Answer: Stocks is very risky that can give you great returns. In mutual funds, you have to select the type of funds so that you can also earn big profits as direct stock investing makes.
Individual Stocks vs Mutual Funds
The equivalent or “investment alike” of stocks is mutual fund equity or index fund. These types of funds are also risky. The advantage of investing in mutual funds equity is that your investment capital will be well diversified since the funds will invest in different company stocks and in different sector or industry.
Try to invest both in stocks and mutual funds.
|Net Asset Value | Photo Credit: Wirawat Lian Udom CC 2.0
How to Invest in Stocks?
If you want to start investing in stocks, all you need to do is to open a stock broker account online, fund your accounts, study the trading platform and start buying company shares.
Please read the on how to start investing in stocks, as your guide.
How to Invest in Mutual Funds?
If you want to invest in mutual funds, just simply choose a company that offers investment products such as mutual funds. Open an investment account with the company, analyze which mutual fund you want to invest with, read and study the prospectus, and decide when you will sell your shares.
In stock investing, you are buying company stocks and you will become a part owner of the company, while in mutual funds, you are buying shares. You can determine if you are making profits or losing by looking at the NAVPS (net asset value per share).
I hope you find this page useful. If you want to start investing, kindly read how to invest money part 1 of InvestmentTotal.com home page investing series of topics. It is important to consult with the CFP or certified financial planner before you will decide where to invest your hard earned money. Do not forget to allocate your assets accordingly.
Share your opinion on buying individual stocks vs. mutual funds? Which do you think is better for short term, medium and long term? I highly appreciate your comments. Thank you.