Shares/Stock Choosing Between Mutual Funds and Stocks

[Jasmine]

Do you want to invest yourself or do you want an expert to make investment for you? This is the basic difference between mutual funds and the stock market. When you invest in stocks, you choose your assets, when you invest with mutual funds, an expert fund manager will make investment for you. They invest it on your behalf. Even though investing always carries some risk, mutual funds are considered very safe – almost risk-free. However, before you put your money into mutual funds, there are a few things to understand. You should know who's promoting the mutual funds (who is the fund manager). Check whether the returns they're promising are realistic. Sometimes, there are scams out there, like HYIP or Ponzi schemes, so it's important to be cautious.

 

[Ganibade]

Direct stock purchases and mutual funds are not the same thing. Direct stock purchases represent individual companies, whereas mutual funds are professionally managed aggregates of varied investments.

By automatically diversifying and balancing the investments in mutual funds, a knowledgeable fund manager lowers risk. Because of their diversification, mutual funds are sometimes seen as being somewhat safe, although they still carry risk and are subject to value changes. Make sure you are aware of the goals of the fund, the costs associated with it, and the fund manager's experience before committing to a mutual fund.

Avoid deceptive programs such as high yield investment plans (HYIPs) or Ponzi schemes, and make sure the fund is reputable and legitimate by doing extensive research .
Among mutual funds' main benefits are:
Automated diversification Using mutual funds, you can invest in

 

[Suba]

In my country, every investment and financial platform must be registered with two government agencies, so that we can easily find out whether the platform is fraudulent or not. Even though mutual funds also provide stock investment instruments, it is very different if you buy shares on the stock exchange and you can fully control your stock investment and you will get capital gains/loos and receive dividends, whereas stock mutual funds are managed by an investment manager and based on net asset value, profits based only on units of ownership. In shares, the disbursement of funds will be transferred to the investor's fund account, whereas in share mutual funds it requires a longer process.

 

[Mika]

The first think you need to consider is your risk tolerance level. Generally speaking stocks are riskier than mutual funds, therefore, if you are not a risk taker, invest in mutual funds. Likewise, how much money you have for investment also determines where you should be putting money. Mutual funds require comparatively bigger amount. Another factor to consider is how long you can hold. You will have to wait for your mutual funds to mature, where as you can sell your stocks whenever you want.