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  Invest In Mutual Funds Or Stocks?  
#1
With so many options out there for the individual investor, it is sometimes difficult to determine that investments are right for you. 


1. Mutual funds have great characteristics for investors

Mutual funds are professionally managed. The mutual funds employ professional managers to operate all investing. These professional managers bring with them many years of experience. They are experts in selecting and evaluating investments for the fund. The managers make all of the buying decisions and selling decisions that relieves the individual investors from that responsibility.

2. Mutual Funds Are Diversified

Another advantage of mutual funds is that most of their portfolios are highly diversified. This means that the mutual fund is invested in a wide variety of stocks. The advantage of diversification is that if a few stocks drop in price the entire fund won ™t be dramatically affected. Diversification occurs by investing in many different companies. It can also be accomplished by investing in several different industries. The advantage of diversifying through mutual funds is that the funds can reach a wider diversification than can be reached by individual investors.

3. There are thousands of mutual funds to choose from

Depending on your preferences, you can choose to invest with a mutual fund that covers the whole market or with a fund that focuses on one or two industries. There are even mutual funds available that invest only in foreign markets. Mutual funds can be very convenient for the investor since the fund does all the record keeping. Your mutual fund will provide you with all the forms you need to file your taxes. Additionally, many may offer perks such as the ability to write checks against the money market fund.

4. Stocks Have Greater Returns (Potentially)

On the other hand, purchasing individual stocks has attractive features as well. After the brokerage fee is paid, there is no ongoing fee associate with owning individual stocks. This is in contrast to mutual funds that charge a participation fee. Mutual fund fees can totally negate the mutual fund return that you are expecting.

With investing in individual stocks, an investor has the ability to be very flexible with their investing and move with market if they so desire. Mutual funds are very stable but this also keeps them slow. Individual stock investments can be traded quickly if need be, and purchased just as quickly if the investor finds an undervalued stock.

5. More Control

With individual stock investing, an investor has a greater level of control over their investing. Although brokerage firms are involved there is the opportunity to be more hands on with the stock purchases. This level of involvement is impossible with mutual funds. Many investors like to know exactly where their money is going and this can be hard with a mutual fund that holds shares in 50 or more companies. Investing in individual stocks allows the investor to have a larger relationship with the company they are investing in. This can create a sense of comfort for the investor because they know where their money is being used. They can track the activities of the company they have invested in and feel like a true part of that company.

6. The Verdict

Investing a mixture of mutual funds and individual stocks seems to the best method for a majority of investors. Those who do not want to take the time to research their stocks and would rather let an expert handle things are more comfortable with mutual funds. On the other end of the spectrum, those who want a greater level of participation with their investments will find individual stock investing attractive. As part of a long-term diversification strategy it may be best to look into both in the ratio that you are comfortable with.
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#2
Reasons to choose stocks rather than mutual funds. First you want to take care of profile run the risk of a lot more exactly. Second you wish to handle your tax obligation. Third you prefer an even more dependable earnings stream. Fourth you have a lobbyist predisposition and last it's your method to play "Tycoon," so on a tiny range. I’m thankful to my friend from AstroTrading.co who share these ideas.
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#3
(11-05-2020, 12:59 PM)WillieHaworth Wrote: Reasons to choose stocks rather than mutual funds. First you want to take care of profile run the risk of a lot more exactly. Second you wish to handle your tax obligation. Third you prefer an even more dependable earnings stream. Fourth you have a lobbyist predisposition and last it's your method to play "Tycoon," so on a tiny range. I’m thankful to my friend from AstroTrading.co who share these ideas.

I do agree with your friend from AstroTrading.co, a mutual fund supplies diversity via direct exposure to a plethora of stocks. The factor that having shares in a mutual fund is suggested over having a solitary stock is that a private supply brings even more danger than a mutual fund. This sort of risk is called unsystematic risk.
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