- Date : 23/11/2021
- Read: 2 mins
Learn about the benefits and drawbacks of mutual funds and shares and which one to invest in.
While investing your money, you will definitely want to be aware of all the details involved with the asset. But often, both beginners and experienced investors find it hard to choose between mutual funds and shares.
Indeed, shares offer valuable investment options to build your portfolio and grow your wealth. Furthermore, buying stocks in bulk will benefit you in the long term. But why do it when mutual funds can offer the same equity and exposure?
The choice between mutual funds and shares continues to be a dilemma for investors. Even so, you can be smart enough to understand the workings of both to gain huge ROI.
Shares vs mutual funds
Related: 6 Best Apps To Invest In Direct MFs
Benefits and drawbacks of mutual funds
With mutual funds, you gain a sense of stability in your stock profile. However, a mutual fund is not perfect, and neither is it foolproof. Here are the pros and cons:
Overall, mutual funds work as a mediator or a middleman between your money and the stocks.
Benefits and drawbacks of shares
Buying shares in the stock market might seem like a practical way to expand your wealth, but market volatility can make shares vulnerable. Take a look at the pros and cons:
Overall, investing in shares can be an ambitious and time-consuming initiative. It will be fruitful if you want to become an investor.
Bottom line – Which one should you choose?
Do you want to invest in stocks or mutual funds? Well, that depends on your long-term goals and risk tolerance. Indeed, both of them can offer huge returns.
Some investors find mutual funds to be a long-term option that comes with reduced risks. However, some find shares to be extremely valuable for potential growth. Either way, you need to be experienced to perform stock market trading.
If you are a beginner, start by investing in mutual funds to build your portfolio. Only then can you become experienced enough to harness the effectiveness of strategic planning required in acquiring shares.
Fun fact: Mutual funds added around 81 lakh investors in FY 2020-2021.