Mutual Fund Vs Investing in Stocks

I was reading an interesting post by Rohit, when someone posted a comment on his blog, ferverently opposing his involvement in mutual funds, given his knowledge about investing in stocks. Here are some of my thoughts :
  • Investing in individual stock gives huge and quick returns.
  • Mutual funds protects against any quick failures due to diversification.
  • Investing in individual stock a lot of research for success.
  • Mutual funds require little research, and no daily monitoring required
  • Investments in individual stock costs you for the buy-in and the sell with brokerage fees, but leave you alone once you’re invested.
  • Mutual funds generally cost less to get in, but slowly take away expenses over time.
  • Mutual funds provides Rupee Cost Averaging through Systematic Investment Plan
Investing in stocks is a high-risk high-gain game requiring serious study, while mutual funds are for a more reserved investor and they wont make you rich in just few years. Mutual funds should be used as a foundation for investment strategy while investing in stocks should be for playing around.

1 comment:

  1. Good one

    personal finance blog - india