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What are Value Mutual Funds?
Value mutual funds are those that invest in companies with strong fundamentals and steady earnings histories.
A Value Mutual Fund’s portfolio will typically consist of stocks that are considered to be undervalued and expected to pay out dividends. The stocks held in such funds usually have P/E ratios in-line with or lower than the S&P 500 index, and such companies are usually older and well-established.
There are more vigorous criteria for defining Value Funds and Value Stocks, but every company has their own proprietary system for evaluation. Value funds are on the other side of the spectrum from Growth funds, where growth funds hold stocks with high P/E ratios and no dividend history, generally.
Both investment styles have experienced some success over the benchmark in certain time periods and sectors, but there is generally no statistically relevant advantage to be gained by choosing one over the other.
In certain market conditions it may be more advantageous to take a Value position instead of a Growth position. Growth funds will generally underperform the market in bearish conditions and outperform it in bullish conditions.
This may require a higher risk tolerance and longer time horizon than Value funds. Blend funds combine the two strategies. Core funds invest in the companies that are neither growth nor value picks.
How Do I Measure My Risk Tolerance?
What are Some Strategies for Diversifying a Portfolio?
How do my IRA Withdrawals Get Taxed During Retirement?
Traditional IRAs, as well as SEPs, SIMPLEs, and 401(k)s are all taxed as income in retirement. Roth IRAs are not taxed
If I Want to Establish a SEP IRA, Do I Have to Establish One for All Employees of My Business?
All employees that meet minimum eligibility criteria must be included in a SEP IRA arrangement
How Can I Establish a Money Purchase/Profit Sharing Plan?
A written plan document must be established and distributed to all employees notifying them of the plan and of all
What is IRS Publication 527, Residential Rental Property (Including Rental of Vacation Homes)?
Publication 527 describes how to report income from residential property, as well as how to depreciate it
What is Accounts Payable for Accounting?
Accounts Payable are the short-term expenses and debts that a company must pay out in the near future
What is a Bank Statement?
A Bank Statement is a report issued to an account holder, which contains the account balance and the transaction history
What are Collateralized Debt Obligations (CDOs)?
Collateralized Debt Obligations (CDOs) are bond-like investments backed by debts such as mortgages
How to use the average directional index in trading
Average Directional Index is a technical indicator which plots the strength of a trend in a security. Trend traders can use the ADX to spot and confirm trends
What is a bear put spread?
A bear put spread involves the use of two puts, one sold and one bought, at different strike prices
What is the Price to Book Ratio (P/B Ratio)?
The price to book ratio compares a company’s current stock market price to its book value (which is generally net assets)