Mutual Funds:-
• As Clear from its name it is investment of lot of people in a particular fund which invest in multiple stocks, debt funds and various investment instruments available in the market. These are generally managed by experts.
Stocks-
• Stocks
are listed companies shares at a particular price and while buying stocks
person has to do the self study of stocks before investments
Advantages of Mutual
Funds
à Mutual
funds are managed by best known experts of the field and you don’t have to
bother about the doing the research for each stock of investment.
à There
is no need to check to stock movements every day, Just do Systematic investment
plan and do it for at least 5 years and you will get returns for sure.
à Less
time intensive for investors as we can the performance of our investments once
in every quarter and analyze that is there is requirement of switching to other
mutual funds or your investments are beating the inflation.
à Healthy
returns for longer period of time.
à
Your one investment in stock market can make you
millionaire but investment should be in stock after due diligence.
à
Can give
you better returns than Mutual funds.
à
There is no middleman between your investments,
that means no expense charges.
à
Complete control over the companies you choose
to invest in.
Disadvantages
of Mutual funds
à Annual
expense ratios.
à
Many funds have investment minimums of Rs. 5,000-10,000 or more.
à Typically
trade only once per day, after the market closes. However, ETFs trade on an
exchange like stocks.
à Lower
returns in terms of lower liquidity.
Disadvantages
of Stocks
à One wrong
investment may leads to destroying your whole hard earned money
à High degree
of risks associated with stocks.
à You have to
diversify your portfolio so as to get returns during changing cycle of
particular sector.
à Time-intensive,
as investors must research and follow each individual stock in their portfolio.
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