites. Results from each survey provide information about the labor sector, including the: Total number of employed and unemployed people … [Read more...]

Owning shares of stock or stock funds might increase the value of your portfolio in one of two fundamental ways: capital appreciation (i.e., price increases) and dividend payments. Of the two, capital appreciation carries the greatest potential for return, but it also carries the greatest potential for loss. And any gains or losses are only reaped when you sell your shares. By contrast, dividends typically offer more consistent modest returns that are paid while you hold your shares. For this … [Read more...]