Mutual Funds Vs. Individual Stocks

Individual Stocks have the following Pros & Cons

Pros

1. Growth rate is very high, if it is a good stock

2. Returns will be equally greater

3. Easy to buy and sell. Meaning you can get rid of the stock easily, if you want to have some quick money, if it is a good stock.

4. Easy to track and variables are less.

Cons

1. The loss will be very heavy, if it is badly performing

2. A lot of buy and sell to be done, to liquidify your cash.

3. High pressure investment for fluid markets

Mutual Funds

Pros

1. They take care of all the investment in individual stocks.

2. Pressure reliever

3. Wider range and experts doing your investments

4. Various options for investments.

5. Safer compared to Stocks.

Cons

1. Even experts make mistake. You are solely at others discretion.

2. Sometimes tougher to really reap the benefits of a well performing stock, even if it forms the part of the index in a mutual fund.

3. Long term returns. Not much in a short term way.

Comparison:-

if you take both sides of the coin, you will see that they do have pros and cons as mentioned.

I am a long-time stock holder as well as a person who has invested largely in mutual funds.

You can go for income bonds as well as growth bonds, if you are going for mutual funds.

Your choice depends on the risk level you are willing to take and the ROI you expect.

Hope that was helpful.

Dev