Stocks Vs Mutual Funds - Where To Invest Money?

If you are confused between stocks and mutual funds, Here are 5 difference between Stocks Vs Mutual Funds.

Stock market and mutual fund, both are growing very fast in the world, specially in India. So peoples are very confused, Where they should invest their money, Which is better in Stocks Vs Mutual Funds?

Also Read 5 Best Stock Market Apps For Stock News And Research

We choose these 5 points to describe the difference between share market and mutual funds.

Table of Contents

1. Price And Returns

One of the biggest difference between stock market and mutual funds is price and their returns. Price of individual stocks are very high compared to mutual funds, But you will get good returns in stock market. You can start with ₹100 or ₹500 in mutual funds, But you need to have more money to buy stocks.

Returns in mutual funds are fixed or low, but you can become hero or zero with stocks, But there are many conditions.

2. Risk

Everybody wants risk-free investment. Every investment are mostly these Riskables. You are directly buying stocks, so there are high risk in stock market. Mutual funds are managed by fund manager or companies so they can handle all risks. Mutual funds managers are very professionals.

So there are high risk in stock market then mutual funds. Risk in mutual funds are also depends on Market. Mutual funds are subjected to market risk.

3. Tax

Taxes can eat a very heavy amount in your profits. Unfortunately, stocks and mutual funds, both comes under tax. 15% short term capital gain tax on both mutual funds and stocks, and 10% on long-term profits. You can also purchase stocks or mutual funds for tax deduction.

4. Knowledge

How much knowledge you need to enter in stock market or mutual funds? So you need high knowledge to invest in stock market, but you can start investing in a mutual fund with low knowledge also. Mutual funds are operated by fund managers, fund managers are very professional.

Fund managers will invest your money in stocks, Gold, FD and many other profit earning things, So your risks will be divided and managed by professionals. Investor or Traders in stock markets are fully responsible for their trade. So You need high knowledge in stock market.

5. Buying Selling

Buying and selling in stock markets are very easy, compared to mutual funds. You need to place a request in mutual funds platforms for buy and sell, but you can instantly buy or sell in stock market. You can also easily buy mutual funds with a little practice.

So these are the five difference between Stocks Vs Mutual Funds. Now we will know where to invest money?

Where To Invest Money?

You can invest your money in both. But if you are an employee or have low income, you can go with mutual funds, because you need money and time to manage stocks.

FAQ

Are mutual funds better than stocks?

Risk in mutual funds are diversified, Mutual funds are managed by professional fund managers. So if you have low knowledge about share market or have low money, Mutual funds are better than stocks for you.

Which is more profitable stocks or mutual funds?

No doubt, stocks are more profitable than mutual funds. You can also get a fix or average returns in mutual funds. But stocks carry high risks.

Are mutual funds riskier than stocks?

No, mutual funds are safer than stocks. Your investment is diversified in mutual Funds. But mutual funds are subjected to market risk.

Are mutual funds a good way to build wealth?

Yes, mutual fund can be a good way to build wealth. Returns in stocks are very high compared to mutual funds. But you can earn awesome returns in mutual funds.

Stocks or Mutual Funds which is better

If you have good income or free time, Stocks are better for you, Otherwise, mutual funds are a better option for you.

Are mutual funds and stocks the same?

You are directly investing in companies through stocks. But mutual funds are diversified, They are investing your money in stock, FD, gold and many other things.