Mutual Funds Vs Stock Market Investing

Posted by Grace under Investing on August 21, 2015

Mutual funds vs stock market investing was discussed many times online! Join discussions on mutual funds vs stock marketing investing – which is more profitable in investing money! I am planning to invest my money but I am confused, should I invest my money in mutual funds or directly in the stock market. I am a regular visitor of InvestmentTotal.com blog. I am 30 years old married man working as a car mechanic in Boston, USA. Please help me to decide. Thank you! Our Response: Before you invest your money, it is advisable to know how does mutual fund works and what is the difference between stock market investing and mutual fund investing.

What is a Mutual Fund?
“An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.(1)”

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What are Stocks and It’s Guarantee?

“Stock prices are driven by expectations of corporate earnings, or profits.” (2) “There’s no guarantee that the company whose stock you hold will grow and do well, so you can lose money you invest in stocks.”(3)

In investing, it is wise to diversify our assets. Mutual fund can help us to diversify our investment capital in simple ways;

First. If you invest in mutual fund equity, there are several stocks shares bought from these fund. The fund manager is the one who can decide which stocks to buy. Compare to investing directly in stocks, you will study fundamental analysis, make a research which company stocks is the best to buy and know some technical analysis.

mutual funds vs stock market investing

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Mutual Funds Vs Stock Market Investing

Mutual funds can help you about asset allocation strategies. In mutual fund, you can invest in stocks, bonds, money market fund or combination of both.

I cannot say which is more profitable. It is still a fact that in investing, the high risk the high rewards. In mutual funds, the high risk type is the equity fund (same as stocks). Therefore, if you are investing in mutual fund bond type and stocks, I am sure your stocks is more profitable.

Citations and References:

(1) http://www.investopedia.com/terms/m/mutualfund.asp

(2) http://useconomy.about.com/od/stocksandstockinvesting/f/Stocks.htm

(3) http://investor.gov/investing-basics/investment-products/stocks

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