Mutual Funds
In today’s complex financial marketplace, mutual funds offer investors a simple, convenient way to invest. Mutual funds are investment pools that may invest in stocks, bonds, and other securities. Each allows you and investors with similar objectives to pool your capital and achieve goals as a group that you might not be able to achieve individually.

One of the most valuable features of mutual fund investing is professional management. Each fund is under the direction of a manager or management team that makes specific buy and sell decisions for all securities in the portfolio. The portfolio managers draw upon their experience and the fund family’s research to make sound investment decisions.

Diversification is an important investment goal you can achieve by investing in mutual funds. It reduces your dependence on the success or failure of any one security. Investors who don’t have large sums to invest can build a diversified portfolio with mutual funds more easily than by investing in individual stocks and bonds. You can achieve even wider diversification by selecting several mutual funds with varying investment objectives or styles of management.

Mutual funds also increase your flexibility. Most funds offer discounts, called rights of accumulation, for larger amounts, allowing investors to purchase shares at a reduced rate. Many offer systematic investment plans, allowing you to invest a specific amount in regular installments over a period of time, rather than investing a large amount of money all at once. You may also reinvest dividends and capital gains into the fund. And many funds have systematic withdrawal features, which allow you to designate an amount you wish to receive from your fund on a regular basis.

There are four basic types of mutual funds: stock, bond, hybrid (which invest in a mix of stocks and bonds) and money market. Stock, bond, and hybrid funds are generally considered long-term funds. Money market funds are referred to as short-term funds because they invest in securities that generally mature in one year or less.

In recent years, the number of mutual funds with different investment objectives has grown. As a result, it is also useful to categorize mutual funds by their investment objectives, including growth funds, aggressive growth funds, growth and income funds, balanced funds, international funds, high-yield bond funds, and municipal bond funds. Your financial advisor can help you evaluate the choices available and select the funds that are most appropriate for your situation.

For more information on any mutual fund, including a discussion of risks, charges and expenses, obtain a prospectus from your financial advisor. Please read the prospectus carefully before you invest or send money.

529 Plans
529 plans are a one-of-a-kind tax-advantaged program that can benefit anyone. Parents, grandparents, aunts, uncles, and step-parents can contribute to these plans. You can contribute more than $200,000 in a 529 plan and still retain ownership of the funds. These contributions are considered gifts - free of federal gift taxes - and earnings are federal tax-deferred. Withdrawals for qualified college costs are tax-free.  Many 529 plans also offer state tax benefits for owners of plans residing in their state, similar to the federal tax benefits. Currently all 50 states and the District of Columbia offer 529 plans, and many offer more than one option.

You can invest $12,000 per year, per beneficiary ($24,000 for those married and filing jointly) in a 529 plan. You may be interested in taking advantage of the "five year averaging election," contributing a $60,000 lump sum per beneficiary ($120,000 for those married filing jointly.) These lump sum contributions can greatly reduce a taxable estate value for that respective year.

529 savings plans are a great way to work toward meeting an important goal - your children's college costs. Your Scott & Stringfellow financial advisor can show you how 529 plans can help you reach these goals while also reducing your taxable estate. We can run college planners to determine college cost estimates for each child. We also can provide you with portfolio proposals to effectively show investment strategies suitable to your needs, including lump sum contributions, monthly contributions, or a combination of both.

Depending on residency, 529 Plans may not offer tax benefits.  Please contact Scott & Stringfellow for more information, including a description of fees, expenses and risks; and a prospectus, which you should read carefully before investing. Any comments regarding tax implications are informational only; Scott & Stringfellow does not provide tax or legal advice. As always, you should consult your tax or legal advisor.